External Consultant

Introduction:

Overview of the case:

Sonya Meyerson, a business graduate with some experience in Consultation, thrived in her
dream job at Parker Petroleum, an oil company in Oklahoma, known for its entrepreneurial
talent. She wished to work for Bob Raymond, a senior vice president of a division and soon to
be the CEO, who is sharp and friendly and always spots opportunity. After the training period,
she started to work under her direct supervisor, Jack Stanek. Though he was a maverick and
demanding much of subordinates, she respected him because he was a high achiever and
always acknowledged and rewarded commitment and hard work. She was soon promoted to
Manager because of her role as a financial analyst with keen business insights, resourcefulness,
and great potential. A year later, Stanek along with Sonya was transferred to Jumandia, a
developing country, to oversee the planning and construction of a refinery there. Sonya was
overwhelmed with joy for her first oversees assignment. She settled in alright, thanks to her
friend Zalika, who pulled some strings unbeknownst to her. She discovered that for next year’s
budget, the legal item number went from $1250 to $5 million. When she discussed this issue
with Stanek, he dismissed it as a consulting fee for effective and quick results. After an external
investigation, she noticed that Parker is the only company paying large amount, cutting through
country’s red tape. She sought advice from Bridget Scona, VP of Investor Relations, to gather all
information covertly, so she can share with other members of ethical committee and to hire a
lawyer. Sonya found herself in a predicament whether to report such unethical and slightly
illegal practice after her confrontation with Stanek when he intimidated her not to screw it up
and later advised to repatriate her to headquarters saying that she is not ready for international
assignments.

Therefore, this proposal gives some recommendations of how expats should deal with
unethical and corrupt practices in a similar company, RP Petroleum, in India and analyze them
with relevant theories

Recommendation:
The following recommendations are given to the Manager

1) Free and Open Communication: Human Resource and Senior Managers should
encourage open communication when the employees witness any white collar crime in
the company without feeling apprehensive. They should conduct polls and surveys and
ask for regular feedbacks and anonymous reporting structures
 2) Leadership: An effective leader should bridge gap between employer – subordinate
power distance. He should communicate with the three pillars- employees, customers
and shareholders. He should be more flexible with time
3) Laws: Consult your colleagues or any amiable top level executives for violation of laws in
both home country and host country and company’s code of ethics before whistle
blowing
4) Ethical Compliance: Companies that are looking to shape ethical behavior must be
guided by three principals: (a) respect for core human values, which determine the
absolute moral threshold for all business activities; (b) respect for local traditions; and
(c) belief that context matters when deciding what is right and what is wrong
5) Integrity capital: In the article titled “Greased Palms and Giant Headaches” published in
Harvard Business Review, the author states that although company has tools such as
training, policies and controls, Integrity capital should be embedded in the corporate
culture. It helps shape employee behavior.
6) Cultural assimilator and Sensitivity training: By providing this training to expats, they
could handle any discomfort situation they are likely to encounter and understand their
own values and culture and be more sensitive of cultural differences
7) Insufficient Wages: Unethical practices take many forms such as bribery, tax evasion,
embezzlement etc. The degree of corruption maybe small and borderline illegal. People
are more prone to bribery because of the insufficient wages
8) Sustainability: For long term relationships with host countries, issues of sustainability
need to be addressed. Leadership commitment and corporate social responsibilities are
essential strategies that will benefit the company in the long run.

Analysis:
According to Geert Hofstede, who developed a framework on organizational behavior in
different cultures, suggested that people in most developing countries fall under the dimension
of High Power distance unlike those in developed Western individualist countries such as US,
UK etc. Employees are reluctant to express their disagreements with Managers. They won’t
report on the issue of misconduct for the fear of retaliation. Hence an anonymous polling and
surveys should be implemented.

Social responsibility and ethical behavior of firms has become more complicated because of the
additional stakeholders in firms activities and legal and regulatory requirements and
expectations prevailing where the company is operating. Headquarters give them the right to
make decisions at the subsidiary and they have profit maximization as their primary target and
operate within the confines of law and try to find some legal requirements which are less
restrictive or not imposed at all. Hence an international code of conduct should be enforced.
Maslow’s hierarchy of needs: The upper levels of pyramid self actualization and self esteem
were called into question

Business Benefits from CSR:

 Improved access to capital

 Secured license to operate
 Revenue increases
 Cost decreases
 Risk reduction
 Increase in brand value
 Improved customer attraction and retention
 Improved reputation
 Improved employment recruitment

For example: Ratan Tata, chairman of tata Group in India upheld a value system of trust and
integrity. It is well known for its csr. He developed his business on principles such as “Tata
wont bribe” and Tata wont indulge in politics. There have many delayed projects and lost
projects due to their anti corruption tradition. Today, it’s a large successful conglomerate
providing job opportunities for more than million people.

When companies go Competition in emerging markets: Wh

In

CRS: Ethnocentric approach