How would you like a free donut? A free Slurpee? A free dinner or holiday? How about someone paying your bills? These offers are tempting, but there can be a price to pay – as Canberra discovered this week.
On Wednesday, Labor senator Sam Dastyari quit the frontbench after he failed to adequately explain why his personal debt of A$1,670 was paid by Top Education Institute, a company with a strong link to the Chinese government. Further, Yuhu Group, also linked to the government in China, reportedly paid Dastyari’s A$40,000 legal bill.
During the election campaign, Dastyari made comments about the South China Sea issue that were different to Labor policy. He said:
The South China Sea is China’s own affair, Australia should remain neutral and respect China on this matter.
Dastyari’s problems bring to mind an ancient saying: “Beware of strangers bearing gifts”. The original quote by the Roman poet, Virgil, is politically incorrect these days – “Timeo Danaos et dona ferentes”, or paraphrased as “Beware of Greeks bearing gifts” – but it refers to the story of the Trojan horse. A gift of a giant wooden horse hid Greek warriors who at night opened the city gates and defeated Troy. This is a clear warning about accepting gifts.
Concerns about gift giving
Giving and receiving gifts is generally a good thing. We love to exchange presents at Christmas, or receive gifts for a birthday.
In some cultures, gift-giving is an important social custom or ritual related to events, occasions and personal or business dealings. This is particularly important for the Chinese, for whom giving gifts is an expression of honour and respect, and shows the relationship is valued.
But line between gifts and corruption can easily blur.
Some Australian organisations have established policies on accepting and giving of gifts, to scrutinise the timing, cost and intention. The New South Wales Department of Trade and Investment states:
Staff must not give or accept gifts and benefits that will compromise, or appear to compromise, their integrity and objectivity in performing their duties or cause, or appear to cause a conflict of interest.
Other government institutions and departments have rules about not asking for gifts, not accepting money, not accepting gifts that could influence or be perceived to influence decisions or actions, and disclosing any gifts.
Government is not the only environment where concerns are raised about freebies. The fast food industry has been criticised for giving samples of their product for consumers to try, which promotes unhealthy food and therefore, obesity. 7-Eleven has a Free Slurpee Day on November 7, and Krispy Kreme celebrates National Donut Day (June 3) with free original glazed donuts.
Celebrities are not immune to gifts. This year’s Academy Awards nominations gift bag of clothes, jewellery, food, travel and pampering was reportedly worth $US232,000. The celebrities would probably never put their name behind any of these gifts, but having them in the gift bag can give them the publicity to associate the company’s brand with the stars.
More concerning is the pharmaceutical industry. Drug companies are unable to advertise directly to the consumer, so they promote their pharmaceuticals directly to doctors.
Gifts given to GPs – including pens, notepads, lunches, dinners and “education” events in exotic locations – not only promote awareness and goodwill to the drug companies, they encourage doctors to prescribe more of the company’s products.
A business perspective
So why do businesses give gifts?
There can be a variety of reasons. Generally, the aim is to generate support for the organisation’s overall objectives. This could mean promoting the products, brand name, or brand image; to increase awareness and goodwill towards an organisation; and, eventually, achieving the objectives of awareness, sales, profits, or even donations.
If a person gives you a gift for free, you will have a positive opinion about that person. If a company gives you a gift for free (for example, a donut), the company’s marketers hope you will have a positive opinion about the organisation. Maybe because of this incentive, you will consider buying their product or influencing others to buy in the future.
The more expensive the gift, the more positive the organisation will expect the opinion to be, particularly if the gift is given to a person with a degree of power or influence. This expected positive opinion can also lead to an expected positive action towards the gift-giver as a reward, even having some influence over the receiver’s future actions: “I scratch your back; you scratch mine”.
If the intention for the gifts is to influence behaviour and decision-making, this creates a major ethical dilemma, which is why organisations develop policies and standards in the first place. This week is a good time for politicians to be reminded of the policies and standards their own departments work to, and for them to do the same.
As they say, there is no such thing as a free lunch – go ask a Trojan.
Authors: David Waller, Senior Lecturer, School of Marketing, University of Technology Sydney