This case describes the bribery accusations and subsequent investigation of the Chinese subsidiary of a U.S. publicly listed Fortune 500 company, disguised as "Voles System". The primary purpose of the case is to illustrate the internal corporate governance challenges of developed-market multinational corporations (MNCs) operating in emerging markets. This case stands out in the management education field, as it fills a gap where there are very few teaching cases discussing the dark side of international business in emerging markets. After a brief introduction of the company's background, the case describes two anonymous internal "whistleblower" allegations that the Mainland China business unit (BU) had been bribing Chinese officials to win contracts. In response to these reports, the Legal Department conducted two investigations in late 2015 and 2016, respectively, but neither found concrete evidence of bribery, and the allegations could not be substantiated. A third report was subsequently made to the U.S. Department of Justice (DOJ) in April 2017. The DOJ placed Voles under formal investigation. While the investigation found that there was no concrete evidence of bribery of Chinese officials, several managers and staff of Voles's Mainland China BU had established a slush fund and related business entities to entertain senior managers of its key customers in China. The DOJ's investigation came at a great financial cost and hurt the company's reputation in the oil and gas industry. This case ends with multiple questions facing Voles and many MNCs operating in emerging markets: How did Voles fail to prevent such management malfeasance even after implementing industry best practices for corporate governance? What are some short-term measures through which Voles can address the situation in the Mainland China BU as revealed by the DOJ's investigation? What long-term measures should Voles implement to prevent such corporate governance failures from happening again?

This case focuses on the distinctive "paternalistic" leadership and management style of Ren Zhengfei, founder of Huawei Technologies Co., Ltd. (hereinafter "Huawei") and considers whether he needed to adapt his style in light of new challenges at the company. Ren's own military experience shaped Huawei's early corporate culture and management structure. It emphasized clear-cut goals, hard-and-fast rules, employee dedication and absolute obedience. At the same time, the company acknowledged the contributions of dedicated employees by remunerating them generously. This approach transformed Huawei into a company of strivers and fueled rapid business growth. Nevertheless, as the market evolved and employee characteristics shifted, the shortcomings of Ren's management model grew ever apparent. Consequently, Huawei's performance took a nosedive and employee satisfaction also sank. Beset by internal and external challenges, Huawei needed to completely rethink its approach to business, corporate culture and company management.