Kitchen Best

Topics: Management, Ethics, Business ethics Pages: 6 (1692 words) Published: November 30, 2012
Grade: 84/100 87/100
Challenges: 16/20
Causes: 16/20
PoA: 20/25. Be more specific
Research: 20/20
Writing: 12/15. Work to organize your paper more concisely and coherently with more effective headings/subheadings/visual aides Grade update: I added 3 more points to make this section 15/15 based upon your re-draft.  Henry Chan, who is the CEO of Kitchen Best, has set some ambitious targets for the business in 2008. However, his plan suffered a setback when a series of crises happened in 2010. These incidents involved in serious management problems such as personal gains made at the expense of the company and kickbacks offered and accepted between Kitchen Best and its partners. Symptoms

Deep rooted practices of kickbacks, bribing and corruption:
Accepting kickbacks, bribing and corruption were common in business dealings of kitchen best. Chan dong, founder of kitchen best treated his employees as family, and turned blind eye on any such practices as long as they were helpful in business expansion. But later when Henry Chan took over the business, a series of incidents had led him to take a deeper look into the company and uncover serious instances of misconduct. Unethical means followed by kitchen best’s most trusted employee: The shago incident :

Horatio Sze :
Sze awarded the contract to a factory owned by his brother in law, for his personal gain. Knowing that the products were faulty, he hasn’t taken any remedial action or cancel the contract. Macy wei :

Having known that the products showed faulty in the in-house testing and Sze’s negligence towards this for his personal gain, she hasn’t reported it to the higher management, considering the good relation between Sze and Li. Ignorance of Henry and Ma luk :

Sze reported directly to Ma Luk. Neither Ma took the responsibility to enquire further on the issue, nor did Henry involve himself much in monitoring the decisions of sub-contracting made by Sze. Haus de metro :

Henry Chan, after having learnt from an anonymous letter that a shipment for German retail chain HdM did not meet the company’s safety requirements, did not pursue the case any further for fear of losing the customer. Honghua appliances :

Ma Luk:
Ma has built good relations with Honghua’s general manager for greater china, through wining, entertainment, dining and offering kickbacks. But the changed management of Hanghua was strictly against these practices and reevaluated the competency of all its suppliers. So, kitchen best’s relations with Honghua were at risk. Also, Ma has misused the company expenses for his personal gain. Henry Chan:

Henry Chan didn’t have much grip on the clients and relations with them. He was mostly dependent on the experience of the senior management, like Ma who were mainlanders, to build relations with the clients and customers and he saw such practices as inevitable part of Chinese business culture. Lack of well-designed financial policies:

Kitchen best did not have any well-defined policies or guidelines to control the expenses for entertaining customers. Henry Chan’s Cultural barrier:
Henry Chan found it difficult to deal with mainland customers due to his cultural barriers. He was born and brought up at Hong Kong, and had not much exposure to deal with the mainland customers. So he had difficulties to cope up with the business culture and dealings with mainlanders. He had to depend on senior management, hence had no proper grip on the business there. Causes:

Unplanned/sudden shift in management:
Kitchen best’s employees were not prepared for the sudden change in management from Chan dong to Henry Chan. Each of them had completely different managing styles. Chan followed a paternalistic managerial style, treating the employees as a family and maintaining good relations with them, while Henry followed the western style of management. This gave the employees a chance to misuse the liberty of taking decisions that western style invoked • “In the...
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