The FCPA makes it illegal to give anything of value to a foreign official to obtain or retain business. We talk a lot about “obtaining” but much less about “retaining” — or what I call bribing not to lose.
People are often more motivated by the thought of losing something than gaining something of equal value. In behavioral theory, it’s called “loss aversion.” That applies to employees working in the field where a contract for goods or services has been signed and executed, and now comes the delivery and payment cycle.
In many low integrity regions, where procurement officials are poorly trained, under-compensated, and the rules of procurement are deliberately confusing, this part of the sales cycle is often marked with requests for small bribes to ‘move things along.’
A front-line manager in the field is now left to ponder “how not to lose” the opportunity during these final stages, and how to respond to petty bribe requests, usually articulated through the intermediary. Even without prior corrupt intent, the manager might now consider progressing “down a path even when new information suggests that path is unwise,” as a leading behavioralist said. That’s called “escalation of commitment.”
I once heard a CEO say “you’re better off not telling me about a sales opportunity, for once you do, I’m going to be all over you to get it completed, right up until the day we get paid.”
That’s a common C-suite proclamation. How it’s understood and executed on the front lines can be the difference between compliance and bribing not to lose.
Richard Bistrong is CEO of Front-Line Anti-Bribery LLC. He consults, writes and speaks about compliance issues from his experience as an international sales VP and conviction for violating the FCPA, where he pleaded guilty and served fourteen and a half months in prison. He can be reached via his website, twitter and e-mail.