I once trained, as consultant for a German conglomerate in China, door-to-door vacuum cleaner salesmen (and women) in sales techniques: 15 cities over six months, approximately 500 trainees. So that I might observe their skills, together we knocked on doors in row upon row of newly built, as yet only lightly soiled, apartments.
It is not an easy life, is sales. But door-to-door separates the men from the boys. Perhaps 100 visits, 10 demonstrations and one sale per week. Usually disappointing, physically exhausting, sometimes dangerous work. Many quit; some thrive. One young man who’d consistently brought in superb results demonstrated a machine to a wealthy young mother in a penthouse in Shanghai. I told the CEO that this fellow was so persuasive that even I was moved to buy the product. (But not moved to take out my wallet. The maid preferred a wicker broom, so we stayed with that.)
You will thus understand my interest in the firing of several of Avon’s management in China for alleged violations of an American law. Persistent readers of this blog (my hat is off to you all!) will know of my distaste for the Foreign Corrupt Practices Act (FCPA), some of which you may find explained here. Bloomberg reports:
The company suspended the four in April 2010 as part of an internal investigation into its compliance with the U.S. Foreign Corrupt Practices Act. The executives included the general manager and finance chief of the company’s China unit, which generates 2 percent of Avon’s revenue. Other employees could be affected, according to the May 3 filing.
There appears to be no indication of the purpose for which or to whom the “questionable payments” were made. No allegation of theft has been made. The FCPA prohibits certain payments to government officials: payments which are ordinary and necessary in the course of business. We can thus assume that the Avon executives in question, who are held responsible for growing the 2% of Avon’s revenue it clearly needs for its balance sheet, allegedly made payments to Chinese government officials in the course of business.
It is more than simply curious to see that the federal government spends taxpayer dollars and administrative energy on the regulation of — yes, ordinary and customary conduct — of American companies overseas when it hasn’t even the budget to support its own domestic regulatory functions. The FCPA should be repealed.
The Avon, Door-to-door Sales and the Foreign Corrupt Practices Act by AsiaBizBlog, unless otherwise expressly stated, is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.