Like in most business, most problems in the QC industry come from human factors. The main challenge to proper execution of our mission is without any doubt the risk of corruption of inspectors in factories.
There are basically two types of bribery:
- Outright corruption, where (generally) an envelope of cash changes hands. All inspectors know it is forbidden and they are taking risks.
- A more subtle game, and certainly more frequent, where the supplier treats the inspector in a way that makes it nearly compulsory for him to repay these favors. The force at play is social pressure. This is what I am studying in this post.
Why is it difficult for inspectors to avoid social pressure, and why is it compulsory to pay the supplier back? All inspection firms make it clear to their staff that it is forbidden. Yet I have seen many Chinese inspectors being passive victims of savvy suppliers.
I found some insightful elements of response in Influence: The Psychology of Persuasion, a bestseller written by Robert Cialdini (a professor of psychology). It helped me respond to several questions:
Why would an inspector feel like he has to pay back the supplier’s favors?
In some cases, inspectors feel the obligation to report their findings in a manner that is more positive to the supplier:
The rule [of reciprocation] says that we should try to repay, in kind, what another person has provided us.
By virtue of the reciprocity rule, then, we are obligated to the future repayment of favors, gifts, invitations, and the like. so typical is it for indebtedness to accompany the receipt of such things that term like “much obliged” has become a synonym for “thank you”, not only in the English language but in others as well.
After intensive study, sociologists like Alvin Gouldner can report that there is no human society that does not subscribe to the rule. And within each society it seems perversive also; it permeates exchanges of every kind.
Then, why don’t inspectors always refuse transportation and lavish meals provided by suppliers, since their employers reimburse this type of costs?
Some inspectors emit signals that they would appreciate a ride to the factory, or a nice lunch. But does it change something if it is the supplier who invites them, or even forces their hand? Apparently not:
“Another person can trigger a feeling of indebtedness by doing us an uninvited favor.”
Another social scientist, Marcel Mauss, described the social pressures around the gift-giving process in a very clear way: “there is an obligation to give, an obligation to receive, and an obligation to repay.”
This is the heart of corruption by social pressure… It can be either active or passive, but the result is the same!
But is it possible to refuse the first gift, to avoid feeling indebted?
Absolutely, it is possible. But very difficult. A local inspector naturally feels social pressure.
Cialdini describes an extreme situation where a a sect guru in Guyana called for the mass suicide of all residents, in 1978. One woman did not comply and left the village:
She attributes her unwillingness to do so to her earlier refusal of special favors from him when she was in need. She turned down his offer of special food when she was ill because “I knew once he gave me those privileges, he’d have me. I didn’t want to owe him nothin’.”
This is the key: if an inspector does not want to be biased in his reporting, he should not ask nor accept any favor from factories. But that means he should be prepared to be rude to the supplier, because that’s what it takes to be faithful to his employer.
Bottom line: if you pay your inspectors well and they feel good about their company, they will try not to play these games. If you pay them a “competitive salary” and the only thing you do is check on them, as the large QC firms do, your inspectors will not fight social pressure.
How strong is social pressure in China?
According to many social studies, the rule of reciprocity works in all human societies.
I am certain that social pressures around gifts, favors and rituals are stronger Chinese culture than in most other cultures. And, to make things even worse, the Chinese don’t distinguish their personal and professional relationships as clearly as we do in Europe or in the US…
Implications for inspection firms
Unless we pay inspectors above market price, make them feel part of a team, and make them feel they are making progress in their job, we run a high risk of inaccurate reporting because of these human factors.
Another solution would be to bring foreigners in China to perform inspections… But that’s not realistic on a large scale.
My brother and I run a small factory in Taizhou, Zhejiang province, we would look at the issue differently, Renaud.
We, as supplier, don’t like to pay purchasers/quality inspector commission, we don’t like to bribe them unless we have to. In the business practise, the purchaser and quality inspector will ask for benefit(commission, money, gift, meal, or sex bribe), we are confident in the competitiveness of our products, the quality, the price. But in many cases, if we refuse their request, we will lose the order, we will fail the test, we will lose the business.
We are not alone, as I have worked in 5 to 6 companies, from manufacturer to trade company, the situation are all the same.
I would look at the issue from society development point of view. I mean the lgeal system, the penalty system or to put it precisely, the law enforcement in China are not mature or developed enough to tackle the commercial corruption issue, commercial corruption is no difference to corruption in the politcal area.
@ Steven: You are right, it definitely works both ways.
Inspectors and purchasers demand some benefits by using their power in the relationship. Then it becomes usual for (but highly resented by) suppliers to provide benefits, simply because it is expected.
Once a factory has concluded that it is part of business, it is will do it systematically. For example, the driver has instructions and a special allowance for it.
It seems like most inspectors appreciate it and enjoy it, unfortunately. Of course, internal auditors in inspection firms make it clear that it is forbidden.
I agree with you, these “benefits” will be present as long as they are not regarded a corruption and are not punished.
I had a factory manager from Yong Kang City call me and say he forgot to bribe my QC Inspector and could he pay me? I had to laugh, I told him that we don’t take bribes. Our service has a 100% guarantee to our customer. His shipment failed and it had to be re made to the required standard.
Yes, some factories really have no concept about what is to be avoided with foreigners. And you can send them all the terms & conditions & warnings you want, even in Chinese and in 25-point font, they just don’t read it and don’t care.