IA1
GlaxoSmithKline in China
Case Study 1
Khoa Nguyen
AMBA 660 9043
Introduction There has been a lot of increase in expanding companies throughout other countries. In order for a CEO of a company based in USA to move some of its operations to China, it’s best to understand the foreign and local policy that is in placed in China and the bribery scandal that involved four employees of GlaxoSmithKline. This case study will examined the GSK scandal by analyzing the case that involved the four employees, the Chinese government, assessing GSK’s response, lessons learned in order to provide the USA based company to operate at a lower risk and succeeding in China.
Analysis
Question 1
GSK has featured its robust ethics and compliance program, even a “3rd Party Code of Conduct” for suppliers. What went wrong? What are the main external and internal factors that encouraged the GSK bribery scandal in China? Which, in your opinion, are more important? Explain your position.
According to Quelch & Rodriguez (2013), GlaxoSmithKline (GSK) is a pharmaceutical company that started off as an import-export business in New Zealand and has expanded into a worldwide firm with offices in United Kingdom, India, South America, China, Malaysia, and Greece (Quelch & Rodriguez, 2013). DRS explains one of the challenging factors is changes in political situations and government policies (DRS, 2015, p 7). Because of that, GSK has a strict policy on regulations breaches, fraud, bribery and corruption. Upon arrival, every GSK employee goes through training on the “Code of Conduct” that teaches employees how to conduct business with “honesty and integrity and in compliance with all applicable legal and regulatory requirements” by:
Always acting legally and fairly, within the spirit of all laws, regulations and policies
Not offering illegal inducements
Looking for principles, not loopholes
(Quelch & Rodriguez, 2013). GSK has a “3rd Party Code of Conduct” that requires all 3rd parties to
Case Study 1
Khoa Nguyen
AMBA 660 9043
Introduction There has been a lot of increase in expanding companies throughout other countries. In order for a CEO of a company based in USA to move some of its operations to China, it’s best to understand the foreign and local policy that is in placed in China and the bribery scandal that involved four employees of GlaxoSmithKline. This case study will examined the GSK scandal by analyzing the case that involved the four employees, the Chinese government, assessing GSK’s response, lessons learned in order to provide the USA based company to operate at a lower risk and succeeding in China.
Analysis
Question 1
GSK has featured its robust ethics and compliance program, even a “3rd Party Code of Conduct” for suppliers. What went wrong? What are the main external and internal factors that encouraged the GSK bribery scandal in China? Which, in your opinion, are more important? Explain your position.
According to Quelch & Rodriguez (2013), GlaxoSmithKline (GSK) is a pharmaceutical company that started off as an import-export business in New Zealand and has expanded into a worldwide firm with offices in United Kingdom, India, South America, China, Malaysia, and Greece (Quelch & Rodriguez, 2013). DRS explains one of the challenging factors is changes in political situations and government policies (DRS, 2015, p 7). Because of that, GSK has a strict policy on regulations breaches, fraud, bribery and corruption. Upon arrival, every GSK employee goes through training on the “Code of Conduct” that teaches employees how to conduct business with “honesty and integrity and in compliance with all applicable legal and regulatory requirements” by:
Always acting legally and fairly, within the spirit of all laws, regulations and policies
Not offering illegal inducements
Looking for principles, not loopholes
(Quelch & Rodriguez, 2013). GSK has a “3rd Party Code of Conduct” that requires all 3rd parties to
References: Daniels, J. D., Radebaugh, L.H. & Sullivan, D.P. (2015). International business. (15th ed.). Upper Saddle River, NJ: Prentice Hall/Pearson Education. Fox, T. (2014). GSK in China: A Game Changer in Compliance. Retrieved from http://www.uleduneering.com/fileadmin/user/Multi-Media/LF2014/GSK%20in%20China-A%20Game%20Changer%20in%20Compliance%20By%20Thomas%20Fox.pdf. Quelch, J. Rodriquez, M. (2013). GlaxoSmithKline in China (A). Harvard Business School. Retrieved from https://cb.hbsp.harvard.edu/cbmp/content/34297188.