Forty Chinese Police to Five-Star Bali Conference: Scam?

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?

This case is ideal for use in courses on international business, business in China, corporate governance, and international human resources management. The case is applicable in the tertiary studies environment, and is best suited to MBA or executive education students. Students engaging with this case will be required to<ul><li>recognize and analyze the importance of guanxi in business in China;</li><li>identify the methods of creating and maintaining guanxi;</li><li>identify and understand the strategies and mechanisms used by the new Chinese government to expose those undertaking questionable guanxi-based practices;</li><li>recognize the methods and past practices used by corrupt officials and government representatives to gain from their positions of authority in the Chinese economy; </li><li>develop strategy, from a Chinese perspective, to minimize the probable punishment for being caught in an illegal situation;</li><li>understand how the new pressure from President Xi’s government team to eliminate corruption is dramatically changing the business landscape in China.</li></ul>

• Guanxi and mianzi , favours authorization , anti-corruption , real estate and police