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

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