Jextra is an international company with a strong reputation for providing quality product.

Jextra operate retail business in Asian countries like Hong Kong, China, Philippines, Viet
Nam, Malaysia, ets. Jextra is owned by a large publicly traded industrial group known as Sim
Lim Holdings which operated supermarket, hypermarket and convenience store.
Jextra entered in Malaysia in 2005, and was very successful and in Malaysia it operates
supermarket stores using the name Neighborhood Markets and also planning to enter in
Malaysian convenience store in a few years.
Tom Chong, a Hong Kong native, had been the country manager of Jextra for the
Neighborhood Markets Division in Malaysia. Prior to moving to Malaysia, Chong held in
various positions in corporate headquarters in Hong Kong then transferred to Malaysia as
finance director and after two years he was promoted as the country manager. Recently,
Chong have faced several issues one regarding the expansion of Jextra in Kalong and another
involved with the job performance of Arif Alam, Jextra top performing buyer, who was
rumored for accepting money and gifts from suppliers.
First of all, Jextra was doing well in Malaysia and actively seeking to expand. Chong and his
team identified a potential site in Klang for a new Neighborhood Market. However, the
selected site was not zoned for retail and commercial purposes, so he meets with the mayor of
Klang. But, Chong was surprised when he found that the mayor will zone the selected site for
commercial use and help all other requirement to establish the store in there if Jextra provide
fund to build a new primary school and also pay for flyover construction.
Chong was surprised with the mayor proposal and was in dilemma that what will be the
amount, when it has to be paid, if he say no to the mayors proposal than what will happen.
Furthermore, the code of conduct of Jextra also does not support the payment of bribery.
Chong also found that such payment may be illegal in Hong Kong but a normal practice in
Malaysia. If the school payment speed up the development then it could be legal but if the
payment goes directly to the school board budget then would that be legal? Clang is confused
about it and there is risk if Clang does not accept the offer of the mayor then the competitors
can take his place.
Secondly, in Jextra, the category managers (CMs) are responsible for working with suppliers,
determine the products to order and negotiate the price and all others relate to the purchase.
The retail industry was notorious for buyers accepting money and gifts from suppliers. Arif
Alam, Jextra top performing CM, a buyer of fresh fruit and vegetables who is responsible for
managing contract with suppliers, listing suppliers and products and negotiating price. As
Alams boss, Chong believed Alam as he continuously negotiated better contracts then
Jextras other buyers and also better than Jextras competitors. But Chong does not know the
detail buying process though from his experience that there are ample of opportunities for
CMs to exploit the system for personal gain.
Besides, Chong suspects that Alam was accepting gifts or even taking bribes and also heard
the rumors a scheme between Alam and his father in law. Alam refers products that the
agency of his father in law supplies.
Chong is in a dilemma that although he suspected that Alam was involved in the dirty buying
practice but how could he find out? On the other hand, Chong needed to keep growing the
business and meet the financial target, without clear evidence, clam against Alam could
hamper achievement of the goal of the business. So Chong decided to deal with mayors
proposal firs and wait before doing anything about Alam.

Question: 1

What are the ethical issues Tom Chong confronts in this case?

Answer:
In this case Tom Chong basically faced two major ethical issues. Firstly, one
issue involved a conversation with the mayor of Klang, a town near Malaysias capital Kuala
Lumpur. Chong had been seeking to expand to Klang for some time. The mayor surprised
Chong with an offer to help with zoning if Jextra would help finance a new primary school.
Secondly, another issue involved the job performance of Arif Alam, Jextras top performing
buyer. Alam, a buyer of fresh fruit and vegetables, consistently negotiated better contracts
then Jextras fifteen other buyers and Chong believed, better than Jextras competitors.
Nevertheless, the retail industry in Malaysia was notorious for buyers accepting money and
gifts from suppliers. Chong have heard a conversation about Alam that he is accepting gifts or
even take bribes.

Question: 2

Identify primary stakeholders for both the issues?

Answer:
In the first issue with the mayor of Klang, the primary stakeholders are the
mayor and his sister. The sister of the mayor was on the board of the primary school in which
Chong was requested to provide fund. These funds will the mayors sister to develop the
school and get benefits from it. Secondly, the mayor can use the issue in his election
campaign as the development of the society done by his.
On the other hand, in the second issue, Arif Alam will be only beneficiary, who seemed to
take gifts and bribe from suppliers against the buy order.

Question: 3

What are the possible alternatives Tom Chong could chalk out? (Discus from
utilitarian perspective, right perspective and justice perspective)

Answer:

Question: 4

What are the practical constrains in resolving the issues?

Answer:
In the first issue, the constrains were, how would Chong get the money for the
school? Would he identify it in the investment proposal, or try to hide it with other items?
Should he get legal advice on his possible criminal liability in Hong Kong? What if he went
ahead with the payment and the money ended up not going to the school? If the press found
out, Jextra and Chong could be in big trouble.
In the other issue, although Chong suspected that Alam was involved in dirty buying, how
could he find out? What if he set up an investigation? If he found nothing, he could alienate
his people and lose personal credibility. If he found that large parts of his category
management were involved with similar activities, than the whole business might be at risk if
he were to shut it down. He could lose his top CMs and disrupts suppliers relationship.
Proving any of his suspects would be difficult. Alam was a respected member of the team.
Aside from rumors and hearsay, Chong had no real evidence of bribery or kickbacks.

Question: 5

How should Tom Chong resolve the issue?

Answer:

Question: 6
Answer:

Does the Jextra Business code of conduct help Chong resolve the issues?