During the 1970s, the United States government passed the Foreign Corrupt Practices Act, following the revelations that U.S. companies were bribing foreign government officials in an attempt to strengthen business ties and financial agreements. The law made bribing foreign government officials illegal, and made it mandatory for companies to keep detailed records of business deals and transactions in order to officials to determine if any violations of the law had been committed. To no surprise, the globalization of U.S. business ventures has exponentially increased since the 1970s, and even though the Foreign Corrupt Practices Act is still enforced, U.S. corporations participate in bribery and other illegal business practices, sometimes through no fault of their own. .
The Coca-Cola Company has saturated the world over with their products, now serving soda in more than 200 nations. But rapid expansion into international venues has come with a price; as Chairman Douglas Daft points out that building business overseas requires dealing with the devil and other questionable characters. Each time Coke enters a new country, or attempts to compete with other soft drink companies in a current international venue, it has to contend with the local traditions of that nation, including the bribing of officials and paying retailers to shun the competition.
The problem lies in the hands of the bottlers. Coke utilizes small private businesses in foreign countries to create and bottle its soft drinks and distribute them to local grocery stores and roadside vendors. Coke supplies the businesses with the necessary ingredients and supplies and then reaps the profits. Coke has control over the businesses, yet keeps its liability low, thus avoiding the foreign businesses" debts. Even though Coke exercises control over these independently run bottling companies, local traditional practices become the norm, which includes bribery, money laundering, and assassination of whistle-blowers.