Juan M.
Piera
Session #3
Synthesis Paper #2, Session 3
Juan M. Piera
FIU EMBA MBA
Juan M. Piera
Session #3
Synthesis Session #3: Bribery & Ethics in the Business Environment
Our form of democracy is bribery, on the highest scale. Gore Vidal
On or about 1970 Western companies started to pay attention to bribery and how it could
no longer be the cost of doing business.
Part 1
When a multinational company decides to make a Foreign Direct Investment, or FDI, it
must take several factors into consideration. The FDI will inevitably involve more commitment
and a greater degree of participation than licensing or trade. This is why regional awareness will
become paramount in succeeding in an emerging market such as Africa or Latin America. Over
the last years, China has opened 32 new Confucius Institutes all over Latin America, a Chinese
foreign ministry deputy announced. 1 China is not only trying to learn about other cultures but
also exporting theirs to partner countries in order to create a more stable environment in their
FDI commitment. Chinas investment in Latin America even goes beyond energy concerns. In
Brazil, Chinese automakers have captured a percentage of the auto market that rivals American
firms. China is not only investing, but also extracting natural resources in the process.
Consequently, this leads us to believe that there is no such thing as a free lunch.
In addition, Chinas economy thrives on taking natural resources and manufacturing
products that can be resold in partner countries. For example, this can be quite evident in their
relationship with Africa as by their large scale acquisition of land to be used for agricultural
Juan M. Piera
Session #3
production and bio-fuel diversification. Africa benefits from increased exports which are onethird of its total exports, but what are they losing in the process? It is interesting to note that
the areas of sub-Saharan Africa that have the greatest land values are closely correlated with the
areas with the largest amounts of land being taken.2
Furthermore, in order to avoid the pitfalls of the past, Africa and Latin America need to
develop sound and open investment processes, which allow for monitoring and the strong
enforcement of their indigenous policies. Africa above all needs to avoid the resource curse
which is evident in that 85% of its valuable resources are petroleum, metals and agricultural raw
materials.
Part 2
The case of Foreign Direct Investment: Irelands Tiger Economy also provided an
example of how another country which had far greater advances and was considered first world
can also fall prey to overselling their country as a foreign investment opportunity. In the end,
tying its economic strengths to mostly American investments set them up for a fall with the Great
Recession of 2008. As Irelands GDP lowered, and sales fell, the countrys reserves were eaten
away by unemployment and the lack of linkages with indigenous industry. Moreover, these
linkages would have provided a bulwark against the departure of industries that Ireland
incubated with enticing tax rates for their foreign investors. As Ireland looks forward, they see
that they must not race to the bottom and provide for a young, growing highly educated
workforce. There is hope that Africa and Latin America could learn something from Irelands
example.
Juan M. Piera
Session #3
The case Nutrisoya v. Sunrich: Anatomy of a Sales Dispute proves that a business should
never be sparing with an attorney or an accountant. The contract between both parties, which
was an international joint venture, clearly revealed that many terms in the agreement were open
or ambiguous. Keywords as explained by Dr. Perry can be a scaffold of the legal document.
Most contracts have notices or provisions that provide the protection for both parties if it
becomes necessary to settle a dispute in the courts. At times a well written contract will prevent
further court mediation, especially in an international dispute. The terms of the contract take into
consideration problems that may arise in the future from the joint venture of both parties. Since
both parties did not have a clear understanding of practices or economic conditions of each other,
something as simple as an insurance clause overlooked the exchange rate of currency.
Part 3
In my work environment of IT Management, contract negotiation with vendors at times
have provided me with an opportunity to examine how my organization can be impacted by
signing first and then reading later. The careful review of the Nutrisoy case provided a concrete
example of how in my position there are opportunities to increase my companys leverage with a
vendor. In looking for details within an agreement, not only do I protect the interest of the
school, but possibly set up future opportunities for negotiation of better rates or increased service
levels by said vendor.
Juan M. Piera
Session #3
References
"Jose Marti Quote." BrainyQuote. Xplore, n.d. Web. 30 Jan. 2015.
China. China's Influence in Latin America Is Increasing (n.d.): n. pag. Web.
Sparks, D. (2012). Large Scale Land Acquisitions In Sub - Saharan Africa: The New Scramble?
International Business & Economics Research Journal, 11(6), 691-691.
