Ethics

This is a situation where Jed who happens to be the director of compliance for Geletex Inc. goes around different branches of the company around the world. He realizes that different branches are having different irregularities. In the office that is located in Peru, he realized that a problem exists which is very familiar with the local management in the office. He realizes that the expenses in the local office are way too high and the management is fully aware of this. After enquiring the reason behind this, he learns that the reason for high costs of running this office is the fact that most workers are paid high commissions in case they conduct a business activity either through a phone or any long distance service that is offered.

This telecommunication company has been in operation for some time and they believe that they should have the best practices exemplified in all the branches in their organization irrespective of the location. In their code of ethics, they have clearly stipulated that the workers should be employed on contract base and that they should work as agreed on the contract. This means that if there are some benefits that will be offered to employees, they should be clearly indicated on the contract. The code of ethics of the company also clearly outlines all the necessary terms of employment of all the employees that are working in for the company. As the head of the company is in the United States, the laws and the regulations that apply to all the departments or the subsidiaries of the company should be those that apply to the head office which are the United States laws.

By the fact that some people in the office that is located in Peru are given very high commission, this may be termed as an activity that is against the companys code of ethics. In addition, it can be termed as a violation of the FCPA. This in long refers to Foreign Corrupt Practice Act and it is known to prohibit people against official bribery. This act is known to generally prohibit all the United States companies together with its citizens from offering or corruptly paying, indirectly or directly, anything of value or even money to a foreign official in the aim of retaining of obtaining business. This law also applies to all those foreign companies that are listed in the United States stock market. This law is very unique to the United States in that, apart from dealing with the United States officials that are corrupt, the law also extends to all those foreign officials that violate the act while conducting business activities that are associated with United States.

From this understanding of the Act, it is clear that the office at Peru had violated the FCP Act. The reason is that the branch or rather the office at Peru happens to be part of the company that originates from the United States. Therefore the Peru office and all its workers, whether United States citizens or not, should all work under the requirement of the act.

It is also clear that the reason as to why there are very high costs is the fact that the sales people are paid high commissions when they conduct a business for the organization. When the manager is asked the reason behind this, he says that this is done in order to maintain good performance in the organization. This can be termed as paying money so as to retain the business. This is prohibited by the FCP Act. Therefore, from this, it can be argued that the office at Peru violates the requirement of the FCP Act.

Before a person is hired into a company, he or she undergoes a recruitment process where he is familiarized with the rules and the regulations of the organization. This means that by the time a person starts working in the organization, he is fully aware of all these rules and regulations. He is fully aware of what he should do and what he should not do. It can therefore be argued that the reason that the manager encourages this activity is out of negligence. Therefore, he should be held responsible for the violation of this Act.

The very first thing that Jed should do is to report to the head office of the case that his happening in the Peru office. From the confrontation that he made to the manager of the office, it is clear that the manager fully knew that whatever he was doing is illegal and should not be done. Therefore, there is no need to do more investigation. After reporting the case to the head office back in the United States, Jed should go ahead and suspend the manager in the office at Peru.

In addition, all the other officials in this office may be termed as accomplices of the manager and therefore all of them should be held responsible for the violation of the Act. If there was one who was honest, he or she would have reported the issue way before Jed found out. Jed already has a hotline and therefore the employees had the means. It is just that they did not want to report. The next thing that Jed should do is to close down the office with immediate effect. The reason is that, even though the office is outside the United States, by the fact that the office is a subsidiary of the United States Company, it is under the FCP Act and therefore should follow the entire Acts requirement.

The office should be closed before it is found out by the United States law enforcement departments of what is happening as this would have greater repercussions. After this, all the officials that were serving in the office should be summoned by the company head and they should be required to explain the reason for their negligence. After this, Jed should make a new recruitment and employ new staff and make it clear to them that they must follow the companys code of ethics strictly. If they do this, they will also have complied with the United States Foreign Corrupt Practices Act requirements.