Business Case Studies,Corporate Governance & Business Ethics Case Study, Flour Corp's Business Ethics Practices: Creating Six Sigma Standards in Staying Corruption-Free

Code : GOV0046

Year : 2010

Industry : General Business

Region : US

Teaching Note: Available

Structured Assignment : Available

Abstract:
Corruption in Multinational Companies (MNCs) is a worrying factor as it puts an additional burden of 20%–30% to the cost of government, leading to the diversion of public funds from constructive areas to address this issue. Many MNCs, as a result of globalisation, expanded and set up their operations in the developing and Least Developed Countries (LDCs). However, in conducting their business in these countries, theywere resorting to corrupt practices. To tackle this issue, the US Department of Justice (DOJ) and Securities Exchange Commission (SEC) speeded up the investigations for the US-listed entities under the Foreign Corrupt Practices Act (FCPA). The case study captures few cases of MNCs operating in India – such as Dow Chemical Company,A.T. Kearney, WestinghouseAir Brake Technologies Corporation and Xerox Corporation – which came under the ambit of FCPA. It alsocaptures the underlyingreasons which enableMNCs to set uptheirsubsidiaries in the LDCs and emerging markets like India where corruption is tentativelyhigh.