You are the CEO of a Canadian-Chinese joint venture that operates in China. Your

Question

You are the CEO of a Canadian-Chinese joint venture that operates in China. Your Chinese partner is the People’s Liberation Army (PLA). The PLA has built a sprawling network of businesses that do everything from raise pigs to run airlines and hospitals, mine coal, manage hotels, and operate paging and cellular networks. As a business conglomerate, the PLA does business with international investors. Some argue that a large portion of foreign investment going to China is with companies and cartels controlled by the Chinese military. Others argue that it’s easy to read too much into the PLA’s foray into business. They point out that there is little centralized coordination among the thousands of businesses with military affiliations. Some companies are run by retired officers, others by civilians. As the CEO of the joint organization, do you have any ethical concerns about partnering with the PLA? If so, what are they? Suppose a clash between pro-democracy demonstrators and the PLA turns bloody. How would this turn of events affect business relations with your PLA partner? Are the ethical issues of partnering with the Chinese military any different from those that arise from exporting to China? Why or why not?

Explanation / Answer

1. Chinese society is heavily influenced by the traditional values associated with Confucianism which promotes a strict system of norms and propriety. This determines how a person should act within a community, with hierarchy a central theme. In addition, there is little separation between business and private life in China. In the above case, PLA might abuse their authority of legal and regulatory framework which is unethical.

2. A disturbance in the economy due a clash between pro-democracy demonstrators and the PLA, would reduce customer and supplier base who are pro- democracy. Moreoever, an economy which is facing facing political disturbances focuses less on growth and investors are afraid to step into such markets. It will also reduce buyer's confidence

3. Ethical issues over partnering with chinese military are that they represent a minority segment of the country. They do not have a centralised system in place and thus lack of coordination may lead to conflicts. Also, there is lower trasperency of investments going in with chinese military

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