Question

This assignment asks you to research two recent examples of corruption by multi-national corporations. The two cases involve:

Walmart in Mexico
Glaxo-Kline in China

For each of these scandals please answer the following questions:

Walmart in Mexico
1. When and where did the incident take place? Please provide a thorough background statement here.
2. To whom were bribes allegedly paid? By whom?
3. What was the objective of the alleged bribes?
4. What was the outcome as a result of the bribery? In other words, how did Walmart benefit from this?
5. What action, if any, has United States government taken against Walmart?
6. Have these allegations had any impact on Walmart's sales or profitability from what you can determine?
7. Within the last month, the company has apparently responded to these charges. What has it been doing?
8. In your opinion, were Walmart's actions legitimate business practices, or do you think it was an example of ethical failure on their part?

Glaxo-Kline in China
1. When and where did the incident take place? Please provide a thorough background statement here.
2. To whom were bribes allegedly paid? By whom?
3. What was the objective of the alleged bribes?
4. What was the outcome as a result of the bribery? In other words, how did Glaxo benefit from this?
5. What action, if any, has Chinese government taken against Glaxo? What is unusual about their actions?
6. Have these allegations had any impact on Glaxo sales or profitability from what you can determine?
7. Within the last month, the company has apparently responded to these charges. What has it been doing?
8. In your opinion, were Glaxo's actions legitimate business practices, or do you think it was an example of ethical failure on their part?

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Walmart in Mexico
1. When and where did the incident take place? Please provide a thorough background statement here.
In 2003, Walmart began construction to open a new store in 2003 in an alfalfa field in San Juan Teotihuacán, Mexico. This alfalfa field was not zoned for construction nor for retail stores primarily because it was nearby an important archeological site of the ancient Teotihuacán pyramid. Through bribery however, Walmart had the area rezoned so that despite massive protests by locals, Walmart was able to open the doors to its new store in 2004. A later investigation turned up 19 additional sites throughout Mexico where similar events had happened.
The bribes in Teotihuacán were paid by Walmart de Mexico employees and contractors to the town mayor and to other local Mexican officials, and local officials were bribed in other locations throughout Mexico as well. In Teotihuacán, the main objective of the bribes were to rezone the alfalfa field to allow construction. In other locations, bribes were also made for rezoning to allow for construction or new traffic patterns and sometimes to ignore laws concerning water use and other environmental concerns. As a result of the bribery, Walmart was able to place its stores in strategic locations throughout Mexico. These locations allowed them to benefit from increased consumer traffic throughout the stores and to profit from increased sales.
Once the bribery schemes were revealed, Walmart came under scrutiny for violating the United States Foreign Corrupt Practices Act (FCPA). Their reputation suffered as well and its stock price dropped when the news was printed in the New York Times. In addition to facing fines and increased compliance costs associated with the FCPA, Walmart may also be sued for defrauding its shareholders by concealing its suspected corruption. ...

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