Aassignnment -2 Ethhical Delimmma.docx

5/7/2018

Assignment--2 Ethical delimma

Group Members: Aakash Ahmed Raffaay Rashid Shah

AAKASH AHMED

LENHAGE AG

Q.1: Identify three other sources (Individuals and Organizations) that Weinhardt should consult with for guidance before making his final decision on payment to Mr. Lee? INDIVIDUALS AND ORGANIZATIONS Mr. Weinhardt should consult with his parent company, Lenhage AG because it is important to take their advice when issue is that much sensitive. Mr. Weinhardt knows that parent company wouldn’t allow him. But he should clear everything such as modes of payments, legality in South Korea and all the work that his employees have put in. It is crucial to tell parent company otherwise it would be huge mistake if things won’t workout. When everyone knows about payment decision so decision would be based on consensus and if tomorrow something bad happens Mr. Weinhardt wouldn’t be the one to blame because it was based on consensus. If Mr. Weinhardt takes decision and agrees to pay one percentage to Mr. Lee then it would be considered as fraudulent act and it is against company’s policies because of one project Mr. Weinhardt couldn’t take this decision alone even though if it works out because it takes decades to build a company, and one decision can hurt its reputation worldwide. Secondly, Mr. Weinhardt should consult with local Korean lawyer to take his insights on payment to Mr. Lee. It is clear that in South Korea these kinds of payments are considered legal, and there are other options as well such as creating “sales expense” account which requires no documentation for tax purpose or citizen can open bank account. So these kinds of activities are normal in South Korea but it is very important to know the insights of lawyer and implications of its decisions outside of South Korea on this company. Furthermore, Mr. Weinhardt should also consult with European lawyer and debrief the whole situation to him and take his views on this payment. Then he should reconcile both lawyers’ insightful opinions. Mr. Weinhardt should consult with his family, and tell them about everything because it is very important for him to let his family know his situation. He should also share both benefits and costs of this (payment) decision. Because in South Korea these kinds of payments are not considered illegal but he also has to think about his company policies and its implications outside of South Korea. Further, he

should also mention his career advancement options to his family if they get this project keeping in view its disadvantages as well. Question # 2 Assume that weinhard goes ahead and makes the payment to Mr. Lee as requested, and his company is awarded the contract. Discuss the possible pross and cons of the decision on; Weinhard and his family If we assume that weinhard goes ahead and makes the payment to Mr. Lee for the award of his company’s contract definitely he has to face certain pross and cons of his decision. In perspective of weinhard if he wins this contract it may create opportunity for him to have good relation with his company and could achieve more career success and it would place his company as the dominant or front runner to supply products now and for other projects to come. This will lift company with high growth in the south Korean market. Securing these contracts would boost Lenhage AG’s image internationally and supply it with high profile projects and create globally reputations. But here are also cons because south Korea has its own culture and rules and regulations of law and in their country bride doesn’t matter but if he makes the payment he can have lost his job, because he has from different culture which have different rules and regulations and bribe is treated as wrong act and due to that he could have lost his reputation or he could have jailed and its impact will be on his family because they are dependent and they will also suffer. General public in South Korea Analyzing the critical and ethical situation for Weinhardt to accept the offer of making payment to Mr. Lee, there are many advantages and disadvantages for the company as publicly. First we look at the advantages that Weinhardt would get from this offer. Advantages: There is growth in construction industry. Government had planned to launch eight power generation plants. If Weinhardt accepted offer, he would provide quality

tools, testing facilities, and installations services. This brings coming plants an opportunity to use quality material. The area where plants are being built are affected by tsunami and earthquake , for this there is need of testified constructions tools like anchors, and only Lenhage AG possessed ability to manufacture such testified anchors. If Weinhardt won this offer, he would provide testified anchors to tsunami hit areas. This gives strong and lifelong projects for the public of South Korea. If Lenhage AG won this project, then partnership, trust with Lee’s company, and others future orders would bring success not only for the employees of Lenhage AG but also for the people of south Korea. This is because through more success, Lenhage AG enhance more employability and local people will get chance to getting jobs. Employee are also considered as public. They can also reap benefit from this offer, because they had been working since last years to make project success. They can take benefit in increasing salary and getting promotions. If Weinhardt won this brings stability and financial reward for the employees and for the company which ultimate provide more benefits to the public. Disadvantages Identifying the potential disadvantages to public by making payments to Mr. Lee, we would consider the public, government and employee as whole. On the first hand, Mr. Lee is not government bureau so that all commission would go to corrupt Mr. Lee. If Weinhardt won then others competitors could not survive they would also begin to bribe more to win the contract. If the other competitors could not survive then Lenhage AG get Monopoly behavior in the market. Through Monopoly behavior Lenhage AG can increase the prices which ultimate effect on the customers. Also, through Monopoly, barriers of entry for the competitors would increase. This brings fluctuations in the quality.

It could be result of losing jobs if these actions come up on the social media and also would bring shame and instability for the company which would result close the company. Here, government also would not benefit, because amount from bribe never shown and government would taxes.