Kitchen Best

In order to succeed in business, managers have to overcome numerous challenges, especially when conducting cross-border business. International management challenges stem from cultural, political, legal/regulatory, and economic differences. Managers have to be aware of these differences and apply appropriate strategies to address these challenges. Cultural identity is very important: while some countries do share common values, cultural differences need to be taken into account when doing business internationally. The political and economic situation within a country shapes the business climate and must also be considered when conducting business in foreign countries.

The Hong Kong based company, Kitchen Best, has a history of offering kickbacks to potential clients and business partners, especially in China. While there are cultural similarities between Hong Kong and China in terms of the collectivist and prideful nature of society and strong family orientation, political and regulatory aspects in the countries vary significantly. Hong Kong has a very open, capitalistic economy with high ranks in ease of doing business, while China’s economic openness and political freedom is somewhat limited. In China (and Macao), it is illegal to accept or give bribes.

Even though Kitchen Best is based in Hong Kong where bribery is legal (with the permission of one’s supervisor), its employees, at the very least, need to obey the laws and regulations in the country in which they are operating. However, having different policies for each country could present risks. Managers used to conducting business in a certain way (i.e. giving bribes) may be less inclined to change their tactics in a country where bribery is illegal if they are accustomed to doing business a certain way.

Kitchen Best also has internal shortcomings which exacerbate the ethical issues raised in the case. After Henry Dong-hwa successfully established the Foshan factory, he took a passive management...