The principal goal of the Paris-based Organization for Economic Cooperation and Development (OECD) is to promote market-oriented economic growth and development around the world. As part of its activities, and because of its moral force in the economic community, the OECD has long promoted ethical and socially responsible behavior by companies of its member states, as discussed in Chapter 11. The principal means through which this objective is pursued is through the promulgation and support of the OECD Guidelines for Multinational Enterprises. These guidelines represent a set of normative, yet voluntary, guidelines for global managers and their firms that are aimed simultaneously at developing the economies of less developed nations while protecting them from exploitation by large and rich companies from the industrialized world. These guidelines aim to ensure that the operations of these enterprises operate in harmony with local government policies, to strengthen the basis of mutual confidence between global firms and the societies in which they operate, to help improve the foreign investment climate, and to enhance the contribution to sustainable development made by global companies.

The OECD Guidelines are divided into five categories: bribery and corruption; employment relations; technology transfer; environmental stewardship; and general business practices (see Exhibit B.1).

Bribery and corruption

The OECD Guidelines place considerable emphasis on corruption and bribery. In brief, these guidelines proscribe the following:

• Payments to public officials. Managers are not allowed to offer, nor give in to demands, to pay any portion of a contract payment to public officials or the employees of business partners. Nor should they use subcontracts, purchase orders, or consulting agreements as a means of channeling payments to public officials, to employees of business partners, or to their relatives or business associates.

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