Question 1 & 4

OFF THE BOOKS PAYMENTS ased global firm, sent American Frank Quick to the ge for thi Prestige, a Middle East to scout out possibilities for increasing the market for a Prestige product. Two other global firms compete directly with Presti market, Companies Y and Z. siderable progress. He has made it quite clear to prospective buyers that Prestige offers a much better product than does the competition. Frank h been working especially hard to obtain a large order from the top officials of a large local company, Ajax, rather than having Ajax place their order with either Frank has spent a year in one Middle Eastern country and has made con- as Company Y or Z Ajsu presendy buys some products from Prestige and some from Companies Y and Z. While admitting that it regards Prestige's products as uniformly supe- rior, Ajax claims it chooses to spread its business among the three suppliers as a hedge against possible failure of supply. Nonetheless, Frank is persisting in his dogged efforts to make Prestige Ajax's sole supplier. informed him that adds, however oo hint broadly that he accepts substantial payments Ajax's vice president of purchasing invited Frank to his office and Ajax would be willing to gradually taper off business with tter product. He Compuies Y and Z. prinary because Prestige offers a better pro h, co , that under-the-table payments are rather common in two companies. Subtly, he indicates that if Prestige pays combined payments of Companies Y and Z, Pres supplier. However, if Prestige refuses, he wil his coun- payments from tige an amount equal to the Prestige's present contract at its existing level, while expan with Companies Y and Z, who, he claims, are prepared to ma payments than in the past