Good Case Study On Central Problem
Pegasus International Inc. is guided by various values that have contributed to its leadership in the manufacturer of integrated circuits and related software. The firm intends to expand into the international market by expanding its business to China. However, the company is required to pay the “payoffs” in order to acquire the license. This is because frequencies are allocated, and the franchise decisions are made city by city, district by district in the country. However, the managers found this as an ethical problem because it violates the core principles of the company. The franchise decisions and the frequency allocation should not be made in the manner that the decision maker has to receive a “payoff.” There should be fairness in the provision of licenses. Paying the “payoffs” to acquire the license is against the company core values such as honesty, integrity, and the respect for the individual. However, failure to pay the payoffs, the company will lose an opportunity to earn approximately $100 million annually. As a result, this presents the company with an ethical dilemma.
Other existing companies in the industry have been paying the agent to pay bribes on their behalves to help the CEOs evade the instances of bribing for their companies. The Pegasus is doubtful and reluctant of such an action. The principal hires the agent to act on his behalf, and the principal is, therefore, responsible for the agent’s actions. Therefore, if paying the bribe is unethical, then the Pegasus International Inc. could not escape the responsibility of paying a bribe via agent. Consequently, the company should consider the whole scenario of paying a bribe, whether directly or by using an agent is an unethical decision.
The Pegasus International Inc. doesn’t want to pay bribes to qualify in doing business in China since the action will taint their excellent reputation.
Over the past, Pegasus Company has established a good reputation that has boosted its marketing success. Integrity and Intellectual honesty demonstrated by the company eliminates any chances of the executive to participate in bribing the involved parties to acquire licenses to operate in China. The Company’s values act as a guideline that helps the management to ensure that they conduct fair business. Upholding the core values will positively influence the consumption behavior, and this will create a large customer base (Boulstridge et.al 6). Pegasus CEO Tom Oswald has played a significant role in ensuring that his company reputation remains outstanding amongst the competitors. For this reason, a good reputation has resulted to a positive consumer purchasing, and this must be protected at all costs.
The CEO must avoid falling into the trap of paying bribes to be issued with the license to operate in China. Other competitors have been acting via agents to penetrate the China market. The actions are very unethical since the companies are responsible for any actions taken by their agents. The poor behavior conducted by other companies taints their image, and this destroys their reputation. Tom Oswald has always believed in public confidence, and this is the reason he will never allow anything to interfere with his integrity in the management. The best decision that the company can take is to ensure that it ignores the set conditions of acquiring the operational license in China. Getting involved in paying the bribe is an unacceptable behavior that can expose the Pegasus International Inc. to numerous sanctions from the consumers.
Boulstridge, Emma, and Marylyn Carrigan. "Do consumers really care about corporate responsibility? Highlighting the attitude-behaviour gap." Journal of Communication Management 4.4 (2000): 355-368.
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