The CEO of a company based in the USA with subsidiaries in the United Kingdom is contemplating moving some of its operations to China but has read about the GSK bribery scandal in China. The CEO understands that the climate for foreign companies operating in China is not as welcoming as it used to be. The CEO is now asking his manager for international business to assess the GSK case, analyze the issues it presents. In particular the CEO wants to know what lessons his company can learn and how the company can reduce its risks when operating in China. The CEO handed his manager this list of questions
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.
Assess GSK's response so far. Are the initiatives that GSK has implemented to address the bribery problems sufficient or would you suggest further actions? If you were Mark Reilly what would you have done? Explain.
Do you think that GSK has been treated unfairly? Was GSK really at fault or was it just unfortunate to have gotten caught given the perception that companies have to resort to bribing to win contracts? Explain.
How can we avoid similar situations and how can we reconcile local expectations of questionable payments with the U. S. Foreign Corrupt Practices Act or the U.K. Bribery Act? What do you recommend? Explain your position.
What strategic and operational lessons can we take from your analysis?