Airbus' previous management has been caught in ethical lapses which included

bribes and kicks backs in order to get aircraft orders from Kuwait and, an inflated
number of orders which may have caused the demise of Sabena.

Q 1) In each of the cases who benefits and who suffers from the alleged ethical and
legal lapses of Airbus?

In the alleged kickback scheme where Sabena's order of planes which it did not need
was doubled the loser was Sabena a move which helped trigger the airline's collapse
four years later p It is almost always assumed as the case study indicates that politics
plays apart in the ordering of aircraft from manufacturers

Lobbying for Airbus may be considered friendlier in the European nations which are
part of the Airbus consortium. and that it may well think of losing out to Airbus as a
sort of "insult" to America. Eventually, losers will also include the officials who were
influenced, probably bribed or offered kickbacks for Airbus orders.Thus

 Only 1 case led to conviction

 Airbus Benefited in India and Canada but suffered in Kuwait and Syria
 Boeing suffered in each case except Syrian scandal.

Q2) How should the public relations staff at Airbus respond to the articles appearing
in The Economist and The Guardian?

Both companies, of course, use lobbying and political influentials to help promote
the sale of their aircraft. Obviously, Airbus, when the Kuwaiti official "announced a
firm order for 15 Airbus aircraft worth $1`.1 billion and options for nine more, worth
up to #9 million" (In the alleged kickback scheme, where Sabena's order of A32
planes, which it did not need, was doubled, the loser was Sabena "a move which
helped trigger the airline's collapse four years later (Prove that Boeing's GE engines
are more effective and efficient than Rolls Royce's used by Airbus. Also, offer a
greater versatility in items such as seating, baggage and freight loads and cutting
down on turn-around time.

What the PR people need to do is to provide press releases, including comments

from the new management team which, in essence, explains that the legal and ethical
problems of the previous Airbus leadership have now been eliminated. How and
why?

Q3) What steps might Boeing take to defend itself from this sort of competition?
Not mentioned in the article may be the underlying anti-American bias by some
nations which gives Airbus a leg up on Boeing. Airbus, the articles need to point out,
now has clear and enforceable guidelines for the way in which solicitations for
business and eventual contractual agreements are made.

On the other hand what Boeing could do is In order to save on costs so that Boeing
can provide lower prices to its customers, Boeing can turn to outsourcing.
Outsourcings will Boeing to become more competitive. Furthermore, the option of
outsourcing also allows Boeing to share risks and focus on their relationship with
marketing and suppliers

Also Boeing could enter into JV with foreign govt.

Boeing could provide different set of value propositions like,

 Quality aspect
 Higher technology aspect
 Better passenger capacity.

Q4) Do you think Boeing and Airbus behave differently in marketing their aircraft
around the globe? Who gained?

2. One difference, of course, is that Boeing is a totally American firm, while Airbus is
represented by a number of European countries. Two immediate steps might be
suggested: First, the elimination of all "middlemen." Airbus sees these middlemen as
"a valuable asset built up over a period of years" (It is obvious that the kickback and
bribery schemes which resulted in the purchase of Airbus aircraft were approved, or
at least not opposed by Airbus' previous management. It is almost always assumed,
as the case study indicates, that politics plays apart in the ordering of aircraft from
manufacturers. A second defence is to improve the quality and performance of the
planes.

It would not be surprising to find that Boeing uses the very nature of being
considered as representing the U.S. No more seaside villas in Mexico or the
equivalent for anyone seeking to do business with Airbus Industries from now on
so, one can also state that the manipulation and schemes of Airbus also cost Boeing
an order from KAC, the Kuwaiti airline.

Boeing needs to say: when you deal with Boeing, you deal only with Boeing's
knowledgeable sales and technical experts.

To sum it up :

Boeing acted more responsible an dethical..

 Followed procedure and standards to increase or promote sales.

Airbus used bribery and Kickbacks…

 Kuwait airlines corporation

 Indian Airlines

Q5) Had France adopted the OECD convention on bribery ahead of these
transactions would the firm’s behaviour have differed? Why?

Given the debate and the complexity of this issue, one again might conclude that
generalization is difficult and the demand for speed money creates a genuine ethical
dilemma. Yes, corruption is bad, and yes, it may harm a country’s economic
development, but yes, there are also cases where side payments to government
officials can remove the bureaucratic barriers to investments that create jobs.
However, this pragmatic stance ignores the fact that corruption tends to corrupt both
the bribe giver and the bribe taker. Corruption feeds on itself, and once an
individual starts down the road of corruption, pulling back may be difficult if not
impossible. This argument strengthens the ethical case for never engaging in
corruption, no matter how compelling the benefits might seem.

While facilitating payments, or speed money, are excluded from both the Foreign
Corrupt Practices Act and the OECD convention on bribery, the ethical implications
of making such payments are unclear. In many countries, payoffs to government
officials in the form of speed money are a part of life. One can argue that not
investing because government officials demand speed money ignores the fact that
such investment can bring substantial benefits to the local populace in terms of
income and jobs. From a pragmatic standpoint, giving bribes, although a little evil,
might be the price that must be paid to do a greater good (assuming the investment
creates jobs where none existed and assuming the practice is not illegal). Several
economists advocate this reasoning, suggesting that in the context of pervasive and
cumbersome regulations in developing countries,
Corruption may improve efficiency and help growth! These economists theorize that
in a country where pre-existing political structures distort or limit the workings of
the market mechanism, corruption in the form of black-marketeering, smuggling,
and side payments to government bureaucrats to “speed up” approval for business
investments may enhance welfare. Arguments such as this persuaded the U.S.
Congress to exempt facilitating payments from the Foreign Corrupt Practices Act.