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Corporate Greed

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Customer Strategy Solutions (CSS), a California based developer of order-fulfillment systems, is confronted with a shakedown (Bodrock, 2005).
Shortly following the company’s CEO, Pavlo Zhuk, setting up a software development center in Kiev, local officials said that CSS had not filed 5 of the 17 tax schedules as required. Furthermore, Ukrainian tax officials claim that the company owes the government tax arrears of 86, 954 “hryvnia” (Bodrock, 2005). That is close to $16,000 in U.S. dollars, by the way.

Given that he and his associates had done everything accordingly, Zhuk was stunned by the accusation. Bear in mind, this isn't the first time the CEO has encountered trouble in Ukraine. For instance, in the process of getting his software center equipped, a state-owned telecommunications utility had made it difficult for Zhuk to get the phone lines CSS needed (Bodrock, 2005).
The senior business manager, for example, had told Zhuk it would take 3 years to install the lines in his office. Although for a “certain” price, he had added, the lines could be operational in two weeks (Bodrock, 2005). Even as the picture of widespread bribery in Ukraine became obvious, Zhuk still did not want to disengage (Bodrock, 2005).

Being of Ukrainian descent, it was his desire to help modernize the country. Such as, he paid his programmers a higher salary than that of any local company of similarity (Bodrock, 2005). He hoped to improve their living standards, by means of, affording three meals a day without having to bargain or wait in line for hand-outs. And yet, he wasn't sure he could continue to compromise his principles for the sake of the greater good (Bodrock, 2005). Should Customer Strategy Solutions payoff the Ukrainian tax officials?

That is tough to answer. On one hand, I know that Zhuk, a patriot, will pay-off the tax officials and continue with his pet project. Why? Zhuk signaled that he would pay local bureaucrats whatever was necessary to do business in Kiev, for example. However, on the other hand, I do not know what he should do. Because that is a moral issue, and I don’t know from the case study what Zhuk’s morality dictates.

At present, regrettably, bribery is common in many parts of the world (Bodrock, 2005). Managers realize that if they don't get the preferential treatment their rival is buying, they are going to have to leave the country. Fair enough. In an economic sense, their choices are identical to those that Zhuk faced (Bodrock, 2005).

In closing, personally speaking, an understanding of the local business culture and appropriate policies for addressing these unethical practices are basic tools for succeeding in unfamiliar settings. More importantly, these regulations prevent businesspeople and political bureaucrats from enriching themselves.

.
References
Bodrock, P. (2005). The Shakedown. Harvard Business Review, 83(3), 31-35. http://eds.a.ebscohost.com.proxy.itt-tech.edu/eds/pdfviewer/pdfviewer?sid=d5e4dad8-8577-495f-88ae-d0012cb57e4c%40sessionmgr4005&vid=5&hid=4108

Thiroux, J. P., & Krasemann, K. W. (2012). Ethics Theory and Practice, 11th Ed. Upper Saddle River, NJ: Pearson Publishing.

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