Analyzing the case study; crash in the boardroom
Chongqing is the place where the meeting was held. The board was discussing the topic on ethical business practices. Liu Peijin is the president of the Almond China. He is much eager to be in the board meeting to present his concern to the company about what has prevailed in china. With him is Wang Zhibao - the sales vice president for the Chongqing joint venture. He is the best in this field because he has closed many deals since his early years.
The concern was raised by Liu on the rules that are set on the European laws. It was difficult for Almond China to operate because it was under the rules. The issue was about the rule against gifts and commissions. It was widely accepted in China, but against the law according to the European standards. The tactics of giving gifts and high commissions to the best salesperson was applied very much in China. This gave Almond China much competition. In response, Wang opposed by quoting that it was in China but not Europe.
They had to consider that Almond’s headquarters were in Munich and it was listed on the New York Stock Exchange. This implies that it had to adhere to the U.S government rules on foreign competition practices Act. The rules forbade the bribing of foreign government officials by U.S listed companies. Hence, the proposal by Liu would not be accepted.
On the safety and environmental practices, some issues brought a lot of concerns. The production facilities were built according to the German national standards. The safety equipment such as helmet, shoes, and protective clothing were bought in Europe. There was a conflict because the standard facilities were from Germany, and the equipments were from Europe. The Chinese partners called it “the wasteful and frivolous luxuries expenditure”. They said that the young ventures could not afford to purchase them and instead they be allowed to purchase them locally.
On the disposal of the waste product, they agreed to have a special cleaning agent in accordance to European standards. This product was to be treated as dangerous substances. Liu did not compromise this due to his earlier experience in the former company even though it was not part of Chinese law.
After a two week break, the board meeting was held again. Now the issue of the commission was raised again by Chen- the chairman of the joint venture. At this time Liu was much attentive because he had requested the same proposal earlier but it was never accepted. The Chen’s request was responded by Dolf Schulman, the vice president of the venture, and Almond chemicals senior vice-president. They opposed the proposal. They said that Almond is a law abiding firm, and all its employees should follow suit.
Chen’s arguments were based on other foreign owned companies. The issue was that they did reward their Chinese customers for their business. They also organized overseas visits and management training for their employees. He ended by saying that they needed to be flexible, so as to maintain high competitiveness. He wanted appreciation to give them morale to work extra hard. Liu then combined the commission and the trip visit as the business bribery. At the close of that meeting, they agreed that all was for the best of the corporation.
Johnson, Craig E. Meeting the ethical challenges of leadership : casting light or shadow . Calif: Thousand Oaks, 2001.