International Business Case Study 2

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Siemens Bribery Scandal

• What explains the high level of corruption at Siemens? How did managers engaged in corruption rationalize it?

Corruption was a part of Siemen’s Business Culture as it wasn’t illegal before 1999 in Germany and it was deducted as business expense under the German tax code. Managers rationalized it as it was legal at that time and thus the company embedded as high level corrupt business.

• What do you think would have happened to a manager at Siemens if he or she had taken a stand against corrupt practices?

If any manager at Siemens would have stood up against this corruption then he or she would be highly likely to get fired as the higher executives would only keep those managers who fulfill their order and work according to them even if it is illegal.

• How does the kind of corruption Siemens engaged in distort competition?

Siemens give bribe to the government officials of different countries to get the required contract and by doing this they get advantages over the competitor who might have better business strategies than Siemens. By this, the competition in the market decreases and it does not allow new businesses to jump in unless they also do bribery and corruption.

• What is the impact of corrupt behavior by Siemens on the countries where it does business?

The corrupt behavior of the Siemens impacts the countries in the following way:

1. It disregards the competition in the country.
2. It pushes other businesses to give bribe to get their things done.
3. It effects the morality of employees working in such company negatively.
4. It creates a corrupt environment in the country.

• If you were a manager at Siemens, and you became aware of these activities, what would you have done?

First of all, I will try to find whether the executive are part of it or not, if not then I will inform them and let them made the required changes. If they are part of it then I will resign from my job and ask the country authority to take legal action against them.

Walmart’s Foreign Expansion

• Do you think Walmart could translate its merchandising strategy wholesale to another country and succeed? If not, why not?

No, I don’t think Walmart can translate its merchandising strategy wholesale to another country and succeed. In United States wholesale strategy might attract the customers as it offers products in a cheap price but in many other countries the preferences of the customers are different. Walmart has to set its strategies according to customer’s need in order to get the attention of customer towards them and making their business venture successful.

• Why do you think Walmart was successful in Mexico?

As walmart started a joint venture with Cifra, Mexico’s largest retailer so they get to know the requirements of the customers and understand the culture of the country easily. Moreover, Cifra was already working in Mexico so they must have helped Walmart to follow the culture and set strategies according to the requirement of the customers. Walmart fulfilled the needs of customers and as a result became successful in Mexico.

• Why do you think Walmart failed in South Korea and Germany? What are the differences between these countries and Mexico?

As Walmart started its business in South Korea and Germany they already had well established local rivals that provide the customers preferences and fulfill their needs. Moreover, Walmart jump in these countries with the same discount on bulk strategy they provided to the United States customers but the consumers here had different preferences. They preferred higher quality of good instead of discounts. The wrong sales strategy was main reason Walmart failed in South Korea and Germany.

• What must Walmart do to succeed in China? Is it on track?

The Walmart must follow the culture requirements of Chinese and provide them with their needs. As Chinese prefers Fresh food so they should provide them with fresh food and stop keeping refrigerated foods in the stores. Moreover, they should spread unionization in their stores to keep stable in the market. As Walmart is fulfilling all these needs so it seems like they are on their track and stable in such a huge market of China.

• To what extent can a company such as Walmart change the culture of the nation where it is doing business?

World Largest Retailer Walmart can change the culture of the nation where it is doing business to very little extend. Walmart can only make changes which shouldn’t hurt the norms and values of the country. They can use different marketing strategies in order to change the mentality of the people and make them your customers.

Etch-A-Sketch Ethics

• Was it ethical of the Ohio Art Company to move production to China? What were the economic and social costs and benefits of this decision? What would have happened if production had not been moved?

It was ethical of Ohio Art Company to move production to         China otherwise they couldn’t be able to meet their expenses and company would have gone bankrupt. But the way they treated labor in China was unethical as they didn’t even pay them what they deserved.

The economic benefit for China was their labor gets employment and customers get cheap toys but on the other hand people working in this company in Bryan lose employment. Socially, it destroyed Bryan community and provides substandard treatment to Chinese workers.

As the overhead and labor cost in Bryan was high and company couldn’t afford to pay them that much because of less revenue so if they haven’t shifted to China they would have lost their competitiveness and go bankrupt.

• Assuming that the description of working conditions given in The New York Times is correct, is  ethical for the Ohio Art Company to continue using Kin Ki to manufacture Etch-A-Sketch toys?

Ethically Ohio Art Company shouldn’t work with Kin Ki because they are not fulfilling the rights of their labor and not even considering the cultural norm of the society. They can also give a warning to Kim Ki to treat their labor right and sign a contract on which labor right must be clearly mentioned. If Kim Ki fails to meet the requirements of Ohio Toy Company then they can end their businesses with them.