ASSIGNMENT 2

LENHAGE AG:
ETHICAL DILEMMA
Submitted To: Naeem Hayat
Rida Sanaullah

Lenhage Ag: Ethical Dilemma

Executive Summary
This case illustrates an ethical decision-making issue by presenting a realistic scenario that
countless expatriate managers have and will continue to find themselves in, particularly in
developing countries. The General Manager of a European manufacturing company, working in
South Korea at Seoul location, faces an ethical dilemma containing bribery payment to get the
contract which would be beneficial for the company as well as South Korean people as they
would get to use quality products. One of the crucial decision maker of a local company asked
GM of European manufacturing company to facilitate him with 1% bribe to secure the order. If
the European manager decides to pay the money, he will secure an order that will lift his
company to a new level of success for years to come and will benefit the company locally as well
as at international stage too as it would boost up their rank. If he decides not to pay, the order and
all the company has worked for over the last year will be lost and morale of his team would
really fall. The expatriate manager must decide whether or not the payment would violate laws
internationally, locally and in his home country. What are the real risks? Who can help him
answer the many questions he has regarding this local practice? And these questions were really
disturbing him as he had to finalize his decision within three days.

Statement of the Problem

The actual problem in this case is lack of ethics showed by the key decision maker (Chulsoo
Lee) which created this entire dilemma for the General Manager (Weinhardt) of the European
Company. It is a long term problem as if the GM facilitates Lee, he might start blackmailing him
for more money which will put Weinhardt career on stake. Moreover, this bribe giving thing
might become habitual which will cause in company's reputation that they always get contracts
through unethical means.

Causes of the Problem

The cause of this problem is unethicalness shown by Chulsoo Lee one of the key decision
makers of the company. But according to the case, this is not only his unethicalness, but use off
bribe and facilitating gifts were quite common in South Korea to gain big contracts. Their culture
supports such activities which ultimately leads them to corrupted nation in near future.

Alternative Solutions
To make decision about this problem, Weinhardt should seek help from governing accounting
boards; seek help of other Lenhage executives who might have undergone through same situation
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and same problem before. Moreover, to get himself clarified, Weinhardt should check proper
documentation on FCPA act which might drive him with a better solution or at least a way to get
rid of the condition with win-win situation.

Options evaluation

Pros 1:
- It might give him a better solution.
- He will have governing body on his side
Cons 1:
- Internal matter would leak out
- It will cost him time n fee
Pros 2:
- Will let the company know about his strong ethics
- Will have his own people on his side
Cons 2:
- Decision may be biased because of professional jealousy
Pros 3:
- Will clarify him rules n regulations under FCPA
- It might produce a win-win situation
Cons 3:
- This would be time taking

Decision criteria
I as GM would go for consulting my experienced management but would evaluate the risk factor
first that what would be the impact of this whole scenario and then consult my management so
that I could briefly explain them the situation.
Moreover, this situation is least time taking or costly and would help me in gaining my
managements trust.

Recommended solution:
I will consult my senior manager to avoid bribery and handle this matter ethically as bribery has
negative implications to growth.

External Sourcing
1. Giving In Or Giving Up
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https://www.scu.edu/ethics/focus-areas/more/engineering-ethics/engineering-ethicscases/giving-in-or-giving-up/
2. To Ship Or Not To Ship
https://www.scu.edu/ethics/focus-areas/more/engineering-ethics/engineering-ethicscases/to-ship-or-not-to-ship/
3. Copyright Concerns
https://www.scu.edu/ethics/focus-areas/more/engineering-ethics/engineering-ethicscases/copyright-concerns/
4. Raiding Customer Assets at MF Global
https://www.scu.edu/ethics/focus-areas/business-ethics/resources/raiding-customerassets-at-mf-global/
5. May The Truth Be With You
https://www.scu.edu/ethics/focus-areas/more/engineering-ethics/engineering-ethicscases/may-the-truth-be-with-you/

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