Case Study on

ALEXANDER GAVIN’S DILEMMA: Cultural Relativism and

Business as Usual.
 Alexander Gavin’s Dilemma

April 10, 1983 Dear Professor Hennessey:

I have not talked with you since my participation in The Executive Program at Tuck
School in the summer of 1978. Many times I’ve hoped I might come back to visit but
my life has been one surprise after the other, and I have been too busy to take any
vacations in recent years. I want to tell you about a situation that happened to me
recently. I know you will be interested in it, and if you have time I’d like you to tell me
what you would have done had you been in my position. As I think you know, I am
Senior Project Manager for the El Sahd Construction Company in Kuwait. The company
is a prosperous one, with an excellent reputation for producing in a timely and cost-
effective way on major construction projects in the Middle East. The Chairman and
Chief Executive Officer is a well-known Kuwaiti and my direct boss is another American
expatriate who is Senior Vice President for urban construction projects. Two months
ago, we put in a bid to be the principal subcontractor on a project in Iran. Our bid was
$30 million, and we expected to bargain with Ajax, Ltd., the British-based company
asking for the bids. We had built a heavy profit into the $30 million. I was asked to go
to Tehran on March 3rd to talk with the Ajax manager of the major project. That
manager told me that we were going to get the job. I was delighted. The job meant a
lot to us. We had put a great deal of planning into it, and it was exactly the kind of
work that we do best. Then came the surprise. I was told our bid had to be $33 million.
My response was that we can always raise our price but that 1 would like to know why
we were being asked to do so. The reply was, “Our way of doing business requires that
because $1 million will go directly to the Managing Director of our Company in
London. I will get Si million and you, Alexander, will get $1 million in a numbered Swiss
account.” “Why me?” I asked. “Because we need to have you on the hook as insurance
that you will never talk about this with anybody else.” I went back to Kuwait to ponder
the matter. I was particularly disturbed because I had heard of cases like this in which,
should the bidder fail to cooperate, the next message was that physical harm might
be part of the exchange. I had been involved in “payoffs” before. They are a common
part of doing business in the Middle East, but I had never been in a situation where I
was being coerced into taking a “cut” myself. I didn’t like that. It went against my
ethics. At that point, I really didn’t know what to do. I thought, among other things,
how helpful it would have been to put my dilemma before a Tuck class and listen to
the discussion.

Sincerely,

Alexander Gavin

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Summary:
Alexander Gavin is a senior project manager for the El Sahd Construction Company in
Kuwait faced an ethical dilemma in his work place. EI Sahd is well known and
prosperous construction company of Kuwait and they want work with British based
company Ajax limited for their Iran Project for $30 million. After a fruitful discussion
with Ajax Project manager in Tehran, El Sahd was going to get the job, but a surprise
came out for Alexander. The project Manager of Ajax proposed that El Sahd going to
get this job if they make the bid for $33 million. The reason for extra $3 million is that
$2 million will go directly to the Managing Director of Ajax Company in London, and
Project manager of Ajax and, Alexander, will get $1 million in a numbered Swiss
account for not make it confidential, and if he do so, than he will get physical harm.
This condition makes Alexander uncomfortable and create a dilemma in his ethics.

Rational Model of Decision Making:

It’s a four step process that helps managers weigh alternatives and choose the
alternative with the best chance of success.

This case has been attempted to resolve with the Rational Model of Decision Model

Investigate the Situation:

There are three types of aspect in Investigation, which are:

 Problem Define: From the case study it’s found that, this project is very
important for El Sahd Company. Extra $3 million put in the circumstance where
his ethics. Extra $3 million bribe does not make him happy and also it includes
physical harm to Alexander if he disclose it with other. This situation put him
into morality issue and he don’t understand what should he do, to get this job
done with or without bribe.
 Diagnose the Cause: The root cause of Alexander is that he is very honest and
ethical person and also very sincere toward his work. This bribery offer shake
his norms and values and on the other hand it’s the only way to get this job
from Ajax Company. Also if he disclose this with others than he will be harmed
physically so it’s very tough situation for Alexander. He wants to get this job as

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  it’s profitable to El Sahd Company but he don’t want to take bribe as it’s
unethical.

 Identify the Decision Objectives: Alexander wants to get this job without
affecting his personal ethics and norms. This will helps to achieve
organizational objectives.

Develop Alternative:

To solve this problem, Alexander can set a few alternatives through brainstorming.
The alternatives can be;

a. He can deny the proposal and cancel the bid.

b. He can ask help from corruption committee or police and sue a file against
Project Manager of Ajax Company.

c. He can contact with other manager or higher authority of Ajax Group to inform
them about this corruption

d. He can communicate with his director as he have to explain for extra $3 million.

e. He can accept the proposal by informing to El Shad’s top management

f. He can accept the proposal without informing any one.

g. He can accept the proposal and use that money for CSR activity and other
charity propose.

Evaluation of alternatives:

Now he must be evaluate the alternatives and choose best alternative so that
organization can get its work done without hurting his personal belief. He should
consider few factors to select best alternative. He should consider feasibility,
satisfaction and consequence of outcome of alternatives to choose best one.

From my point of view, he could accept the proposal and inform it top management
of El Shad’s only and use that money for CSR activities. As Alexander heard this type
of case before and it is a common part of the Middle East country so, it is cultural

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Relativism and he has to understand this. As a Senior Project Manager for the El Sahd
Construction Company, he should not think only for his personal interest or belief, he
should think about his subordinate and company's benefit and the common good. As
he told that, this contract is means a lot for El Shad's, so he should inform this to the
top authority of his company and accept this and use that money for a good purpose.

If he chooses to reject the proposal or involve legal action or complain to Ajax

Company than it will be harmful to his physical life and the company’s own interest.
So it’s better if he chooses to take with informing his top authority and use the full
amount for CSR or charity organization.

Implement the Decision:

After selecting the best alternative now it’s time to implement to get the job done.
Alexander should accept the bid with extra $3 million and inform to his top director
and keep it confidential between him and his top authority and should not disclose to
anyone, not even to the Project Manager of Ajax Company otherwise this can cause
harm to Alexander. No harm will be done to him and his personal ethical belief
through this alternative and El Shad’s can get its job done, make an intimate
relationship with Ajax. El Shad’s should use this money for any good purpose. This $1
million can be used for CSR activity or charity or donate to deprived people of society.

Conclusion

In the end, we can come to the conclusion that Alexander should think about his
subordinates and the common good of organization rather than his personal interest,
moral belief and should accept the deal and use that money for the good purpose of
society. Top authority of El Shad Construction should keep this confidential for the
company’s own benefit.

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