In this case, the students are presented with a situation in which a CEO is considering his options vis-à-vis the Italian government. The government originally gave Pignatelli permission to build a 6 million tone oil refinery. Pignatelli spent years and millions of dollars to build the refinery, taking care to not only meet but to exceed environmental regulations, and to change locations for the plant several times to appease locals. Now the Italian government will not allow him to run the refinery at full capacity - only at a little under 60% capacity. At this level of production, Gulf Italia will lose money and will probably also lose the partnership of Mobil Oil. Pignatelli could play by the rules, and apply for the new operations permits - which could take years. He could try to get Mobil to put pressure on the Italian government. He could pay $1 million to a person who might be able to "fix" things. He might bribe a government official directly to get the permits.
1. What should Pignatelli Do? What would you do and why?
2. Pignatelli seems to be leaning in the direction of hiring a consultant, who might use part of the money for bribes. If Pignatelli does not pay the bribes directly, does this absolve him of responsibility?
3. Bribes are illegal in Italy. Even if bribes are common practice there, does this justify paying them?
4. Does Pignatelli have a responsibility to Italian citizens to build an environmentally friendly refinery above and beyond what is required by law? Is it appropriate for Gulf to spend this extra money and essentially take it away from shareholders/
5. How would you feel if you were a lower-level employee in the company and learned that Pignatelli intended to pay bribes to get things "debottelnecked?" what would your ethical obligations be? Should you ignore the situation or confront Pignatelli? Should you inform your direct boss or go to the media?