Project 3: Leading Ethically and Legally at Home and Abroad

Global Shippers, Inc.

Notice: Contains Confidential Information

One of Colossal Corporation's import-export companies, Global Shippers, Inc., a New

York–based company with facilities in over 37 countries including the United Kingdom,

recently submitted a bid for an exclusive contract with the government of the small

country Neristan. The contract would provide Global Shippers with the exclusive right to

export goods from Neristan's government-owned factories to the United States for

distribution and sale. It is projected that this contract would provide over $20 million in

revenue to Global Shippers per year, increase its stock value, and allow the company to

expand its international operations and employee base.

Shortly after Global Shippers submitted the bid, Neristan's prime minister invited the CEO

of Global Shippers, Robert Manning, to dine with him at the most luxurious restaurant in

Neristan.

After Roger arrived to the dinner, the prime minister ordered the most expensive bottle of

wine on the menu, and as they drank, he made a proposal to Manning. The prime minister

said, "Here in Neristan we value relationships above all else, and we have a great

opportunity to help each other." He went on to say that he was recently tasked with

"selecting the best company for Neristan's contract," and he thought that "Global Shippers

has what it takes."

Course Resource

Manning was excited by the prime minister's comments. He agreed, "There is the potential

here for a great relationship." Manning gratefully accepted the prime minister's offer of

another glass of wine and listened intently. The prime minister then went on to say, "It is

customary in Neristan for business associates to help each other prosper, and if you

ensure a payment of $100,000 is wired to my personal account in the next week, I will

make sure that Global Shippers gets the contract."

Manning, who had dealt with similar requests from other foreign diplomats in the past,

responded, "I'm afraid that such payments are prohibited in my country, but why don't I

fly you to New York tomorrow so we can discuss business further?" Manning went on to

say, "The trip will be all expenses paid, and you will stay in the penthouse at the finest

New York hotel. If, after we are done conducting business, you want to see the sites, I can

show you around the city, and you can stay on us for a while."

The prime minister gratefully accepted Manning's offer, and Manning paid the $3,500 bill

for the dinner and wine on his corporate account. The next day the two flew first-class

back to New York. After conducting business in New York for a day, the prime minister and

Manning traveled around the city, went to the theatre on Broadway, and dined in the

finest restaurants. Everything was paid for by Manning's corporate accounts. After several

luxurious days in New York, the two of them then flew first-class to Los Angeles, where,

after several days of "living it up on the town," they met with Global Shippers Inc.'s board

of directors, and the prime minister announced that Global Shippers had been awarded

the contract. The prime minister stayed in Los Angeles, all expenses paid, for two weeks

after this meeting, and then flew back to Neristan.

In the meantime, upon the announcement of the contract acquisition, Global Shippers

Inc.'s stock skyrocketed, and the company began hiring more warehouse employees in

Neristan and the United States to manage its new lucrative contract. Manning received a

substantial bonus from Global Shippers Inc.'s board of directors for his excellent work

related to acquiring the Neristan contract.

Six months later, the first shipment of goods was ready to leave Neristan and go to the

United States, but the customs officials on the Neristan border refused to allow the goods

to leave the dock. The customs officials stated that they needed time to inspect the goods

for illegal contraband and that it could be weeks before they were cleared for shipment.

Manning, who was visiting the prime minister at the time, was called to the customs office

by his head warehouse employee. Manning slipped the customs officials $100 each and

asked if they could expedite the shipment. The goods were cleared the next day, and the

first shipment left for the United States.

A few weeks later the prime minister of Neristan was arrested by Neristan authorities for

embezzling government funds. Manning began to worry that some of his actions may have

crossed the lines into illegal or unethical activity and (given his close relationship with the

prime minister) that he may soon also become the subject of investigation. He called the

vice president at Colossal Corporation, told him the whole story, and asked him if he could

help defend the legality and ethics of his actions.

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