Aveda Institute Chicago GlaxoSmithKline analysis in China Case Study

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Description

Description

Quelch, J.A. & Rodriquez, M.L. (2013). GlaxoSmithKline in China (A) HBS No. 9-514-049. Boston, MA: Harvard Business School Publishing. Purchase the case directly from Harvard Business Press as part of a case pack for this course. See "Individual Assignments Overview" above for a link.

You are free to do additional research/reading on the GlaxoSmithKline scandal, and in fact some research is expected if you want an A; however, see the note below about citations.
Scenario
Jane Broadhurst, CEO of a company based in the USA with subsidiaries in the United Kingdom, is contemplating moving some of her company's operations to China. However, she has read about the GlaxoSmithKline (GSK) bribery scandal. She understands that the climate for foreign companies operating in China is different, and she is concerned.

Ms. Broadhurst asks you, as her vice president for international operations, to assess the GSK case. In particular, she wants to know what lessons her company can learn in order to reduce its risks, should she decide to move some operations to China.

Questions to answer
Ms. Broadhurst handed you this list of questions, please respond and justify your answers:

GSK had publicly touted its robust ethics and compliance program, including a “3rd Party Code of Conduct” for suppliers. Despite that, the scandal happened. Of the different potential roots of unethical behavior discussed in the text, which ones do you think were most responsible for the ethical violations occurring? Briefly explain your reasoning, citing specific details from the case.
Write a sentence or two evaluating the events of the scandal using each of the following philosophical approaches (as discussed in the text). Did the company behave in a way consistent with each approach or not? Make sure your answer is specific to this situation by including a relevant detail or two in each answer:
a. Friedman doctrine
b. Cultural relativism
c. Righteous moralist
d. Naïve immoralist
e. Utilitarian ethics
Assess GSK’s response so far. Are the initiatives that GSK has implemented to address the bribery problems sufficient, or should they have done additional things (and if so, what)?
What actions should Ms. Broadhurst's company take to avoid a similar situation? How can she reconcile local expectations of payments with both the U. S. Foreign Corrupt Practices Act and the U.K. Bribery Act?


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Explanation & Answer

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Running head: GLAXOSMITHKNINE ANALYSIS IN CHINA

GlaxoSmithKline Analysis in China
Name
Institutional Affiliation

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GLAXOSMITHKLINE ANALYSIS IN CHINA

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GlaxoSmithKline (GSK) Analysis in China
The major roots of ethical violations in the scandal
The failure of GSK’s corporate governance policies was the main responsible potential
cause of the company’s bribery scandal. GSK China claimed that fraudulent behavior and ethical
misconduct was a violation of the company’s governance standards amidst the ongoing
investigations on the company’s practices. This demonstrated that GSK had governance systems
and procedures in place that could have addressed bribery and corruption within the company but
they failed (Schipani, Lui & Xu, 2016). Besides, GSK President International affirmed the
existence of corporate values and policies that are against unethical behavior when he met with
officials from the Chinese Ministry of Public Security. He shielded the global GSK group from
being associated with the bribery scandal that was perpetrated by GSK China executives who
were aware of the firm’s governance policies.
Since five top officials of GSK China were found guilty of breaching the anti-corruption
laws, it proves that there was a failure in how corporate governance ...


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