Assignmetn 5 ASTEL MFG Yangon-1

Assignmetn 5 ASTEL MFG Yangon-1 - Exercise # 5 The Astel...

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Exercise # 5 The Astel Manufacturing Company Case Study Group Yangon: Kyle Bowen Min Chen Stephen Durino Zak Lotter Brent Young
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Executive Summary: We, Paul Bellows VP of sourcing, and Ralph Nance, director of component sourcing recommend that Astel Manufacturing Company relocates a group of buyers and consider making significant changes to our corporate policy regarding supplier “gifts” to our employees. We are implementing these new procedures and policies because there has been evidence of corporate bribery; that is, under-the-table dealing to promote unfair business transaction, from our suppliers involving at least two of our employees. Based on the importance of promoting our company’s image as a strong and ethical manufacturing operation, we have decided to not fire the buyers suspected of accepting bribery. Firing the employees would hurt our image and possible put us into some legal trouble as we do not have definitive proof of such fraudulent dealings. However, we must take some action, as we cannot allow these bribes to continue to corrupt Astel’s procurement department. Furthermore, we must put a damper on any other possible cases of bribery in the future. We have decided to implement a new corporate policy because it will send a strong message out to all the buyer’s that we have less tolerance for fraudulent corporate dealings. We considered cancelling future transactions with the suppliers that offered the bribes, however finding new replacements would be a lengthy and costly task.
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To implement these recommendations we need to place our suspicious buyers in a new department with different suppliers where they can be monitored. We need to address the issues of replacing their positions, and training them for the proper job. To do this effectively, we recommend replacing the suspicious employees with experienced and trusted buyers. We also need to have a review and rewriting of the corporate policy and implement it in a timely manner. The cons of enforcing a more strict policy include distrust of management and a possible decrease in employee productivity. To counteract these problems we will be honest and describe the reasoning behind the new policy without giving away any specific company or employees names. Issues to be addressed: Recently two FBI agents contacted Richard Henderson, the vice president of manufacturing for Astel’s Wichita division, with concerns about three individuals in their procurement department. While conducting an investigation of government contracts at P. B. Blake, a nearby company, the two FBI agents discovered that a buyer in Blake’s procurement department had admitted to receiving a substantial amount of gratuities as a bribe from local suppliers used by Astel. A sworn statement from a buyer at P. B. Blake included the names of three buyers from Astel who were also receiving gratuities from the same suppliers. This not
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This note was uploaded on 01/29/2012 for the course SCM 371 taught by Professor Tobias during the Spring '11 term at Michigan State University.

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Assignmetn 5 ASTEL MFG Yangon-1 - Exercise # 5 The Astel...

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