Case Analysis Corruption in China
Case: Coping with Corruption in Trading with China.
Corporations across the globe deal in international business practices every day. When a company must to do business in countries with a high level of corruption, a company should have a plan that helps to maintain control over a key piece of intellectual property or some production process component that allows company to maintain power in the relationship.
Most of these processes and practices are legal and ethical, following the laws and regulations of various international governments. Some of these practices are just the opposite, illegal in eye of American company but viewed acceptable in other cultures. Many countries are involved in bribery which makes many American companies not only unethical to give in to bribery and other corrupt business practices but unlawful. This case is just an example and representations of what companies are willing to do and how much money they are willing to pay to enter a contract with China or their market. Most of the payments and other favors are made to establish guanxi in China. Gunaxi means “connections” and it is important part of the Chinese culture. According to Western standards most of these connections which include gifts and bribes are illegal but must be done in order to successfully deal with Chinese businesses. This case presents with various illegal and some legal types of payments.
1. List all the different types of bribes, payments or favors represented in this case under FCPA, Criminal Law of PRC and Law against Unfair Competition of the PRC. Why is either legal or illegal?
The biggest incentive for Chinese official is travel. Business trips that are sponsored by International companies can be legal, where a foreign company invites an official to get to know the company better and visit a factory in the home country of the company, which is considered as legal activity. Costs of staying in expensive hotels, golfing lessons and small stops in
Corporations across the globe deal in international business practices every day. When a company must to do business in countries with a high level of corruption, a company should have a plan that helps to maintain control over a key piece of intellectual property or some production process component that allows company to maintain power in the relationship.
Most of these processes and practices are legal and ethical, following the laws and regulations of various international governments. Some of these practices are just the opposite, illegal in eye of American company but viewed acceptable in other cultures. Many countries are involved in bribery which makes many American companies not only unethical to give in to bribery and other corrupt business practices but unlawful. This case is just an example and representations of what companies are willing to do and how much money they are willing to pay to enter a contract with China or their market. Most of the payments and other favors are made to establish guanxi in China. Gunaxi means “connections” and it is important part of the Chinese culture. According to Western standards most of these connections which include gifts and bribes are illegal but must be done in order to successfully deal with Chinese businesses. This case presents with various illegal and some legal types of payments.
1. List all the different types of bribes, payments or favors represented in this case under FCPA, Criminal Law of PRC and Law against Unfair Competition of the PRC. Why is either legal or illegal?
The biggest incentive for Chinese official is travel. Business trips that are sponsored by International companies can be legal, where a foreign company invites an official to get to know the company better and visit a factory in the home country of the company, which is considered as legal activity. Costs of staying in expensive hotels, golfing lessons and small stops in