Name: Niaz Ali

I.D: 16221003
Date: 20/04/2016

CASE ANALYSIS "Lenhage AG: Ethical Dilemma"

1. Executive Summary
It was the end of April 2012 when Ringo Weinhardt settled into his office chair with many
thoughts. Lenhage AG is European manufacturer and seller of tools fasteners for the
construction industry. Ringo Weinhardt is president and general manager in Seoul.. The
general manager at the Seoul location of a European manufacturing company faces an ethical
dilemma involving bribery and facilitation payments. A key decision maker in a local
construction companys purchasing department has asked for a facilitation payment as a
necessary condition for securing an order. If the expatriate manager decides to pay the money,
he will secure an order that will lift his company to a new level of success for years to come.
If he decides not to pay, the order and all the company has worked for over the last year will
be lost. South Korea construction market was booming. Chun-Ha Construction would be the
main contractor for all of these projects. South Korea is planning to build 8 new nuclear
power generation plants in sparsely populated southeast coast of the country Coastal area was
seismically active. Recent natural disasters are fresh in peoples mind So high quality
products needed Weinhardt and his management team developed plan a year ago to become
key supplier of safety anchors for these plants Failure of anchors and fasteners could be
terrible, value of anchors is tens of millions of dollars. Weinhardt determined it. He knew he
had better products, better documentations, and better people than his competitors. He felt
business was rightfully his.
The manager must decide whether or not the payment would violate laws internationally,
locally and in his home country.

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Name: Niaz Ali

I.D: 16221003
Date: 20/04/2016

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2. Statement of the Problem

Ringo Weinhardt was facing difficulty in the ethical decision making for the facilitation
payment for the contract & for the betterment of the company & also for his own integrity.

3. Causes of the Problem

Double standard of ethics in South Korea for a domestic or individual company to

make facilitation payment for the contracts.

Local Accounting standard establishing a sales expense account for any unethical

purpose.
Competing dealers also met the minimum standard for the project.
Personal relationships & lavish payments in local business is the formula for success.
Company was also not in the way of success for a long time they wanted this contract

for future financial consistency of the company.

4. Decision Criteria:
He must check the relevant facts and perform the necessary research into accounting
Standards, applicable laws and regulations, and any policies and procedures within the
Company that will support him in alleviating his concerns. In particular, he should consider
whether the anti-bribery policies and procedures of the company and country (Foreign
Corrupt Practices Act 1977) can help Weinhardt.

Decision

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Name: Niaz Ali

I.D: 16221003
Date: 20/04/2016

"Professional behaviour & integrity should be considered by not taking the contract which
will benefit the company for the long term repute of the company for which it is well known"

5. Recommendations, Implementation & Justification

Ethical decisions must be made with perfect information.
When making decision think about and identify all stakeholders in any given ethics
situation.
He should be ready for both of the consequences negative & positive not only for the
stakeholders but also for the company repute.
Discussing the maters with all the stakeholders & involving all of them in the
decision making process.
If Weinhardt have suspicions or evidence of criminal activity (which, in this case, could
include the alleged bribe), he might be obliged to report it to one or more authorities. In this
respect, he should seek advice from his professional body, and also consider taking
independent legal advice. He should document, in detail, the steps that he will take in
resolving his dilemma, in case your ethical judgement is challenged in the future.

6. External Sourcing
http://biggsuccess.com/bigg-articles/3-steps-to-solve-an-ethical-dilemma/
http://www.mheducation.co.uk/he/chapters/0077099451.pdf
http://smallbusiness.chron.com/resolve-ethical-dilemmas-workplace-11008.html
https://www.justice.gov/criminal-fraud/foreign-corrupt-practices-act

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