Free Case Study
Flour Corp's Business Ethics Practices: Creating Six Sigma Standards in Staying Corruption-Free
Fluor Corporation: Corruption Floored? Cont...
Incorporated by a Swiss immigrant during 1912 in the US, Fluor Corp. abides by Foreign Corrupt Practices Act-1977. Maintaining stringent regulations, US government enlisted several precautions against bribery and questionable payments to foreign officials of any country in which US companies or their subsidiaries operate. When a company is operating in a relatively poor economy, it can (easily!) influence the officials and turn respective government's decisions in its favour. Ethical companies continue to pay a price for refusing to engage in bribery and the ensuing unfair competition. As per conservative U.S. Government estimates, from 1994 to 2002 as many as 474 major off shore investment contracts, valued at nearly $240 billion, involved bribes to foreign officials,16 which the ethical companies apparently lost. Bribes to foreign officials for various purposes, including bidrigging, is one of the most common and costliest form of corruption. Though American anti-corruption laws are globally accepted, many countries do not implement these laws. The major difference happened when Organization for Economic Cooperation and Development (OECD) took the corruption issue seriously and all its 30 members decided to implement rigorous action against corruption.
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Boeckmann was ranked 8th in the Ethisphere magazine’s list of 100 most influential people17 in
Business Ethics, for his outstanding ethical performance in leadership. This award is given to individuals
who transform a specific business’ operational practices very effectively and efficiently consistent
with the ethical leadership, forcing competitors to follow suit or fall behind.18
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Fluor initially started with activities that could build a clean image. In 2004, Boeckmann appointed a lawyer, Wendy Hallgren, working with Fluor Corp.'s legal department, as the vice president of Corporate Compliance. In order to gain a better understanding about the levels of corruption thecompany’s employees are experiencing, Hallgren moved all around the globe, interacting with Fluor Corp.'s project managers and engineers and experiencing different situations of corruption in various countries including Russia, Philippines and Chile that are notorious for corruption according to TI’s CPI. One of the most widely reported stories of Fluor Corp.'s anti-corruption behaviour had to do with local officials in a Southeast Asian country. The local officials were demanding that Flour hire their security details and when the company refused to tow their line, the government converted their dirt road leading to Fluor Corp.'s mining project into a one-way path and arrested workers as they drove home. Rather than being subdued and vilifying, Fluor Corp. appealed to the government. By refusing inappropriate demands from public officials and seeking solution for bitter corruption issues through the legal way, Wendy Hallgren sent a strong message that company doesn’t intend to tolerate any kind of corruption and encouraged and subjected all the employees to react in the same way. But there is always a cost for fighting corruption; Fluor Corp.'s bids to build refineries, chemical plants and other facilities in developing countries, mysteriously, were always fractionally bettered by the winning company.20
16]Boeckmann Alan, "Ethical Leadership at Work", http://www.cipe.org/publications/fs/pdf/061507.pdf- Ethical leadership, June 15th 2007
17]"100 most influential people in business ethics(2007)", http://ethisphere.com/influential/, November 29th 2007
18]Ibid.
19]"Federal Contractor Misconduct Database(FCMD)", http://contractormisconduct.org/index.cfm/1,73,221,html?ContractorID=25
20]Yung Katherine, "Fluor Chief in war on bribery", http://www.dallasnews.com/sharedcontent/dws/bus/stories/DNfluor_21bus.ART.State.Edition1.1cbbc2d.html,January 21st 2007
