Over the years, the influence of money in countries is increasingly causing corruption and affecting democracy. Unfortunately, most countries fail to fight corruption. <\/p>\n\n\n\n
According to the Corruption Perception Index (CPI), \u201ccorruption is more pervasive in countries where big money can flow freely into electoral campaigns and where governments listen only to the voices of wealthy or well-connected individuals.\u201d The CPI is a dataset that ranks countries on a scale of 0-100 by their perceived levels of public corruption according to experts and business people. Only 20 countries have improved their scores since 2012, and 16 countries significantly decreased their scores. <\/p>\n\n\n\n
The United States ranks 69 and is declining. New Zealand and Denmark scored the highest ranks with a score of 87 each in 2019. Somalia, South Sudan, and Syria scored the lowest ranks, at 9, 12, and 13 respectively. <\/p>\n\n\n\n
Before making the decision to go abroad in a specific country, it is important to evaluate the country\u2019s CPI ranking. CPI matters because when an economy is corrupt, there is typically a small middle class and a significant disparity between the upper class and the lower class. Most of the created wealth flows to rich business leaders who are well connected with government officials. Corrupted economies do not prosper or function properly since their laws are not able to operate naturally and corruption causes an entire society to be disadvantaged. <\/p>\n\n\n\n
There are four important steps that companies should take to mitigate corruption risks:<\/p>\n\n\n\n
In addition, choosing the right mode of entry for a foreign market is a critical decision. For example, if a business is considering entering the Chinese market for the first time, they may consider a joint venture due to their government regulations. A joint venture is when a business joins with a foreign company to produce or market products or services. In China, a joint venture is mandatory for some industries. Advantages include the opportunity to utilize existing sales networks and customer base, access the partner\u2019s existing resources and production facility, and a lower cost base due to local management.<\/p>\n\n\n\n
In order to combat corruption, countries should foster independent institutions, freedom of the press, and engage citizens in the most sustainable way possible. As more companies follow the steps above, corruption will continue to be reduced in business practices.\u00a0<\/p>\n\n\n\n
Written by Kimberly O\u2019Hanlon Works Cited:\u00a0<\/strong><\/p> Delaney, Laurel. \u201cAvoiding Bribery in International Business.\u201d The Balance Small Business. <\/em>2 January 2020. <\/em>https:\/\/www.thebalancesmb.com\/how-to-avoid-bribes-in-international-business-1953575<\/a><\/p> Hedley, Mark. \u201cChina Market Entry Strategy: A Guide To Entering Chinese Business-to-Business Markets.\u201d B2B International. <\/em>https:\/\/www.b2binternational.com\/publications\/china-market-entry\/<\/a><\/p> \u201cHow can companies doing business overseas reduce the risk of corrupt practices?\u201d The Conversation. <\/em>12 Sept. 2017. http:\/\/theconversation.com\/how-can-companies-doing-business-overseas-reduce-the-risk-of-corrupt-practices-83673<\/a><\/p> LeMarco, Nicky. \u201cThe Effects of Corruption on Business.\u201d Chron. <\/em>3 Dec. 2018. https:\/\/smallbusiness.chron.com\/effects-corruption-business-52808.html<\/a><\/p>
Essay for BA390: Principles of Marketing Online
Instructor: Nicole Brown, M.A.
<\/a>March 3rd, 2020<\/em><\/p>\n\n\n\n