Aug. 20, 2020
Moore School alumnus Jeremy Martinez’s (’20 finance and international business) South Carolina Honors College case study thesis was recently published by Ivey Publishing. A collaboration with Moore School faculty, Martinez’s case study focused on a bribery scandal involving Cognizant Technology Solutions, an American information technology outsourcing company with operations in India.
A finance and international business major and French minor at USC, Martinez first learned about business ethics and potential consequences of violations in his international business and Honors College course taught by Daniel Ostergaard, an international business clinical associate professor. Martinez later saw a posting on an international business student forum by Wolfgang Messner, also an international business clinical associate professor. Messner was looking for a student to research a case study with him on a recent incident involving Cognizant.
The Cognizant case “forced me to come to terms with the fact that the answers to the questions ‘what is right or just?’ and ‘what is best for the business?’ may often be at odds,” Martinez said. “My involvement in this case represents the strong network in the Moore School international business community,” emphasizing that he’d never met Messner until he saw the request for research assistance and that Ostergaard became the second reader for his thesis.
According to the case study, Cognizant was forced to pay a total of $28 million in penalties to the U.S. Securities and Exchange Commission and the U.S. Department of Justice in February 2019. While expanding the company in India, certain bribes were paid to Indian government officials so they could prematurely obtain building permits and permissions.
“My biggest takeaway was the fact that any company with securities regulated by the U.S. Securities and Exchange Commission, regardless of their home country, are subject to the U.S.'s Foreign Corrupt Practices Act — perhaps the most effective international anti-corruption law in history,” Martinez said. “That is to say, those companies that might face more lightly enforced anti-corruption laws at home face a [more severe] American set of ethics and laws, too. These laws not only apply to the companies but also to the individuals working for them.”
Messner said the Cognizant case and their case study provides valuable lessons for international business students.
“First, I want students to understand how a bribe payment in emerging markets works,” Messner said. “Cognizant as an American company did not pay the bribe directly to the Indian government official but instructed a third party, the Indian construction company L&T, to pay the bribe and asked L&T to inflate their bills toward Cognizant. It’s like using an agent to pay the bribe and thereby trying to keep the ethical higher ground.”
Martinez and Messner thoroughly explain the bribery scandal in the case study; they explore how the new CEO hired in April 2019 could move the company forward after the ethics violations and prevent future incidents of corruption. Most of their research into the case came from USC’s Library databases and journal articles, Martinez said. They also read news articles from American and Indian sources.
Ultimately, Martinez said he gained a broad understanding of international business practices while researching the case study, which is appropriate for undergraduate-, graduate- and executive-level courses in international business, business ethics and management.
“Laws and share price aside, I learned that upon deeper inspection of business processes, especially employee and client acquisition, the benefits to operating as an ethical, law-abiding, well-reputed company far outweigh the potential gains of acting unethically or outside of the law,” he said. “Good companies want to do business with good companies.”
Currently working as a political campaign consultant in Winnebago County, Illinois, Martinez intends to enroll in law school in fall 2021.