International Marketing/Trade
1. Should he pay the “commission” and, if so, to whom? Explain your reasoning. If he pays, how should he handle the situation with the sales manager and the vice president of sales? In your answer, include a discussion of the arguments in favor of paying and the arguments in favor of not paying.
I think he should pay commission to the Middle East Ministry’s advisor. Like the advisor and the agent lawyer said it is common for these deals. The German and the Italian vendors did it. Also local agent’s most of clients which means Canadian companies did it before. It is a huge deal and he has to take it. Also advisor negotiated only $75,000 off the contract price. And I think the reason is he is interesting in his commission not about government’s budget. Therefore, he also wants to finish this deal. Matthew Kwong won’t be able to make this deal. Because the advisor is going to make an agreement with the other company which gives commission. This will be very bad for Matthew to lose his first attempt. He may lose his self confidence and also his reputation in front of his managers.
I think sales manager and the vice president also aware of these situations and the reason they said “do whatever it takes” they knew it would be necessary. As it mentioned it was Matthew’s first negotiation with government officials and may be because of that he did not understand what his managers meant. In case of they are against this type of commission, they can be convinced with these agreements benefits and opportunities. It is a big chance to enter this market with high amount of profits. Beside this, if they don’t accept their potential competitors from other countries will do this and capture the Middle East market. In addition it can be made with legal ways. Commission can be channelized to agency legal fee. Therefore it doesn’t include any risk.
In case of paying the commission, it will be possible to enter such a big market. Also they can enlarge their business to neighbor
I think he should pay commission to the Middle East Ministry’s advisor. Like the advisor and the agent lawyer said it is common for these deals. The German and the Italian vendors did it. Also local agent’s most of clients which means Canadian companies did it before. It is a huge deal and he has to take it. Also advisor negotiated only $75,000 off the contract price. And I think the reason is he is interesting in his commission not about government’s budget. Therefore, he also wants to finish this deal. Matthew Kwong won’t be able to make this deal. Because the advisor is going to make an agreement with the other company which gives commission. This will be very bad for Matthew to lose his first attempt. He may lose his self confidence and also his reputation in front of his managers.
I think sales manager and the vice president also aware of these situations and the reason they said “do whatever it takes” they knew it would be necessary. As it mentioned it was Matthew’s first negotiation with government officials and may be because of that he did not understand what his managers meant. In case of they are against this type of commission, they can be convinced with these agreements benefits and opportunities. It is a big chance to enter this market with high amount of profits. Beside this, if they don’t accept their potential competitors from other countries will do this and capture the Middle East market. In addition it can be made with legal ways. Commission can be channelized to agency legal fee. Therefore it doesn’t include any risk.
In case of paying the commission, it will be possible to enter such a big market. Also they can enlarge their business to neighbor
References: 1. International Monetary Fund, OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, 2001, Retrieved from: http://www.imf.org/external/np/gov/2001/eng/091801.pdf 2. Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and Related Documents, 2011, Retrieved from: http://www.oecd.org/dataoecd/4/18/38028044.pdf