The availability of high bandwidth around the world is just one of the factors spurring the use of offshore outsourcing (which we consider simply a specialized form of telework). Today's Washington Post article 4 Executives Out in Lucent Bribe Probe (By Christopher Stern, April 7, 2004) showcases another risk inherent in the practice: the risk of managing the complexity of multiple countries, multiple cultures, and multiple governing laws.

"Lucent Technologies Inc. yesterday said the president of its Chinese subsidiary and three other executives had left the company after an internal investigation found possible violations of a U.S. law that prohibits paying bribes while doing business overseas."

"The problems were discovered during a review of business practices at 23 major foreign subsidiaries including operations in Brazil, India and Russia, Lucent said. The company said it found no violations of U.S. corruption laws in any other country."

Lucent's China subsidiary represents 11% of its revenue, and employs 10% of its workforce with over 3,000 people. Lucent initiated the global audit after the SEC and Justice Department began investigating it for compliance with the U.S. Foreign Corrupt Practices Act in their dealings with officials in Saudi Arabia. If charged, the company be fined up to $2 million, while its executives could face up to five years in prison and fines of $100,000.  

11:44:45 AM    
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