Widespread Corruption Debilitates Chinese Manufacturer
By Daniel Rabanales, Marketing −
Chinese manufacturer struggles to address rampant corruption in its company.
The biggest telecom equipment manufacturer in China, Huawei, has incriminated over 100 employees on charges of corruption, bribery and dishonesty.
The Asian tech giant, like any other company, seems to be confronting the imminent challenge that its business sales model presents — an opportunity to cheat the system.
Huawei’s employees were involved in a series of under-the-table corporate transactions with sales representatives in which rebates were the instrument of disguise—giving product rebates back to sales agents instead of to the company. The bigger the rebate, the larger the profit margin for agents and the bigger the company loss.
The Means to Corrupt Ends
Huawei adopted its current business model when it noted sluggish growth in its device sales and telecom partners, a strategic move considering most in the industry report yearly increases of 32 percent.
This approach, nevertheless, is also fostering and providing loopholes in their system, providing sales agents with opportunities to engage in fraudulent activities.
To those who wouldn’t think twice to take such an opportunity, the “harsh” punishment and intense internal reviews promised by the company seem to provide no impediment.
Necessary Measures to Prevent Corruption
The clever practice of stealing rebate money proved to be somewhat obvious as executives of the company met to address the matter. The individuals involved were punished and Huawei has also taken steps in overall corruption prevention within the company, a crucial effort for a company with yearly revenue of $239 billion Yuan.
For companies with similar corruption problems, there are efficient solutions to help. Scientists have been working hard to develop clinical and ethical ways of detecting deception.
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This lie detector test presents a solution for a time in which corruption is ever increasing and pervasive, a solution for our time.
