Evaluating the Foreign Corrupt Practices Act (FCPA) 15 USC 78dd1 - of Essay

Evaluating the Foreign Corrupt Practices Act (FCPA) 15 USC 78dd1 - of 1977 - Essay Example In 1970s, the market was gradually shifting towards globalization with many multinationals expanding to new markets. The result was that to gain advantage over other players in the market, some U.S firms and individuals bribed foreign government officials for considerations in awarding of contracts and business opportunities that promised increased returns in foreign markets. One of the major corruption scandals that even threatened the government was President Nixon’s Watergate scandal. In 1977, the Congress enacted the Foreign Corrupt Practices Act of 1977 that prohibited bribery of foreign firms or any official by any American corporation or individual. The act aimed at enhancing integrity and repairing the tainted perception of American firms locally and internationally by ensuring firms adhered to high levels of ethics and fairness. This paper will investigate the history behind the act and its respective amendments, the rationale behind implementation of the act, investi gating the efficacy of the policy, its implementation and recommending necessary amendments to make the act more effective. 2.0 History of the Act In the mid-1970s, numerous investigations, legal and administrative actions against many local corporations revealed numerous illegal and questionable payments to foreign businesses and government officials. The only mechanism at the time to deal with such payments was through the Securities and Exchange Commission (SEC), which investigated any public corporations for irregular deals concealed from the public (Seitzinger, 1999). The investigated cases were prosecuted by the Department of Justice, DOJ. Through such cases, the government realized that criminalization of bribery practices to foreign officials and enforcement of strict book keeping, accountability and disclosure of firm’s operations to the public were necessary to deal with increasing corruption cases involving American firms in foreign markets. Corruption cases had ba dly affected American foreign Policies, portraying a negative image of American Democracy abroad. Corruption had badly impaired public confidence in financial integrity in the country’s corporations (Seitzinger, 1999). To deal with these problems, the congress responded by passing the Foreign Corrupt Practices Act of 1977, FCPA. The act was therefore as a result of market failure in ensuring integrity and safeguarding financial integrity in corporations. The act was also motivated by government failure in that the government had failed to effectively implement and put in place measures to reduce bribery under the provisions of the Securities Exchange Act of 1934. The act had failed to ensure effective bookkeeping in corporations to account for all transactions. There was a general lack of elaborate internal accounting control systems that would have guaranteed management’s control, responsibility and authority over a firm’s assets (Seitzinger, 2010). As a public policy prescription, the act discouraged bribery of foreign officials through huge fines and jail terms, which discouraged many from the practice. The act encouraged an accountability culture that improved public’s perception of the country’s corporations. Such change of perception was necessary in ensuring investor confidence and improving the country’s image locally and internationally, which had been tainted by massive bribery and lack of strict financial accountability in

Business Strategy Essay Example | Topics and Well Written Essays - 3000 words - 2

Business Strategy - Essay Example Best cost strategy combines strategic emphasis on low cost as well as focused differentiation. It focuses on giving its customers more value for money. For E.g. Kingfisher Red Airlines is an example of best cost airlines providing luxury of Kingfisher Airlines but at comparatively lower price than that of competitors in luxury segment. The product line of company employing best cost strategy has products with appealing attributes and assorted upscale features. The aim of focused differentiation strategy is to secure a competitive advantage through offering customers of niche market with a product that they perceive as vary well suited to their needs, tastes and preferences. The strategic target of focused differentiation strategy is a narrow market in which needs and preferences of the buyers are distinctively different. Attributes appealing specifically towards niche members forms the basis of competitive advantage in focused differentiation strategy. B. Explain in detail, IKEA†™s hybrid strategy? IKEA used a mix of low cost and differentiation strategies as a part of its hybrid strategy. They used innovative means for attracting customers and people who can become there prospective customers in near future. The company tried to create differentiation in the retailing industry it operated in. It could be taken instance from the fact that the company allowed its customers to relax in its western style stores in a view that they could be aspiring customers of IKEA in near future. The production emphasis of products in focused differentiation strategy depends on customization meeting the tastes and requirements of targeted customers. The marketing emphasis of this strategy is towards communicating that how the product offers all the requirements in meeting buyers’ expectation in target market. Commitment in serving to niche markets better than rivals remains the key of sustaining the strategy. C. Why is IKEA’s hybrid strategy is difficult for competitors to imitate? Hybrid strategy is difficult for imitate and lend IKEA to outsmart competition. This is because through hybrid strategy IKEA is created a mix of two competitive strategies i.e. low cost and differentiation and the mix of these two strategies becomes difficult to imitate. D. Explain 3 business risks that IKEA faces in its hybrid strategy? The three business risks related to hybrid strategy are: These strategies could lack flexibility for IKEA in the scenario of changing external environment. These strategies could lack specificity in a long run for IKEA. Hybrid strategies help a company majorly when the organization has resources and capabilities of employing the strategy and serving an attractive niche market. Question 2 Provide the explanation with two examples in each of the 5 macro environmental influences that IKEA face from operating internationally? Macro-Economic Forces This includes forces at national and regional level that affects the company. IKEA is retail chain build on a global platform where factors like inflation rates, interest rate and current exchange rates in bear some impact, but such impact can’t be considered influential. As the interest rates are slashed as a result of recession in the economy, the company could borrow money at a cheaper interest rate. Same is the case with changes in current