Nes China Case Study
Case study on NES China – Business ethics 1.Problem Statement The case about a company NES which is a Germany-headquartered multinational company that builds heavy machinery, automotive systems, electrical drives and steel tubes and pipes It began business in China since 1889, with 20 representative offices, 6 equity joint ventures, and 3 wholly owned enterprises. Now The Company wants to set up a holding company to facilitate its manufacturing activities in China. The case brings about the conflict between Western and Chinese business practices and protocols resulting in ethical dilemma. 2.Central issues of the case (2x2 matrixes) | | Importance | | | High | Low | Urgency | High | Obtaining approval for the holding
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This action of giving money to government officials may therefore be regarded as bribery; as a result involved parties may be penalized or even end up in jail. The Stakeholders may also decide to withdraw investing in such a corrupt environment. Secondly, it is undeniably true that local culture plays a tremendous role in a local business environment, therefore we must also argue with regards to culture. As far as Chinese culture is concerned, the need of maintaining networks or relationships (locally known as Guanxi) in business environment is tremendously important and it is deeply rooted in the Chinese people’s DNA and other Asian countries that are also influenced by the Teachings of Confucius. Social and humanized obligation (renqing) and the notion of cace (mian zi), were among other things that were highly emphasized and helped to build up the Chinese culture .According to Chen for example, she argues that gifts are offered to establish relationship with government officials so that they get motivated to handle their application legally but without delay. This is contrary to what the Chinese Law Stated “giving gifts of any kind to the government officials with intent of taking advantage of their position and power to conduct illegal action is bribery”.
6. Possible alternative solutions
Based on the analysis above, the following