(This post was originally published on June 22, 2013 as An innovative bribe!)

Some years back, the company I worked with represented a manufacturer of industrial automation systems. A reputed private sector company was extremely keen to buy 48 units of one of our newly introduced products, but since the product was being used for the first time in India, they decided to place a trial order for 2 units, and buy the remaining 46 units only after the first 2 units had worked well for a few months. All terms of the trial order had been finalised over a day-long meeting at the customer’s factory, and we were requested to return the next day to collect the Purchase Order and to discuss the pre-installation preparations.

As we drove back to our hotel, the manufacturer’s Sales Director told me he was certain that the Facilities Manager expected a kickback. When I pointed out that the Facilities Manager had not asked us for a kickback even though there had been numerous occasions when he had been alone with us, he insisted it was very clear from the Facilities Manager’s body language that he expected a kickback. In any case, the Sales Director insisted that we should leave no stone unturned to ensure that we finally got the order for the remaining 46 units. He took pains to assure me that the 2% kickback would be borne entirely by his company. When I continued to express my opposition, he said that he would handle the matter himself.

The next day, soon after we entered the Facilities Manager’s room, the following conversation took place:
Sales Director: Sir, I am sorry we did not discuss earlier about your cut.
Facilities Manager: How much can you offer?
Sales Director: 2% on the ex-factory price.
Facilities Manager: That’s too little. Make it 10%.
Sales Director: 5% is the maximum.
Facilities Manager: Make it 7.5%.
Sales Director: Sir, 6%, no more.
Facilities Manager: OK. There’s no need for any ‘cut’. However, thank you very much for the 6% additional discount! We will prepare the Purchase Order accordingly.

The Facilities Manager had handled the situation extremely well. He had demonstrated that honesty and street-smartness can go hand in hand!


8 thoughts on “Honesty

  1. I suggest everyone today must read ‘India Uninc’ written by Prof. R. Vaidyanathan, of
    IIM-B (2014 Westland Books) P.343 Rs. 395. The learned Prof. has a unique take on bribery and corruption, what is known to an average Bharatwasi as ghoose, chaipani, sulpa adjust maadi, hafta and in sophisticated circles as cut, rent seeking, speed or lubrication money or even facilitation or upfront fees, ‘own account collection’.

    Today not only is bribe demanded from issuance of birth to death certificate but percolated to the private sector as well and rampant with the Purchase and the Quality Assurances Departments being the prime ‘demanders’! Doctors to issue bills and medical certificates to enable patients to claim reimbursements. No wonder our Mediclaim Health Insurance cover premiums are seen to shoot through the roof – the genuine suffer because of the many fake claimants!

  2. I don’t know whatever name you call it by: Cut / Commission / Bribe / Payoff / whatever, it only makes the giver’s & taker’s position weaker in the long run. Word spreads that XYZ can be bought & so after sales service suffers. This also affects the morale of the junior staff & they too tend to slack off. I like the way the facilities manager outsmarted the sales manager. Lesson learnt for him, I suppose.

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