Doing Business in a Connected Society: The GSK Bribery Scandal in China

34 Pages Posted: 17 Mar 2015

See all articles by Cindy A. Schipani

Cindy A. Schipani

University of Michigan, Stephen M. Ross School of Business

Junhai Liu

Renmin University of China - Law School,

Haiyan Xu

University of Michigan Law School; University of International Business and Economics (UIBE) Law School

Date Written: March 2015

Abstract

Focusing on the bribery scandal plaguing global healthcare giant GlaxoSmithKline LLC (GSK), this manuscript documents and offers proposals to redress the myriad of harms caused when multinational corporations (MNCs) accept bribery as an unspoken cost of doing business in connected societies. Despite its history of being a connection-based society, Chinese culture does not condone commercial bribery. Recognizing this important distinction, we argue that bribery committed by MNCs is a threat, not only to China’s burgeoning market economy, but also to Chinese culture. Responding to this threat, and drawing on international anti-corruption regimes, our manuscript outlines reforms that GSK and other MNCs might adopt in order to prevent their employees and directors from falling prey to unspoken rules of corruption.

Keywords: Bribery, Corruption, Corporate Governance, China, Chinese Culture, Comparative Law, Foreign Corrupt Practices Act, Corporate Social Responsibility

JEL Classification: G38, M14, L20, L21, L22, K10, K14, K22, K33, K42

Suggested Citation

Schipani, Cindy A. and Liu, Junhai and Xu, Haiyan, Doing Business in a Connected Society: The GSK Bribery Scandal in China (March 2015). University of Illinois Law Review, Forthcoming; Ross School of Business Paper No. 1268. Available at SSRN: https://ssrn.com/abstract=2579040 or http://dx.doi.org/10.2139/ssrn.2579040

Cindy A. Schipani (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI 48109
United States
(734) 763-2257 (Phone)
(734) 763-2257 (Fax)

Junhai Liu

Renmin University of China - Law School, ( email )

59 Zhongguancun Ave.,
Haidian District
Beijing, 100872
China
86-139 1093 6920 (Phone)

HOME PAGE: http://www.chinacapitallaw.com

Haiyan Xu

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States

University of International Business and Economics (UIBE) Law School ( email )

No. 10, Huixin Dongjie, Room 724, Ningyuan Buildin
Chaoyang District
Beijing
China

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