I have an ethical question. I own a business that provides services to corporations, both public and private. Today at lunch I was having a conversation with my business partner. He brought a proposal from a large public company's purchasing manager who had made it known to my business partner (since they were childhood friends) that he would give us this fairly substantial project if we offered him a kickback of 20% of the project cost, discreetly payable to him outside of the USA in cash. This purchasing manager would rubber-stamp approve our bid, even if it is high because we have to cover his kickback. I told my business partner that his friendly purchasing manager was not only doing something illegal, but also that he was unethical. I told him that we should not deal with such persons.
My business partner posed this question to me - "How is this unethical? We routinely visit purchasing managers of other public companies and we take them and their key personnel out to lunch or to dinner to tell them of our services. Are we not also 'paying them off' with the cost of a meal?"
I could not come up with a satisfactory reply other than saying that buying lunch for someone versus giving them a direct, and illegal, kickback was a large difference in degree. One was done out of social custom and customer outreach, whereas the other was done out of malice with the intent to defraud public shareholders.
But on a philosophical note, I could not defend myself satisfactorily in this case. Please advise.