From market to market, a thin line exists between gift-giving and bribery. Discuss this statement with examples. Can psychic distance help an international what constitution ethic behavior in an overseas market?

From market to market, a thin line exists between gift-giving and bribery. Discuss this statement with examples. Can psychic distance help an international what constitution ethic behavior in an overseas market?

A gift is defined as the transfer of something without the expectation of receiving something in return. Gift is known as small tokens of appreciation, more cherished for their intrinsic value. In addition, gift is a perishable good that be shared by many. For example, if I invited my friend come over to my home for Christmas and my friend brought a bottle of wine and a box of chocolates, that is a gift, they are small, they have come to my house to celebrate Christmas, and the gift  fit within the occasion. Then we can most likely to determine this is a gift.

Bribe is defines as an illegal payment from one parties to another, usually in return a legal favour. IF a company gives a token that has high value and can be traded in the marketplace to the country office, it is considered as bribe instead of gift giving. For example, if you were a public official and I came to your house for Christmas and bought a diamond necklace and Rolex watch along with the wine and chocolates, it is clearly not a gift, it is likely to influence someone in your position. This gift may then become a bribe.

Gift are presented with expectations of other rewards is considered as bribe. Norway's Statoil (STO ), for example,  paid a $3 million to settle criminal charges that a consulting firm acted improperly on its behalf to secure contracts in Iran. This action is then considered as bribe.

However in today’s society, it is very hard to distinguish the different between bribe and gift giving. Different countries have their own specific culture to definite what is bribe and what is gift giving. For example, many countries such as in North America or the UK, gift giving is rare in the business world. In fact, their specific culture acknowledges the gift may carry negative connotations as gift giving could be seen as bribery.

Eventhuoght, gift giving which appears to Western eyes as "corruption", however in some countries, their specific knowledge acknowledge this to be a gift-giving. For example, the Chinese plaintiffs usually holding a generous feast for judges before trial; the Taiwanese law states that "legal bribes" must be in red envelopes. Those above countries culture see this as a gift giving instead of bribe. 

Psychic distance is defined as the distance between the home market and a foreign market, resulting from the view of both cultural and business differences. Cultural understanding of what constitutes a gift or a bribe is important for firm before they want to invest in the oversea market. For example, in Vietnam, their cultural acknowledge “under table money” as a gift giving. However, if a company who provides “ under table money” to American officers, they may consider this as a bribery.

The communication between international company and local counterparts for requirement in social and business expectation. For example, before company want to invest in US, they have to know their law and social expectation such as they disallowed company to use child labour and not allow for gift giving.  Those are the ethic behavior they need to follow, if they do not follow the law, they will be punished by the government.