Case Detail

Case Summary

Kirat Housing Development Society

Case Number: 5-416-752, Year Published: 2017

HBS Number: KE1044

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Authors: Alvaro Sandroni; Farhad Fatakia

Key Concepts

Ethics, Global Strategy, International Business, Negotiation, Reputations, Risk Management, Strategic Positioning, Emerging Markets

Abstract

Three months into his first job as an IT consultant, newly minted MBA Phil Lee was wondering whether he had made a horrible mistake. Initially, he had been thrilled with his employer, Orion Information Technology Consulting, and the prospects for his professional future. He had specifically requested to work on projects in emerging markets, and his bosses had responded by flying him halfway around the world to New Delhi to meet with the head of procurement of a luxury property developer, Kirat Housing Development Society (KHDS). Lee thought the reason for the meeting was slightly unusual: Orion was planning to make a bid to supply building management software for KHDS's newest luxury tower, and this meeting would be the "pre-bid" negotiation. Lee wasn't totally sure what they'd even be discussing, as the tender already provided full details on exactly what modules would be required and even included specific penalty clauses for delays.

The meeting at KHDS seemed ordinary at first, but quickly took a turn when the assistant to the head of procurement explained that Orion would win the bid if it offered him a $200,000 contract as an "independent consultant." Lee was stunned. To make matters worse, when he returned to his hotel room he found a gift waiting for him: an expensive-looking diamond pendant.

On his sleepless flight home, Lee's mind raced. Had his bosses known this would happen? Were bribes standard operating procedure? Now that he'd accepted a gift, was he complicit in wrongdoing? Lee didn't want to get fired, but he wasn't sure he could go along with this.

Learning Objectives

After reading and analyzing the case, students will be able to identify and quantify the personal and corporate risk of bribery; examine how bribery affects choices on a personal level; understand the Foreign Corrupt Practices Act (FCPA); and evaluate exit options, such as whistleblowing, and their risks.

Number of Pages: 11

Extended Case Information

Teaching Areas: Management

Teaching Note Available: Yes

Geographic: India; United States

Industry: IT consulting

Organization Name: Fictional

Decision Maker Position: IT consultant

Decision Maker Gender: Male

Year of Case: 2016