Essay on The Shakedown

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Case Analysis: The Shakedown

I. Introduction

This case portrays the widely propagated and accepted phenomena of bribes and corruption in developing countries. Specifically how it affects every sector of the Ukrainian society, therefore making it difficult for the American investors to establish companies there and to prosper solely on doing good business. The case describes the types of obstacles and ethical dilemmas being created for the investors as a result of bribery and extortion.


In analyzing these issues, we will first present a brief introduction to the situation.
Mr. Pavlo Zhuk, a young, but already well established, entrepreneur from California, is faced with a difficult ethical business decision concerning
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Zhuk was born into a comfortable life in California watching parents who eagerly modeled American values, was educated at the best American schools, worked for the best American technology firms, and thus learned and was comfortable with conducting business the American way.

Zhuk did a poor job recognizing these differences within himself and the environment in Kiev. In Unit 2 of our management course one of the topics discussed was cultural differences and IQ, Zhuk made the ill-founded assumption that because his lineage traced back to Ukraine, he was connected to and understood the business environment. He couldn’t have been more wrong.

It is only reasonable that any investor interested in starting a company in a developing nation to research and investigate the business landscape in such an unfamiliar terrain before opening up operations there. This is beneficial, as it will provide the prospective investor with important information about the business environment and practices. In particular, an investor should analyze the labor market, examine the costs of founding a company and consider the possible business ethics challenges. In our case, Zhuk needed to make certain his business strategy was in tune with the local culture, business practices and laws in Ukraine.

Cultural Framework

Ukraine is just a different animal, and because of the cultural differences
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