Beruflich Dokumente
Kultur Dokumente
MULTICULTURAL
DOMAIN
NES CHINA CASE
Topics to be covered
Macro-social and micro-social contracts
NES Background and relations with China
The problem and ethical dilemma
Steps taken so far and deadlock
Bounded Rationality
Rationality in economic ethics is bounded by:
finite human capacity to assess facts
Micro-social contracts
The desire :
(a) to enhance efficiency by reducing uncertainty (rice and rubber) and
(b) to maintain freedom of cultural, ideological, or religious interpretation (Muslim
managers teachings of Mohammed ; HP creative chaos)
imply that contractors will choose terms of the macro-social contract that allow the
generation of specific community-level moral norms regulating economic activity
Claim that a particular practice may be ethically permissible because "everyone is
doing it" is common in business ethics
COMPANY BACKGROUND
Founded in Germany in 1881, one of the largest industrial group, sales revenue of
$14b in 1997
Products : steel tubes and pipes, heavy machinery, automotive systems and
components, hydraulic, pneumatic and electrical drives, telecommunications
services
Holding company: NES AG , 11 subsidiaries , 4 business segments
Business operations in more than 100 countries with 1.2 lac employees and
decentralized subsidiaries worldwide
Committed to move along with globalization and internationalization
Responsible towards not only to shareholders, employees and customers but also
to society and to the countries it operates
Follows a code of high personal and business ethics in dealing with government
officials and customers
Relies on advanced technology and top quality rather than tendering immediate
favors or rewards to individual Chinese officials
Provided training to Chinese engineers, craftsmen, technicians and scholarship
program for young Chinese academics to study in Germany
Currently doing business through representative offices
ETHICAL DILEMMA
Suggestion to invite the officials to dinners and give gifts to help accelerate the
application process
Jochen Steinmann and Dr.Jean Perrins belief :
Gift-giving is equivalent to bribery and would potentially damage NES high
standards of business and personal ethics
Preference of a formal negotiation with the officials
Chen felt that NES has limited bargaining power in this scenario
Thus, dilemma is whether to allow gift giving or not to the Chinese officials so that
NES AGs application for a holding company in China could finally move forward
DEADLOCK
Cultivation of personal guanxi in Chinese business culture
IMPLICATION
The ethical difference in western and Chinese culture
NES had a strong code of ethics that clearly outlined that bribes or gifts were not to
be given to government officials
Chinas culture required that guanxi be established with officials of the Central
Department
ALTERNATIVE SOLUTIONS
Second negotiations with officials after revising the application
Give the contract to a third party for successfully approving the application
THANK
YOU