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IIM-K IB-E 2022-23 AB S19-20 Ethical Aspects
IIM-K IB-E 2022-23 AB S19-20 Ethical Aspects
IIM-K IB-E 2022-23 AB S19-20 Ethical Aspects
Passionate integrity
Demand for
Agent
Corruption
Transaction
Supply of
Agent
Corruption
Supplying
Organization
©2008-2022 P Rameshan
PGP 25 IB-E 2022-23 S19-20: Ethical
August 8, 2022 11
Aspects of International Business
Corruption Market
Bribe/Commission
Rate Demand for Illegal/
Unethical Services
Supply of Illegal/
Unethical Services
a
P1 c
0 V1 Ve V2 Volume/Total Value
Example of State of Social Tolerance: Story in The Hindu (2021): of Corruption
In West Bengal, in the past, villagers participated in the illegal commercial use of
government lands by CPM units, as the latter distributed profit-share to villagers as
well. However, villagers got upset with Trinamool Congress units, which replaced CPM
in those villages, as leaders of Trinamool were allegedly pocketing the entire profits
©2008-2022 P Rameshan
PGP 25 IB-E 2022-23 S19-20: Ethical
August 8, 2022 Aspects of International Business
12
Corruption Market
Bribe/Commission
Rate Demand for Illegal/
Unethical Services
Supply of Illegal/
Unethical Services
a
P1 c
0 V1 Ve V2 Volume/Total Value
of Corruption
Commit Report
Assess Monitor
Plan Act
(1) Is it legal?
(2) Is it consistent with the company policy, including its
Human Rights policy?
(3) Is it consistent with the core Chevron values?
(4) If it’s made public, would I be comfortable?
If yes, how?
If no, why?
©2016-2022 P Rameshan
PGP 25 IB-E 2022-23 S19-20: Ethical
August 8, 2022 20
Aspects of International Business
Ikea’s Rug Risk
If yes, why/how?
If no, why?
Ikea’s Philosophy
Brand Evolution
Customer Sensitivity
Social angle
Rug Outsourcing
Contract Provisions
Reported Violation
Organizational Risks
Violation of Ikea’s
supply contract Frustration
German
Documentary
If Guilty, Cancel Contract & Source Monitor & Mentor New Vendors to Avoid
from Better Vendors Future Violations; Communicate to Customers
Or, Try to Develop a Direct, Compliant If Not Possible, Exit Indian Rug Business;
Supply Channel Communicate to Customers
©2018-2022 P Rameshan
PGP 25 IB-E 2022-23 S21-22: Global
August 8, 2022 28
Strategies & Emerging Markets: India
Actual Decision
Ikea initially terminated the agreement with Rangan despite
Rangan’s strong claim of innocence (? Is it example of the
western inherent-bias that no easterners can be honest?!!!)