GlaxoSmithKline and the China Bribery Scandal

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Multinational corporations (MNCs) are investing and operating in many foreign markets around the world. With this globalization, it is becoming increasingly important for managers at all levels to become proficient in cross-cultural management. This paper will explore the challenges encountered by a British expatriate managing the Chinese business unit for a British pharmaceutical MNC. An assessment of the national cultural differences using Hofstede’s research on work-related values differences will be explored. The data will be analyzed to determine if these differences had an impact on the organizations ability to successfully manage cross-culturally.

GlaxoSmithKline, Plc (GSK) is the largest British pharmaceutical company with a presence in more than 100 countries around the world. In July 2013, the Economic Crimes Investigations Unit of the China Public Security Ministry in Beijing accused GSK of bribing government officials and doctors to prescribe higher costing branded drugs to treat their patients. GSK reportedly offered approximately $489 million in illegitimate travel packages, meeting expenses, entertainment and cash over six years to these doctors and officials (Sukhija). Often, the incentives were funneled through travel agencies, who would send doctors on international trips and provide them with luxuries while at other times payments were simply made in cash.

GSK released a statement explaining that the allegations made against the senior executives of the company are ‘shameful'. ”We are deeply concerned and disappointed by these serious allegations of fraudulent behavior and ethical misconduct by certain individuals at the company and third-party agencies. Such behavior would be a clear breach of GSK'...

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