China Milk Scandal
Table of Content
Page
Introduction
2
Issues
3
Methodology
3
Finding
Responsible Party
4
Leadership Role
5
Image-Saving Tactics
7
Text Message Apology
7
Strategy to Prevent Corruption
8
Conclusion
Role of Institutional Environment In China
10
Regain Trust and Support
11
Effect on China’s Image
12
Western Perception Toward Asian Countries
12
Lesson Learn From Scandal
13
Bibliography
INTRODUCTION
The case discusses the tainted milk scandal that was unearthed in China in 2008. The milk scandal became public in August 2008, after it was disclosed that the baby formula produced by the Chinese dairy products company, Sanlu Group was contaminated with melamine, which caused kidney failure of many children, resulting in death in some cases. Later, the investigation by the government revealed that the products of 21 other Chinese dairy firms were also contaminated with melamine.
As soon the crisis became public, the Chinese Health Ministry ordered the dairy firms to recall the contaminated products and to destroy the unsold and recalled products. The Chinese Health Ministry started testing dairy products across the country.
Top executives of Sanlu were arrested. Government offficials who were found guilty were also sacked. China's dairy industry association announced that the affected children and their families would get compensation from the responsible dairy firms. To support the affected dairy farmers, the government also announced a subsidy.
New food safety draft laws, which set stricter food quality standards and demanded greater government responsibility, were reviewed on October 23, 2008. The case ends with a question on worthy of discussion as international businesses increasingly expand into emerging economies.
ISSUES
Action did by Sanlu by signing an advertising agreement on the condition that negative news related to the company was removed was an unethical reaction toward the crisis. They should serve the
Page
Introduction
2
Issues
3
Methodology
3
Finding
Responsible Party
4
Leadership Role
5
Image-Saving Tactics
7
Text Message Apology
7
Strategy to Prevent Corruption
8
Conclusion
Role of Institutional Environment In China
10
Regain Trust and Support
11
Effect on China’s Image
12
Western Perception Toward Asian Countries
12
Lesson Learn From Scandal
13
Bibliography
INTRODUCTION
The case discusses the tainted milk scandal that was unearthed in China in 2008. The milk scandal became public in August 2008, after it was disclosed that the baby formula produced by the Chinese dairy products company, Sanlu Group was contaminated with melamine, which caused kidney failure of many children, resulting in death in some cases. Later, the investigation by the government revealed that the products of 21 other Chinese dairy firms were also contaminated with melamine.
As soon the crisis became public, the Chinese Health Ministry ordered the dairy firms to recall the contaminated products and to destroy the unsold and recalled products. The Chinese Health Ministry started testing dairy products across the country.
Top executives of Sanlu were arrested. Government offficials who were found guilty were also sacked. China's dairy industry association announced that the affected children and their families would get compensation from the responsible dairy firms. To support the affected dairy farmers, the government also announced a subsidy.
New food safety draft laws, which set stricter food quality standards and demanded greater government responsibility, were reviewed on October 23, 2008. The case ends with a question on worthy of discussion as international businesses increasingly expand into emerging economies.
ISSUES
Action did by Sanlu by signing an advertising agreement on the condition that negative news related to the company was removed was an unethical reaction toward the crisis. They should serve the