Assignment-3 “NES China: Business Ethics”

Group Members Name ID

Md. Hossain Ahmed 1835274090
Meherun Nesa 1735297090

Course Name: Principles of Marketing and Management

Professor’s Name: Professor Md. Mizanur Rahman

Submission Date: 15.03.2019

1. Problem statement (What is the case about?)
This case is about the ethical problem faced by a German multinational company NES AG while they
were trying to establish a holding company in Beijing to coordinate its investment in China. Company
faced difficulty and complexity because of the huge cultural differences between China and Germany’s
business environment.

2. Cultural Issue of this Case:

The case brings about the conflict between Western and Chinese business practices and protocols. For the
Chinese, Glenn gifts shows a sign of interchange between the two parties. It will be almost Impossible for
someone to build a strong relationship with the Chinese officials without understanding the basics of how
they do business. As Chin suggested creating a separate business code of conduct especially for the China
region.

3. Case problems relating to designing the campaign:

 Before building any marketing campaign, companies need to have a solid marketing foundation
which leads to stablish strategic messaging and positioning. We do not see any effort by the NES
China in this aspect.
 NES China could co-ordinate many important functions for its marketing campaign in relating
with the NES company profile and goods name of NES.
 In the initial campaign Company could coordinate many important functions for its enterprises
and managing government relations.

 4. Corporate culture of NES China.

 NES emphasized CSR and focused on long term mutual benefit.
 Implement the code of conduct of NES
 NES China trained over 2000 Chinese engineers, master craftsmen, technicians as well as skilled
workers.
 Scholarship program for young Chinese academics in Germany.
 Arranged extensive training programs in China.
 Fair business partner.

5. Business environment in China

 Business establishment cost is high in China.
 Absence of transparent legal framework
 Presence of Guanxi (interpersonal connection based on mutual interest and benefit)
  Bribery and exchange of gifts for both illegal and legal actions.
 Ethically practiced to use gifts for manipulating administrative process.

6. Possible alternative solutions to overcome the problem.

Company should Try to adopt the Chinese business culture. Furthermore, as companies head office
situated in Germany therefore giving gift to the high official in China would not affect much to its
business ethics. In China it is believed that, as long as those gifts are not given for securing illegitimate
benefits, they are not considered illegal.

 Pros
Such cooperation may lead mutually benefitable for both parties.

 Cons
This will may hamper the ethical business practice in NES China as the mother company thinking about
the ethical business practice.

7. Pick up the best solution(s). You must give justification favoring your choice.

The best possible solution here is adopting Chinese business culture. NES AG should not make business
decisions based on Western values because China has their own set of unique business norms and cultural
values. Being culturally different is not necessarily means being unethical. Gifts are supposed to build
relationships by benefitting for both parties. It helps to complete the bureaucratic process faster. NES AG
should follow the host country standard.

8.Design implementation plan (Specify the timeframe and specific course of actions)

 Coordinate many important functions for its enterprises and managing government relations.
 Writing the ethical practice manual especially doing business in international area.
 Provide training on cross cultural dilemmas on ethics as part of the companies’ policy.
 To implement a new established code of conducts for the NES China.