China Kitchen Case Study Example | Topics and Well Written Essays - 1750 words

China Kitchen - Case Study Example ethical and legal issue brought up in the Kitchen Best case invites ethical questions when doing cross-boundary business in Southern China and the risks associated to such business practices and how could such behavior/s be avoided in the future. The ethical and to certain extent legal issues that beset Kitchen Best became apparent at the end of 2009 when Malaysia-based distributor Shago commission a European designer to come up with a range of appliances for its 40th anniversary collection. Shago then placed orders with Kitchen Best with some of appliances ordered came with a special gift set of microwable tableware. Shago however complained that the bowls and plates in the gift sets were not microwable and this is breach of contract where Shago demanded both a refund and compensation. Upon investigation, it was found that Sze, Kitchen Best’s purchasing and production manager who had been responsible for sourcing the gift sets had awarded the contract to a factory in Dongguan that was owned by his brother-in-law. In return for the order, Sze and his wife were offered a free package tour to Europe. Wei, who knew about the personal relationship between Sze and the factor owner, had not reported it in view of their rela tionships with Li. When in-house testing later showed that the product was faulty, she informed Sze, who told her he would handle it. However, no remedial action was taken and Wei decided not to pursue the matter any further. This incident was followed by the incident with Haus de Metro where bribery happened in the testing and certification of samples. This occurred when a shipment that was sent to German retail chain Haus de Metro did not meet the company’s safety requirements contrary to the satisfactory testing report received by Kitchen Best. Kitchen Best had subcontracted HdM’s orderfor electric water dispenser to Qinghua Electrical Appliance Ltd as its own production lines were fully occupied. Kitchen Best arranged for Keemark