Shakedown Case
CASE STUDY: SHAKEDOWN
Statement of the Problem: What should Zhuk do to keep his business and to avoid extortion from government officials? Objectives:
To provide solutions on how companies in Ukraine can fight corruption and face threats of extortion.
To apply business ethics and corporate social responsibility
Alternative Courses of Action:
a) Pay – Extortion
Zhuk can pay off the Ukraine Tax Authority officials. After all, he would not be breaking the law if he did so. He will be a victim of extortion and succumbing to it is not a crime. He will consider the bribes as additional tax he has to pay for doing business in Ukraine and carry on with his company. He will be able to provide jobs for locals as his employees and keep all his long term investments in Ukraine.
If he allows himself to be a victim of extortion this may lead to further bribery and harassment in the future. He will be placing the business to the hands of corrupt government officials. This will place his company in a bad business environment
b) Pull Out - Quit Business in Ukraine
If Zhuk pulls out he would not contribute to corruption but he will give up his dream to establish a company in Ukraine. He will also be responsible to his local employees who will lose their jobs. He will also deprive the improvements in the software industry in Ukraine when he pulls put his company. Conclusion and Recommendation:
American business people generally prefer to conduct business in a way that’s consistent with the US and local law. They would prefer not to make illegal payments to anyone. Zhuk may have difficulty in imposing his cultural values on others, particularly in Ukraine where bribery is not illegal. However, if it’s his desire to create opportunity, to bring hope, and to help build a modern society, he should not allow himself to be a victim of extortion which may lead to further bribery and harassment in the future. He will be placing the business to the hands of corrupt
Statement of the Problem: What should Zhuk do to keep his business and to avoid extortion from government officials? Objectives:
To provide solutions on how companies in Ukraine can fight corruption and face threats of extortion.
To apply business ethics and corporate social responsibility
Alternative Courses of Action:
a) Pay – Extortion
Zhuk can pay off the Ukraine Tax Authority officials. After all, he would not be breaking the law if he did so. He will be a victim of extortion and succumbing to it is not a crime. He will consider the bribes as additional tax he has to pay for doing business in Ukraine and carry on with his company. He will be able to provide jobs for locals as his employees and keep all his long term investments in Ukraine.
If he allows himself to be a victim of extortion this may lead to further bribery and harassment in the future. He will be placing the business to the hands of corrupt government officials. This will place his company in a bad business environment
b) Pull Out - Quit Business in Ukraine
If Zhuk pulls out he would not contribute to corruption but he will give up his dream to establish a company in Ukraine. He will also be responsible to his local employees who will lose their jobs. He will also deprive the improvements in the software industry in Ukraine when he pulls put his company. Conclusion and Recommendation:
American business people generally prefer to conduct business in a way that’s consistent with the US and local law. They would prefer not to make illegal payments to anyone. Zhuk may have difficulty in imposing his cultural values on others, particularly in Ukraine where bribery is not illegal. However, if it’s his desire to create opportunity, to bring hope, and to help build a modern society, he should not allow himself to be a victim of extortion which may lead to further bribery and harassment in the future. He will be placing the business to the hands of corrupt