The scenario plays out all too often in emerging markets: A company wants to get a new facility up and running as quickly as possible and assigns a manager to deal with regulatory obstacles. The local official who could unjam things suggests getting together over a nice meal rather than simply meeting in the office. The conversation at the table might focus on obscure zoning issues, or unpublished changes to regulations, or something equally inscrutable. What these issues have in common is that they “need to be resolved” before the project can move forward. The official makes it clear that for $500, he can make them go away. The payment would be illegal, but the company will gain millions in revenue by opening the facility sooner, and the manager has thousands of dollars in bonuses riding on the project’s success. What should he do?
A version of this article appeared in the September 2012 issue of Harvard Business Review.