If you’re on the brink of closing a sale and the decision-maker stonewalls, what should you do? Lower your price? Add more products or services to the contract? Offer a bribe?
We’re not kidding about the bribery part. Apparently, more business owners and executives are using bribery as a “normal” closing technique. According to Ernst & Young’s 12th Global Fraud Survey, 15 percent of senior executives polled in 2011 said they’d make cash payments to win or keep business. This was up from 9 percent in 2010. Amazingly, 15 percent of CFOs also admitted they were willing to bribe purchasers in order to close deals. And almost 50 percent of respondents said their firms had clear policies against corruption, but imposed no penalties for non-compliance.
Wal-Mart is a perfect case in point. According to The New York Times, the big-box retailer paid some $24 million in bribes to get building permits in Mexico. When an executive from its local subsidiary blew the whistle, Wal-Mart corporate stonewalled the investigation. After news of its ethical lapses went public in April 2012, the giant retailer’s stock fell by almost 5%.
The Wal-Mart lesson? No matter how aggressive your growth objectives might be—or how frustrated you might be about permitting or other sales logjams, never resort to bribery. According to Transparency International, the downside risks of doing so are substantial:
- Bribery is illegal in most countries, carrying potentially severe financial penalties for company executives.
- A bribery conviction can rob you of your export licenses and effectively blacklist you as a supplier to large corporations or governments.
- Getting sanctioned for bribery will taint your reputation and force permanent disclosures of your violations under laws passed to prevent terrorism or money laundering.
- Finally, relying on bribery to generate revenue is financially damaging and can lead to lack of discipline. In other words, companies that rely on bribes to win business can lose their ability to compete the traditional way—by out-performing their competitors.
However, there is one scenario under which “bribery” makes sense: when you commit to delivering superior value to your customers. Why pay cash bribes when you can generate business the old fashioned way—by providing a great product for a fair price!
Source: ethics
