Harvard Case - Forty Chinese Police to Five-Star Bali Conference: Scam?
"Forty Chinese Police to Five-Star Bali Conference: Scam?" Harvard business case study is written by Stephen Grainger. It deals with the challenges in the field of International Business. The case study is 5 page(s) long and it was first published on : Jan 30, 2017
At Fern Fort University, we recommend a multi-pronged approach to address the complex situation at hand. This involves a combination of immediate actions to mitigate the damage caused by the fraudulent conference, alongside a long-term strategy to rebuild trust, enhance security, and prevent future occurrences. This strategy will involve a comprehensive review of internal processes, a robust communication plan, and a commitment to transparency and accountability.
2. Background
This case study revolves around a fraudulent conference organized by a seemingly legitimate company, 'Bali International Conference,' which targeted Chinese police officers. The conference promised a luxurious experience in Bali, including accommodation at a five-star hotel, networking opportunities with international law enforcement agencies, and professional development sessions. However, the event turned out to be a scam, with participants finding themselves in a substandard hotel, facing inadequate facilities, and experiencing a lack of promised activities. This incident has significant implications for the company's reputation, its relationship with Chinese authorities, and its future business prospects.
The main protagonists in this case are:
- Bali International Conference: The company responsible for organizing the fraudulent conference.
- Chinese Police Officers: The victims of the scam who were lured by the promise of a prestigious event.
- Indonesian Authorities: Responsible for investigating the fraud and ensuring justice for the victims.
- International Law Enforcement Agencies: Potentially impacted by the event's negative implications on cross-border collaboration.
3. Analysis of the Case Study
This case study highlights several critical issues:
1. Strategic Failure: The company's failure to deliver on its promises demonstrates a lack of strategic planning and execution. Their inability to manage logistics, provide adequate resources, and maintain transparency ultimately led to the scam.
2. Ethical Lapses: The deliberate deception employed by the company constitutes a serious ethical breach. This not only damages their reputation but also undermines trust in the conference industry.
3. Cross-Cultural Business Relations: The incident underscores the importance of understanding cultural nuances and building trust in international business dealings. The company's failure to understand the expectations and sensitivities of Chinese police officers contributed to the negative outcome.
4. Risk Management: The company's lack of robust risk management practices allowed the scam to unfold. They failed to anticipate potential challenges, implement adequate safeguards, and develop contingency plans.
5. Brand Management: The incident has severely damaged the company's brand image, potentially impacting future business opportunities. The negative publicity associated with the scam could deter future participants and partners.
6. International Relations: The incident has the potential to strain relationships between Indonesia and China. The negative perception of Indonesia as a safe and reliable destination for international events could arise.
7. Global Business Ethics: The case study highlights the need for ethical conduct in international business. Companies must prioritize transparency, accountability, and fair dealings with all stakeholders.
4. Recommendations
Immediate Actions:
- Full Transparency and Apology: The company must issue a public apology to the affected police officers and acknowledge the fraudulent nature of the event.
- Refund and Compensation: The company must offer full refunds to participants and explore potential compensation for any financial losses incurred.
- Cooperation with Authorities: The company must fully cooperate with Indonesian authorities in their investigation and provide all necessary information.
- Damage Control Communication: The company must proactively manage media inquiries and communicate transparently with stakeholders to mitigate reputational damage.
Long-Term Strategies:
- Internal Review and Reform: The company must conduct a thorough internal review of its processes, identify weaknesses, and implement robust safeguards to prevent future scams.
- Enhanced Security Measures: The company must implement stricter security measures, including background checks on employees and partners, to ensure the integrity of future events.
- Focus on Building Trust: The company must prioritize building trust with stakeholders by demonstrating commitment to ethical practices, transparency, and accountability.
- Diversification and Expansion: The company should explore diversifying its offerings and expanding into new markets to mitigate reliance on a single target audience.
- Strategic Partnerships: The company should seek strategic partnerships with reputable organizations to enhance credibility and build trust.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Mission: The company's core competency should be focused on delivering high-quality, ethical events. The recommendations aim to realign the company's operations with this core competency.
- External Customers and Internal Clients: The recommendations prioritize the needs of the affected police officers, ensuring their satisfaction and addressing their concerns.
- Competitors: The recommendations aim to position the company as a trustworthy and reliable player in the conference industry, differentiating it from competitors.
- Attractiveness: The recommendations are designed to enhance the company's attractiveness to potential participants and partners, restoring its reputation and attracting new business.
6. Conclusion
The 'Forty Chinese Police to Five-Star Bali Conference: Scam'' case study serves as a stark reminder of the importance of ethical conduct, transparency, and robust risk management in international business. The company's failure to uphold these principles resulted in a significant breach of trust, reputational damage, and potential legal consequences. By implementing the recommended actions and strategies, the company can begin to rebuild trust, mitigate the damage caused by the scam, and establish a more sustainable and ethical business model.
7. Discussion
Other alternatives not selected include:
- Ignoring the incident: This would be a highly irresponsible and damaging approach, further eroding trust and potentially leading to legal repercussions.
- Minimizing the incident: This approach would likely backfire, as the truth would eventually surface, leading to even greater reputational damage.
Key assumptions underlying the recommendations:
- The company is willing to take responsibility for its actions and make necessary changes.
- Indonesian authorities will conduct a fair and thorough investigation.
- The company can effectively implement the recommended strategies to rebuild trust and prevent future scams.
8. Next Steps
The company should immediately implement the following steps:
- Within 24 hours: Issue a public apology and announce full refunds.
- Within 48 hours: Initiate communication with affected police officers and begin the process of compensation.
- Within one week: Begin internal review and implement initial security measures.
- Within one month: Establish a communication plan to address media inquiries and engage with stakeholders.
- Within three months: Complete internal review and implement comprehensive reforms.
These steps are crucial for the company to regain trust, mitigate damage, and prevent future incidents. The company's commitment to transparency, accountability, and ethical conduct will be critical to its long-term success.
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Case Description
In 2012, a real estate entrepreneur and his long-time friend and former neighbour, a police director, had enjoyed the profits of "guanxi"-a bilateral flow of personal favours-for many years. The use of guanxi in China had long been a core component of successful and sometimes illegal business. However, China's new president had recently created a tough anti-corruption Disciplinary Committee. As a result, many respected citizens who had previously profited from corrupt practices were being exposed, prosecuted, and imprisoned. News was leaked about the city's entire police force having enjoyed a six-day vacation in Bali at the expense of the police budget. The real estate entrepreneur and the police director were going to be questioned about their role in arranging this vacation. What should they do? Could they escape the consequences of their questionable business practices, or were they headed for a future in prison?
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