Kitchen Best Case Summary Essay

1064 Words Sep 18th, 2012 5 Pages
KITCHEN BEST: ETHICS WHEN DOING CROSS-BROUNDARY BUSINESS IN SOUTHERN CHINA
CASE SUMMARY * Brief background and context
Henry Chan, inherited Kitchen Best Appliance Co. Ltd---a home electrical appliance company from his father Chan Dong-hwa, is facing the challenge of establishing a more efficient internal control mechanisms of the company to ensure its future success. Kitchen Best Appliance Co. Ltd belongs to small- and medium-sized enterprises and is based in Hong Kong with its own manufacturing plant in Guangdong province.
As a chief executive, Henry Chan is more aggressive than his father. He focused on expanding the company’s reach in the European and American markets and brought a more western and less paternalistic management
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b. Haus de Metro: Testing and Certification issues
Kitchen Best subcontracted HdM’s order to Qinghua Electrical Appliance Ltd. Kitchen Beat arranged for an independent testing agency to conduct product testing and inspection as required by HdM.
Qinghua’s proprietor bribed the leader of the testing agency, who allowed Qinghua to interfere with the sample drawing to pass the test. Henry Chan did not pursue the case further for fear of losing profit and the customer. c. Honghua Appliances: New management
Honghua Appliance, A key customer of Kitchen Best changed its management style which made the Eddie Lau, the general manager of Honghua Appliance dare not receive kickback from Ma, the operations director of Kitchen Best, to place orders of kitchen appliances with Kitchen Best as before. In fact, Ma regularly used kickbacks, entertainment and gift-giving to open and maintain accounts, and expenses were reimbursed to him through fake invoices booked as “entertainment expenses”. He also inflated the amount for his own personal gain. ii. What is the short-term impact to Kitchen Best versus the long-term impact? Is Kitchen Best’s reputation at risk if such information becomes public? iii. As a young chief executive without much experience, will Henry Chan suffer from making such innovative revolution on internal control mechanisms that may lead to losing important employees and customers?

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