Drilltech, Inc., is a manufacturer of specialty drill bits. It is publicly traded on the NASDAQ. In

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Drilltech, Inc., is a manufacturer of specialty drill bits. It is publicly traded on the NASDAQ. In the past it has limited its market to the United States and Canada, but recently it has decided to enter markets in China, India, Australia, Singapore, Brazil, Kazakhstan, Uzbekistan, Mexico, Indonesia, and several countries in Africa. Because Drilltech has no established distribution network in these countries, it plans to hire a few salespeople for each country and then to allow these people to retain consultants from the local markets to make introductions and negotiate contracts. Most of the employees Drilltech plans to send abroad are Americans without extensive international experience. The company hopes to sell its drills to governments, governmentsponsored entities, and government-owned oil and gas companies doing business in the target countries. Contracts for sale will be subject to negotiation and could be denominated in the local currency. In several of the countries where the company plans to do business, small bribes are necessary if one is to do business at all—for example, to get a permit to operate a motor vehicle. Several countries, moreover, have a tradition of gift-giving in which business relationships are sealed by the exchange of favors, such as bottles of Scotch. In some of these markets, senior government officials regularly demand bribes or other favors (such as hiring their children) for the placement of any government contract. If you were designing Drilltech’s compliance program, what elements would you include and what steps, if any, would you demand of senior management in fulfillment of this task?

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