Case Study:SNC-LAVALIN GROUP INC.by Steven L. McShane, Curtin University (Australia) and University of Victoria (Canada)Bribery of foreign public officials, conspiracy to commit fraud and forgery, money laundering, possessing property obtained by crime, and attempts to secretly smuggle the son of a former dictator into safer countries. Sounds like the plot of a twisted crime novel. Yet these are the charges laid against former executives at SNC-Lavalin (SNCL), one of Canada’s largest engineering and construction firms.The Royal Canadian Mounted Police allege that over a decade or longer, SNCL funnelled more than $120 million through offshore bank accounts as bribes to secure contracts in Libya. Separately, the World Bank, the African Development Bank, Swiss police, and other entities uncovered evidence that SNCL bribed or attempted to bribe government staff and leaders to win contracts in Africa and Asia. SNCL is also being investigated for unethical activities in contract bidding on a major Canadian project involving a Montreal superhospital. Almost a dozen former SNCL executives, most of whom held senior positions, either face charges of criminal activity or are under investigation. The company and its 100 subsidiaries have been banned for a decade from bidding on World Bank–funded contracts.The World Bank and other investigators report that in several contracts SNCL processed bribes through an expense line called “project consultancy cost” or PCC. For example, SNCL recently settled a corruption case filed by the African Development Bank, which had discovered project consultancy cost items representing 7.5 percent of the total contract value of two SNCL road projects in Uganda and Mozambique. The engineering firm has acknowledged that none of these expenses were legitimate. “Everybody used this term, and all know what that means,” admits SNCL’s former director of international projects. “Sometimes it was ‘project consultancy cost,’ sometimes ‘project commercial cost,’ but [the] real fact is the intention is [a] bribe.”SNCL paid many of the PCC bribes indirectly through employees. One SNCL engineer in Nigeria said he was told to use his personal funds to pay a Nigerian official for a “soils investigation.” The official had selected the engineering firm for a contract. The engineer was subsequently reimbursed by SNCL through a fictitious company. When asked why he participated in the kickback scheme, the engineer (who now works in India for another company) replied: “When the boss asks, in that part of the world . . . what would you do if you were put in my shoes if you were in a remote area of Nigeria?”Another way that SNCL executives apparently bribed officials was through “agent fees.” Retaining a local agent is common and sometimes required for foreign contracts bids to arrange permits, imports, and other activities. However, investigators uncovered numerous questionable transfers of large funds from SNCL to banks in Switzerland, the Bahamas, and other countries. The largest corruption of the “agent fee” process involved SNCL Page 61transferring more than $120 million over 10 years to a Swiss bank account controlled by a SNCL executive vice-president working in North Africa and later at headquarters in Montreal. The executive was subsequently convicted and served jail time in Switzerland for corruption and money laundering regarding these funds, $47 million of which he handed over to Swiss authorities as part of that conviction. During the Swiss trial, the executive admitted that he bribed Saadi Gaddafi, a son of Libya’s dictator at that time, for the purpose of having SNCL win five major contracts in Libya. In separate charges, an RCMP affidavit claims that the same executive masterminded a failed attempt to smuggle Saadi Gaddafi and his family into Mexico. A former SNCL contractor in Canada spent 18 months in a Mexican prison in relation to that mission. SNCL is suing the executive convicted in Switzerland and others for recovery of the transferred funds, claiming that they were intended as legitimate agent fees. The executive counterclaims that the top brass (below the board level) had arranged or knew these funds were being used for bribery payments and that the executive was following orders. Separate actions by SNCL’s CEO at the time lend support to the jailed executive’s claims. Specifically, in spite of opposition from the chief financial officer and head of international operations, the CEO authorized undocumented payments totalling $56 million to unknown “agents” in Libya and Bahamas. Quebec’s anti-corruption police say the CEO’s largest undocumented payment ($22.5 million sent to the Bahamas) was a bribe to win a major Montreal superhospital contract. The CEO resigned when an internal review informed SNCL’s board of the CEO’s actions. The board granted the CEO a severance payout, but the severance payments were later stopped when Quebec’s anti-corruption police charged the former CEO with fraud. Another SNCL vice-president now facing several charges also admits to engaging in bribery and related crimes. He explained that SNC-Lavalin had “a corporate culture where it was common practice to do all that was necessary, including the payment of ‘commissions’ and other benefits to obtain contracts, including in Libya.” The second executive also argued that he was under pressure to engage in these illegal activities because the executive above him said “that he had to follow their orders to satisfy their expectations.” In fact, a few former SNCL executives have since tried to sue the company for wrongful dismissal on the grounds that their illegal activities were required by the company to keep their jobs.SNCL’s board of directors seems to have downplayed personal responsibility for these events. Very early in the RCMP investigation, SNCL’s board received an anonymous internal letter describing the bribery activities, yet the board later admitted that it only “took note” of the allegations, pointing out that they have “received anonymous letters before that have no credibility.” And when the extent of wrongdoing at SNCL eventually became public, the board chair said: “Clearly, our board of directors can’t govern something that they don’t know about, or prevent something they are not aware of.”Discussion QuestionsUse the MARS model to discuss the main direct predictors of wrongdoing at SNC-Lavalin.Explain how moral sensitivity and moral intensity apply to the unethical behaviour among several SNC-Lavalin executives and other staff.What steps should SNC-Lavalin and other companies in this situation take to minimize these types of corporate wrongdoing?

You own a nonunion company with 93 nonexempt employees. All of these employees pack books into boxes for shipment to customers throughout the United States. Because of wide differences in performance, you have decided to try performance appraisal, something never done before. Until now, you have given every worker the same-size increase. Now you want to measure performance and reward the best performers with bigger increases. Without any further information, which of the five types of appraisal formats do you think would be most appropriate? Be sure to justify your decision.   How would you introduce this system to employees working at your company?  Do you anticipate any complaints, or other comments, from employees after you implement your new system?  Design a simple format for the appraisal system based on the examples of the five types and criteria identified in Chapter 11.  Chapter 11 of this book " Newman, J.M., Gerhart, B., & Milkovich, G.T. (2017) Compensation, 12th Edition. New York: McGraw-Hill Education."

In week one, you completed a discovery (prewriting) activity,  created a narrative outline, and drafted the introductory paragraph of your essay.  This week you will draft and revise your narrative essay and submit it for assessment.  The essay should show planning, revision, a  clear thesis statement or main idea, paragraph organization, purpose and direction, and effectiveness of conclusion. It should reflect feedback you received from your instructor on your outline and demonstrate understanding of the writing process. There are several resources to assist you including the graphic below, a revision worksheet you should review after drafting your paper, to help revise/edit/proofread for final submission. Narrative Essay Instructions:  The following criteria reflect the areas needed for a successful narrative essay. The essay should have a clear purpose and a main idea/thesis statement within the first paragraph. The narrative should share a larger lesson with the audience than simply retelling an event.  A strong narrative centers on a conflict building from introduction to body to a thought-provoking resolution.  It should use descriptive language to bring the reader into the experience.  Please see pages 89-92 for more details about the qualities of an effective narrative essay. Choose one of the following topics: What personal goal or achievement are you most proud of?  Share the story of the moment you reached that goal. What one event brought you closer to your family?  Describe that day. Was there an event in your life where you made a mistake or misjudged a situation?  Describe how the event occurred and what you learned from it.