Situation from International Microcircuits, Inc. (Meredith & Mantel, 7^th ed.

Megan Bedding, vice-president of sales for International Microcircuits, Inc. (IM), was delighted when IM was one of the few firms invited to enter a bid to supply a large industrial customer with their major product in a small foreign country. However, her top salesperson for that region had just called and informed her of certain "expectations" of doing business in the country:

1. Local materials representing at least 50% of the product's value must be purchased in reciprocity.

2. The local politicians will expect continual significant donations to their party.

3. Industrial customers in the country normally receive a 40% "rebate" (kickback) when they purchase goods from suppliers such as IM. (IM's profit margin is only 20%.)

With this new information, Megan was unsure about changing or proceeding with the bid. If it was withdrawn, a lot of effort would be wasted as well as a chance to get a foothold in the international market. But if she proceeded, how could these expectations be met in a legal and ethical way?

Consider the issues and devise a solution, if there is one, that addresses Megan's concerns.