Aside from the noted flaws of the index, it has been shown to be useful to give managers an idea of the amount of corruption they will face when doing business with a foreign country. Reportedly bribery is not only rampant but expected from foreign companies who deal with countries at the bottom of the list. However, this creates an ethical dilemma for US managers, as you are expected (although in most cases not legally required) to follow to rules of BOTH countries. Hence, just because bribery of government officials is ok in countries like North Korea, does not mean you can ethically do so since it is not acceptable in the US. Do you believe that this ethical code is effective in preventing US firms from engaging in these activities in corrupt countries? Why? Honestly speaking, would you forgo a profitable venture in another country if you would be forced to bribe a government official there, even if bribery is expected and accepted there? Explain your rationale.
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