Required: Whata are some issues involved and relevent stakeholders? Foreign Paym

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Required:

Whata are some issues involved and relevent stakeholders?

Foreign Payments- Vignette 9 To: BPG Management Team From: J. P. Jordan, Chair, Board of Directors Subject: Foreign Payments Our firm has just received a large order, representing as much as a 35 percent increase in our sales, from Lumar, a medium-sized state-owned firm in Africa. The order would be filled over the next four quarters with a potential of orders continuing nitely. One of the unwritten specifications of the order is that we increase our price by 10 percent. We would then forward the Lumar as a finder's fee. Finder's fees such as this are common practice in the country with very little chance of discovery. The government has more pressing problems on which to concentrate. 10 percent premium to the sales manager of This offer looks very attractive due to its volume and future potential. However, I ha some concern with the payment of the finder's fee. Please meet me tom to discuss this opportunity. I would like your views on the following orrow at 8 a.m. 1. The profit potential of the offer. 2. Our capability to supply the additional volume. 3. The legal issues involved in paying the finder's fee. 4. The moral issues involved in paying the finder's fee. 5. The ethical issues involved in becoming economically entwined with this nation. Would your views be different if this country still practiced apartheid? 6. Your recommendation as to whether to accept the offer.

Explanation / Answer

In the memo, the biggest issue which is related o the situation is closely associated with the morality and ethics which has to be compromised. As in the memo, it is stated that the company has to increase the total prices by 10% and it will be passed to the sales manager of Lumar as a finder’s fee. This is a kind of bribe which will be given to the sales manager.

We know that while conducting the business operations and transaction, the organizations must be upheld the basic moral and ethical values and these values should not be compromised in order to gain some commercial profits.

This ethical dilemma is also created due to the fact that the company will be having a continuous order for a fairly long period and it will help the firm to improve the sales by 35% which is a major jump.

Thus the management has to deal with the issue of compromising on ethical and moral grounds for gaining the increase in sales.

The different stakeholders are as below:-

The company BPG itself as it has received the sales proposal and if it wins the sales contract, the company will experience a hike of 35% in sales.

The Sales manager of Lumar as he is the person who will get 10% of total price of the product sold as a finder’s fee.

The government of that country as the payment will be made by the government and if the prices are negotiated well then it can be quite fruitful for the government.

The common public of State of Africa as they paid taxes to the government and if there will be a hike of 10% of product bought by the government’s agencies, it will reduce the funds which could have been spent on the welfare of the common people of that country

Society will be affected negatively as the chances of bribe will create the issue of corruption and moral degradation.

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