International Microcircuits, Inc. Megan Bedding, vice-president of sales for International Microcircuits, Inc. (IM), was delighted when IM was one of the few firms invited to enter a bid to supply a large industrial customer with their major product in a small foreign country. However, her top salesperson for that region had just called and informed her of certain “expectations” of doing business in the country:
1. Local materials representing at least 50 percent of the product’s value must be purchased in reciprocity.
2. The local politicians will expect continual significant donations to their party.
3. Industrial customers normally receive a 40 percent “rebate” (kickback) when they purchase goods from suppliers such as IM. (IM’s profit margin is only 20 percent.) With this new information, Megan was unsure about changing or proceeding with the bid. If it was withdrawn, a lot of effort would be wasted as well as a chance to get a foothold in the international market. But if she proceeded, how could these expectations be met in a legal and ethical way? Question: Devise a solution that addresses Megan’s concerns.