courseworkhero.co.uk

Richard:

In the Case of the Million-Dollar Decision, there is a very important ethical dilemma that they are facing with the culture in China.  Pegasus wants to expand into China because they see a huge upside for their wireless products based on the issues with the older infrastructure in place now.  But their immediate issue is the way China makes decisions at a local level and that payoffs are needed in order to get the frequencies approved locally (Hacksworth, n.d.).  Now they have told the CEO this and he is aware of this issue, but he wants to know how other companies that are already doing business in China are getting around this.  His employee tells him that other companies provide a middle man keeping the main company at arms length and the middle man company does the negotiating and any required bribes needed, keeping the primary company out of the direct involvement in any participation in a bribe (Hacksworth, n.d.).

Knowing that this may be his only option in order to get his companies products into China, the CEO is perplexed because of the company core values with integrity and intellectual honesty.  However, the CEO is going down a slippery slope because now that he knows about the payoff approach, he cannot ethically say he was not aware of it.  This makes him ethically responsible for any actions taken in this situation where a bribe would be presented in order to buy into the local districts for the selling of his products.   Taking the Aristotle approach, the action the CEO takes the lead on setting the environment under which his employees will operate (O’Toole, n.d.).  If he overlooks this situation to make $100 million a year knowing the payoffs occur, then his employees will see that there are exceptions and as long as maybe I am at arms length, it must be accepted because the CEO endorsed this action.   While the article does not go into what decision was made, when you evaluate the core values of the company, it appears to me that it is unlikely that the CEO would authorize selling product into China under this payoff model of operation.

 

Hollis

In the article “the Case of the Million-Dollar Decision”, the CEO of Pegasus International Inc. Tom Oswald and his division managers discuss the possibility of them entering China’s market to capitalize on a potential business venture.  Tom confers with his managers about the advantages and disadvantages of Pegasus entering China’s market because he believes this is a great opportunity to expand their business and increase profits in the process.  However, Tom is concerned that in order to enter China’s market they will have to go against many of the ethical standards that their organization and its staff have built their reputation on. (Hackworth, M. & Shanks, T. S., 1998)  

     One of the main ethical dilemmas they will have to face is whether or not participating in the paying off (i.e. bribery) of a government official to get the licenses they need to conduct busy is something that they want to be a part of. (Hackworth, M. & Shanks, T. S., 1998)  Another issue here is that China is a developing country that really doesn’t have a set of ethical standards that its citizens live by according to the article, “Business Ethics in a Global World: an Introduction to the Issues”. (Steen, M., 2007) The author also notes that the Western philosophy (i.e. the U.S.A.’s ethical standards) that organizations like Pegasus International are founded on have tried to infiltrate their way into developing countries like China thus making it harder for those organizations to thrive and many often times fail. (Hanson, K. & Rothlin, S., 2010) The reason many Western companies fail when trying to go global is because of cultural, competitive, economical/political conditions, and ethical values in the host country that differ from their own making it hard for the two to assimilate views. (Hanson, K. & Rothlin, S., 2010)  

     For instance, in China it’s culturally acceptable for their CEO’s and top executives to receive expense gifts or money when negotiating business deals. (Hanson, K. & Rothlin, S., 2010) Although it’s normal for companies like Pegasus International to partner with a contractor of the host country to do all the leg work when getting the licenses they need in China because they are familiar with their customs. I also believe it would be unethical for Pegasus International to hire a contractor in China to do the leg work of getting licenses needed to conduct business knowing full well that they will be required to “pay off” government officials occasional in order to do so. (Hackworth, M. & Shanks, T. S., 1998) This kind of behavior violates the virtue approach to ethics which says, “our actions should consistently line-up with certain virtues that will add to the progressive improvement of our character.  Many of these dispositions and propensities should enable us to manifest values like honesty, truth, fidelity, integrity, fairness, and self-control which will help us to respond to others within the highest possible level of our character.” (Velasquez, M. 2009)  In my opinion, any organization that would hire someone else to do their dirty work isn’t really being honest, truthful, or operating with integrity which means their actions are truly unethical. 

     Also, I believe this becomes an ethical issue for Pegasus International originally because Tom Oswald is the type of leader that believes in acting ethically as an organization and that’s why he decides to solicit counsel from his executive team before proceeding. (O’Tool, 2009) He believes that as an organization, “he has an obligation to engage with his executives about the possible ethical issues that will arise should they decide to enter China’s market.” (O’Tool, 2009)  In addition, Pegasus International has a social responsibility to conduct business in an ethical manner.  As a result of policies enacted such as the foreign corrupt practices act on 1977, “it is illegal for organizations to pay bribes to foreign officials in order to assist them in anyway with the obtaining of business ventures.” (White, M., Aguilar, L., Gallagher, D., Stein, K., and Piwowar, M., 2012)