Most Western business visitors to Arab countries in the Middle East soon learn about the major value differences that separate societies in the Middle East from countries in Western Europe and North America. Particularly important in this respect are major value differences relating to sex roles as well as to unofficial payments for services rendered.

An international sales executive employed by a machine tool company in Europe came face to face with an ethical dilemma when he made a business trip to an Arab country in the Middle East. Payments to lubricate the decision-making machinery in the country were reputed to be common practice in the country. Nevertheless the sales executive was stunned when, after a short courtesy meeting with government officials, a junior minister approached him and asked for a $50,000 consulting fee. In return for the fee the minister promised special assistance in obtaining a lucrative contract for the European company.
Without his assistance, the minister added, the contract would definitely go to one of the company’s competitors.

1 How should the director respond to the minister’s offer?
2 Should international business people try to maintain high moral standards of business conduct in all countries at all times? Explain your reasoning.

In a diverse marketplace, sensitivity and a flexible response are essential tools for successful communication between a big company and its diverse customer base.

One reason is that different categories of customer have different needs and different preferences, and consequently they have to be communicated with in different ways. Some customers, for instance, may prefer to hear about the company’s plans at a public meeting. Others want to read about the changes in local newspapers, or to be informed by email. From a management perspective, good cross-cultural communication consists of identifying the varying needs and preferences of different cultural and ethnic groups and different age groups – then meeting those needs. However, Oliveira

(2013) claims, that was a lesson that a North American power company with a very diverse customer base had failed to learn.

For decades the company has used the same standard communication procedures with all categories of customer, including:

● Various minority ethnic groups.

● The disabled.

● The elderly.

In accordance with company policy, the company simply cuts off the power supply of any customer in any category who fails to pay his or her bill on time. Several notices are sent to the defaulting customer before any action is taken. However, once the action is taken the consequences can be serious.

For example, one winter an elderly customer suffering from dementia failed to pay her bill on time. In accordance with company policy, the customer’s power supply was cut off and, a few days later, the customer died from hypothermia. As soon as management learned what had happened, policies and procedures for cutting power supplies to domestic customers were suspended and revised. Too little too late! Although the company provided generous aid to the deceased customer’s ethnic minority family, showing generosity and understanding at this stage could not reverse the major reputational damage suffered by the company.
Following a national media outcry, the company received thousands of complaints calling the company’s management team ruthless and killers. Many small share-holders and a few larger investors sold the company’s shares. Employee morale collapsed. Now an emergency board meeting has been called to discuss a possible salvage operation.

1 What immediate actions should be taken to minimize the risk of a similar incident happening in the future? Explain how the actions should be implemented.
2 What actions should be taken by the board over the next 12 months to rebuild the company’s reputation?
3 Given the circumstances, should the company be held accountable for the death of the elderly customer? Explain why, or why not.