Consider the ethical dilemmas in the following situation and decide what you would do.

You are the VP for global sales of a telecommunications equipment company. The accounting manager of your company recently brought to your attention an unusual charge of a 3 percent commission to a purchasing manager in Russia with whom your company had recently started doing business. One state-owned manufacturing company in Russia (we will call the company "R") submitted a bid for a large order of your equipment. You remember being surprised to get the contract with "R" because your company had never been able to do business with it since it started there many years ago. As it turned out, your new sales manager for the region had a relative in "R" who promised to supply him with all of your competitors' bids if he paid him a 3 percent commission on all of the sale to his company. The area manager accepted this arrangement. He got the competing bids and secured the deal with your company.

What would you do, given the following" (1) If you refuse to accept the business without any legitimate reasons (presently, there are none), your company will be blacklisted in that country - which amounts to about 20% of gross yearly profit. (2) If you accept the business and do not pay the 3% commission, the purchasing manager will make much trouble when he receives your shipment. No doubt he will not release the 5% bank guarantee letter about the quality and quantity of the material. (3) If you accept the business and pay the 3% commission, you feel that it would malign your company's reputation and your beliefs.

You have three ethical problems here: First, your company has won a rigged bid. Second, you must pay the person who rigged it or he will make life miserable for you. Third, you have to decide what to do with the area manager who accepted this arrangement.

QUESTION:

What would be the plan of action for this situation that addresses the choice picked and the plan of action about the area manager?