1916 words 8 pages
GlaxoSmithKline in China
Case Study 1
Khoa Nguyen
AMBA 660 9043

Introduction There has been a lot of increase in expanding companies throughout other countries. In order for a CEO of a company based in USA to move some of its operations to China, it’s best to understand the foreign and local policy that is in placed in China and the bribery scandal that involved four employees of GlaxoSmithKline. This case study will examined the GSK scandal by analyzing the case that involved the four employees, the Chinese government, assessing GSK’s response, lessons learned in order to provide the USA based company to operate at a lower risk and succeeding in China.
Question 1
GSK has featured its robust ethics and compliance
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GSK should have learned from the mistake made in the United States and find ways to better improve their policy and catching their employees. This was essentially their second chance. Because of this, GSK was treated fairly. GSK had an unfortunate situation in which they were caught for bribery since its common in the industry (Quelch & Rodriguez, 2013). Two legislation, Foreign Corrupt Practices Act of 1977 and Bribery Act 2010 were passed by the United States and United Kingdom in order to prohibit such act in other countries. GSK should be well aware of the punishment that comes for bribing. In China, doctors do not make a lot of money as compared to other countries and furthermore, they are banned from taking on additional jobs for additional income (Quelch & Rodriguez, 2013). Therefore, it would make be easier for companies, such as GSK to briber these doctors in prescribing their drugs in order to make more money and provide a living. Not only does bribery happened at GSK in China, but there has been other incidents such as AstraZeneca who had to pay the US government $520 million in 2010 and Johnson and Johnson who had to pay the US government $21.4 million for bribery in 2011 (Quelch & Rodriguez, 2013). There’s an old saying that “money is the root of all problems” and from these experiences, it’s unfortunate that GSK was caught by the Chinese government but bribery is