Corrupt Buyers in the Market

A Negotiation Expert Answered:

"An ounce of prevention is worth a pound of cure"

Corruption is a plague not only on the salesman's market but probably in every area of our life. It raises the costs and risks for doing business. Today, corruption is a front-line issue in the negotiations between the World Bank and many of the countries the World Bank is involved in. It is also a subject of many purchasing negotiation research studies. Corruption is a problem in international business transactions, economic development projects, and impedes transparency in global economies.

How to find a way out? One of them is try to build a coalition with other sellers in your market to balance your power against buyers. Although its your competitors whom you would create a coalition with, the problem of corruption affects all the sellers and buyers in the market. We recommend against giving bribes, however give consideration to the local country's customs. Giving a bribe may also create a precedent. Will the buyer quit there or will they expect another even bigger bribe later or next time round? You should inform the management of your company about this problem and how it affects your activities. Do you have their support against buyer corruption? Maybe it would be good to arrange a meeting between the heads of your company and the buyers company. If the situation is approved by the other side's, you should know that corruption is illegal in most countries and you have recourse to legal action. Of course all sales should take place with due respect paid to prevailing local country practices and norms. So consider whether bribes are considered common practice in your country to gain appropriate context.

We find it regrettable that ethical companies who refuse to pay buyers bribes are penalised by being uncompetitive compared with their competition who do give bribes.