Question

Based on “Did Walmart Violate the Foreign Corrupt Practice Act?” Case Summary This feature explores corruption at Walmart’s Mexico division where managers allegedly bribed Mexican government officials to obtain permission to build the San Juan Teotihuacan store in the early 2000s. After leaders at Walmart’s headquarters were alerted of the situation, Walmart launched an internal investigation. However, the investigation was turned over to Walmart Mexico to complete and only after a 2012 New York Times article again raised questions about the situation did Walmart reopen the investigation. Today, the company has spent more than $300 million on lawyers looking into the issue and Walmart is also facing scrutiny by the SEC and the U.S. Department of Justice.

a) Did Walmart Violate the Foreign Corrupt Practices Act? What is your opinion? If you think it did, what do you think the consequences will be for Walmart?

b) Do you agree with people who say that bribery may be justified to grease the wheels so that business can be done in some countries ?

Answer 1

A)Under foreign corruption practices act it is unlawful to pay bribes to foreign officials which is one of the important elements of the act so the Walmart has curropted the FCPA

Consequences of violation will be that they will have to face the prosecution and also have to pay very heavy fines as in the case of Smith and Nephew,Siemens AG where they had paid millions of dollars as fines

B)I don't agree with people who support bribery for effective running of business as there is always a legal way of proceeding with the functioning of business which may take some time but it is always advisable to choose that path.