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This is a really tough question, especially for businesses that operate in countries where corruption is normal.
For businesses in a less corrupt country like the US, I would say that giving bribes helps companies in the short term but hurts them in the long term. If a company gives bribes, it can win contracts and things like that, which would be a major short term goal.
However, the firm would not be winning because it is a good firm. It would be winning the contracts through corruption. Then the firm would have no incentive to improve its efficiency or its quality of service or anything like that. This would mean that the firm would become less and less competitive because it would not really be competing -- it would just be getting business through bribing others.
Good question. Many advertizing gimmicks operate on this premise. I looked at a scholarship offer today for $5000. The promoter was offering 4 scholarships at that pay-out to any high school senior, college or grad school student. All they had to do was purchase a particular book, read it, and write an essay about it. So, what is the purpose of the so-called scholarship? You guessed it, seller the promoter's book.
In this situation, I think they will see their business (in this case a new author) temporarily given attention, but I was most certainly put off myself and took note of the names attached to the project ... including the publisher.
When the bribes cost them more than they are making, and when consumers are distracted and put off by the gesture, they most certainly hurt their business. But they can't know unless they try. Many businesses operate this way. There are free offers in my inbox and mailbox every day.
Giving and taking of bribes has both ethical and legal implications. In general the legal system in any country is framed with the objective of ensuring that in general people or companies indulging in practices prohibited by law will stand to be losers in the long run, although they may get some advantage in the short run. Therefore a company indulging in bribery definitely risks harming its long term business interests.
The relationship between unethical behavior and its adverse consequences are similar to that between illegal behavior and its consequences. But, in case of ethics, the relationship between the action and its long term impact is less direct as compared to that in the case of law. Also, there are no clearly defined boundaries of the ethical and unethical behavior. Because of this individuals often fail to recognize the negative effects of unethical behavior. But the importance of ethical behavior in business is as real as that of legal behavior.
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