Consider these real-life situations faced by executives in global corporations.
A local political leader has demanded a payment to help settle a labor dispute that he has engineered; he implies that if you refuse, the outcome could be unpredictable and bad for business. Eventually, he mellows and agrees to accept a check payable to a school for poor children that he runs. Should you pay?
A routine audit by the tax authorities has developed into a wider investigation. After two months, they have found no evidence of tax evasion but their demands for information are increasing and proving a distraction to the company’s employees. Tax evasion is a criminal offense in this country but the inspector offers a solution: if you hire a tax accountant or consultant of their choice for $100,000, the investigation will be wound down. What should you do?
Your company is due a substantial tax refund from the local government of one of the countries where you operate. This amount is now 11 months overdue. The global CFO is under pressure to write off the amount, but such a write-down will wipe out your annual profit; employees will have to forgo their bonuses for no fault of theirs. It is becoming clear that without a payoff, this refund will not happen in a reasonable time.
