Bexhill’s CEO discovers that in short-term contracting with Okoli duri

QUESTION

Bexhill’s CEO discovers that in short-term contracting with Okoli during survey activities but before Okoli had secured the long-term operations contract, Okoli made a payment to Bexhill.

Which of the following, if true, best suggests that the payment was ethically acceptable?
A) There are no laws against such payments in Nigeria.
B) Okoli received the use of some of Bexhill’s equipment in exchange.
C) The payment was made via a third party affiliated with Bexhill.
D) All the other top Bexhill executives were aware of the transaction.
E) Bexhill had considered other contractors in Nigeria for its long-term operations.

ANSWER

Answer: B
Explanation: B) If the payments were made in exchange for services rendered, then that ensures that they were not made as a bribe to help Okoli secure the long-term contract. Choice A notes that the payment didn’t violate Nigerian law. Such payments could still be illegal by U.S. law, and in any case, legality by itself cannot ensure ethicality. Choice C: The fact that the money was exchanged via an indirect route suggests that the payments may have been unethical in nature. Choice D: Because executives were aware of the transaction does not mean that it was ethical—there are many examples (Enron, WorldCom) of corporate ethical scandals that involved broad executive involvement. Choice E would tend to strengthen the case that the payment was a bribe to ensure that Okoli would receive the long-term contract.