Assignment:
PART 1:
Case study:
RJR formed a joint venture with Gallaher Group PLC in 2002 to produce and sell a limited variety of American-blend cigarette brands that will be marketed in France, Spain, Italy, and the Canary Islands. The company, known as R.J. Reynolds - Gallaher International Sarl, is based in Switzerland. RJR has a large global presence, with subsidiaries in 57 countries including Finland, Vietnam, Poland, and Tanzania. RJR now controls nearly 4 percent of the international cigarette market and has witnessed a 75 percent global sales increase since 1990.
Global sales now account for 41 percent of the tobacco sales for RJR. RJR purchased a majority share of the Tanzanian Cigarette Company in 1995 for $55 million. This was the largest single investment in the country since it achieved independence in1961. The Dar Es Salaam plant was quickly renovated and will soon produce 4 billion cigarettes per year, making it one of the largest producers in Africa. RJR’s facilities also operate in Turkey where they account for half of the country’s exports. (David, 2005, p.430)
1. Illustrate the difficulties of establishing and managing a subsidiary in terms of strategic ethical considerations – not only because of differences in corporate (organizational) cultures, but also in national cultures and laws.
2. Explain in your own words why RJR prefers to work with a local partner to establish a joint venture rather than simply acquiring a company in another country. Support your rationale, based not only on ethical considerations, but also on other external factors that you have learned throughout this course.
PART 2:
Case study:
A leading-edge U.S. computer firm announced from the headquarters in the United States that a new product would be available to its Japanese customers in October 1988. This official announcement was communicated through the corporate communication channel to the management at its Japanese subsidiary. This availability date was later postponed by 4 months and then postponed again several times. All the subsequent delays were communicated officially to the management at its Japanese subsidiary once any of the subsequent unexpected supply chain management disruptions were uncovered by the US headquarters. The employees at the Japanese subsidiary were furious about this chain of events and humiliated at having to inform their customers about these delays. Later, a key sales manger was so ashamed of his company’s behavior that he left the company. (Carroll & Gannon, 1997, p. 117)
1. Assume that you are a member of the strategic planning committee that intends to design the ethical standards for the international human resource management of your company.
2. Interpret what you think have caused the reactions of the Japanese sales manager as mentioned in the Case Study. How are the personal ethics and corporate ethics interpreted differently (a) in the USA, and (b) in Japan?