Article Review: Distant Dilemmas by Mark McGraw Essay
The article, “Distant Dilemmas,” by Mark McGraw discusses the business risks related to sending an executive expatriate to other countries and the role of HR in mitigating such risks. McGraw highlights recent surveys by Ernst & Young to provide some color to the level of unethical business practices that occur outside the Unites States. Based on a survey conducted in Europe, half of the respondents felt that one or more unethical business practices were acceptable, with half of those finding cash bribery to obtain business a tolerable business practice.
The survey also revealed that many expect corporate fraud to continue to increase over the next several years. To provide some context to the survey, the author provided two recent examples of American based companies that have fallen to the pressures of unethical business practices. Lucent Technologies paid $2.5 million in penalties and fines to settle allegations for inappropriate payment to government officials. Even more egregious is that of Siemens, which settled in the amount of .
6 billion for maintaining a budget for bribes and unethical payments to government officials in many countries.
In order to avoid such scenarios, McGraw stresses that Human Resources needs to play a critical role in identifying and training an executive for business abroad. He states that hiring the right executive is the first key step in the process. HR should focus more so on social skills and adaptability of executives more so than the higher rated performers. Identifying potential applicants that understand the differences in culture will reduce the likelihood of making unethical business decisions. Secondly, both local and international executives need on-going training that is appropriate and extensive. Trainings should focus on the Foreign Corrupt Practice Act and other anti-corruption measures such as internal policies business courtesies. Such trainings should be conducted by legal professionals, preferably face-to-face to maximize success of the training. Finally, HR needs to keep in constant contact with executives to provide a support system for questions or concerns. It also assists HR with identifying potential problems before they get out of hand. While nothing is ever a sure thing, following these steps will reduce the risk of unethical business behavior occurring.
The article provides some strong guidelines to mitigating unethical business practices. Working in an organization with a high business ethics and compliance culture, I see firsthand these suggestions in practice. As a result, we have minimal ethical or compliance issues in comparison to direct competitors within the same industry. While some of these recommendations may seem like standard business practices, pressures especially in today’s economy sometime muddy roads such as these and create significant business risks that could cost companies billions in penalties and reputational harm.