The marketing game

William, a ticketing officer of a travel agent, took advantage of high demand for discounted air tickets by offering priority access to select customers for bribes, while recommending others to higher-priced options.
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The marketing game
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Summer holiday was a peak season for travelling.  There was a high demand for air tickets, especially the discounted offers with limited supply.

William, a ticketing officer of a travel agent, was inundated with inquiries about discounted air tickets.  Because of the high demand for discounted air tickets, William saw it as a good opportunity to make up for his recent credit card payment.  William secretly contacted several regular customers, informing them about the upcoming special offers.  He implied rewarding him would grant them priority access to these limited discounted tickets.  Without much deliberation, several customers agreed to pay William $500 as a reward and successfully purchased the discounted tickets.  For other customers, William recommended high-fare tickets so that he could reserve low-fare tickets to the regular customers.

Case Analysis

William, as a ticketing officer of a travel agent, without obtaining permission from his employer, solicited and accepted advantages from customers for prioritising the sale of discounted tickets to them.  Both William and the clients who offered the advantages might contravene Section 9 of the Prevention of Bribery Ordinance (POBO).

Employees of travel agents should always handle customer requests impartially.  William disclosed the upcoming special offers of air tickets to several regular customers while intentionally recommending high-fare tickets to others.  Such an act breached professional integrity and negatively impacted the reputation of the travel agent.  If employees accept advantages to provide preferential treatment, it creates dissatisfaction or complaints from other customers and constitutes a violation of the POBO.

On the other hand, William should exercise prudent financial management and avoid risking his position due to debt, as this could lead to criminal offences. William’s illegal acts could be attributed to his poor financial management, which made him susceptible to financial temptations.  Ultimately, he resorted to taking risks to alleviate his financial burdens.  Employees should always exercise financial prudence to prevent falling into corruption traps.

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The cost of incentive

Timothy, a tourist guide, was assigned to guide inbound Mainland tour groups. When bringing tourists to visit the jewellery shop prescribed by his company, Timothy solicited extra rebates from the shop proprietor on top of the agreed rebate to the company.
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The cost of incentive
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Timothy had been working as a tourist guide for a travel agent for nearly ten years.  All along, his company and several jewellery shops had agreed that the shops would rebate his company 10% of the total sales proceeds from tourists.  With the company’s expansion, Timothy was also assigned to guide inbound Mainland tour groups.  

One day, as usual, Timothy guided the tourists to the jewellery shop registered by his company.  After settling the tourists, he chatted with Tom, the shop’s proprietor.  Tom remarked that Mainland groups always brought him good profits.  In response, Timothy suggested that if Tom provided him personally with an additional 5% rebate on top of the 10% given to the company, it would give him higher incentive to promote Tom’s shop to the tourists.  He added that a tourist guide’s enthusiasm in promotion could significantly influence the tourists’ purchasing decisions.  Unable to bear the potential loss, Tom reluctantly succumbed to Timothy’s request.  To compensate for the extra commission, Tom began misleading tourists into purchasing newly launched brands, falsely claiming they were well-known models and selling them at inflated prices.

That evening after the tourists had returned to their hotel, Troy, the Mainland escort of the tour group, offered Timothy a red packet and hinted that it would bring him good luck and ensure their smooth cooperation in the future.  Thinking it was a “first-meeting gift”, Timothy accepted it gratefully.

Case Analysis

According to Section 9 of the Prevention of Bribery Ordinance (POBO), it is an offence for an employee to solicit or accept any advantage in relation to his official duty without the permission of his employer.  Timothy, as an employee of a travel agent, solicited and accepted an additional rebate from Tom without the permission of the travel agent while carrying out his duties.  Therefore, both Timothy and Tom might breach the POBO.

Tom should promptly report Timothy’s solicitation to the ICAC.  By misleading tourists into purchasing purported branded goods, Tom not only jeopardised his company’s reputation, but also put the integrity of Hong Kong’s tourism industry at risk.

According to Section 19 of the POBO, trade custom or practice does not constitute a defence for the offeror and the acceptor of an illegal advantage.  Timothy should adhere to the company’s policies regarding the acceptance of advantages to avoid engaging in illegal or unethical behaviour.  Despite his role as a Mainland tour escort, Troy should also comply with the POBO and other laws while escorting the group in Hong Kong.

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Heading for disaster

William, a restaurant owner, offered a handsome referral commission to his friend, a general manager of a travel agency, for getting into the travel agency’s approved list.
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William had emigrated to Malaysia for years and set up a restaurant in a renowned seafood centre there. At a recent travel trade exhibition held in Malaysia, William met his friend Patrick from Hong Kong. Patrick, a general manager of a Hong Kong travel agency, was responsible for designing itineraries for his company’s group tours. In order to secure Patrick’s assistance in putting his restaurant on the company’s approved list, William proposed giving Patrick $30,000 plus a further commission of $10 per head for future referral of tourists. William added that the money could be deposited in the bank account of Patrick’s wife to avoid any trouble.

Later, William’s restaurant was successfully included in the travel agency’s approved list upon Patrick’s recommendation. Soon after that, William deposited $30,000 into the bank account of Patrick’s wife.

Case Analysis

According to Section 9 of the Prevention of Bribery Ordinance (POBO), it would be an offence for Patrick, (an employee of the travel agency) without the approval of his employer, to accept advantages (i.e. $30,000 from William) for putting William’s restaurant into the company’s approved list.  William might also violate POBO by offering bribes.

Although the commission was deposited into the account of Patrick’s wife, Patrick might still commit a corruption offence.  Under the POBO, a person is considered to have accepted an advantage even if a third party receives the advantage on his behalf.

Moreover, it is important to note that it shall be an offence under the POBO if any act (including includes promising, agreeing, soliciting or accepting advantages without permission, etc.) of bribery takes place in Hong Kong.

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Product recall

Clara, a food buyer, discovered that some wafers were infested with insects. She was instructed by her boss to sell the remaining wafers to other suppliers. What should Clara do?
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Clara worked for Maria, the buyer of a gourmet food department. They received a shipment of thin little wafers from a foreign country that had cream filling with fruits. The wafers were packed in foil-covered boxes, but somehow some wafers were infested with insects. Clara and Maria assumed that the news was not widely spread out yet because not all of the customers brought back the contaminated product.  But some customers did return the product.  Obviously, Clara and Maria could not continue to sell them. They couldn’t inspect all the boxes and keep the uninfected ones because there were too many boxes.  Also, the inspection would involve damaging the foil-covered boxes which would lead to a loss of products worth $900,000.

Maria said that the manufacturer would not refund them because the infestation occurred very possibly during the shipment or even during the storage at the food department’s warehouse.   Maria told Clara to get rid of the product by all means.  Clara thought that Maria meant a disposal of the product; but Maria then clearly said, “Absolutely not disposal. Call YY and KK. They operate retail stores in the new towns and sell almost anything. We’ve got to get some of our money back.” Clara was shocked when hearing the instructions.

Should Clara follow Maria’s instructions? Would it be better if she told YY and KK the truth?   What if the product brought in thousands of complaints?  Clara found herself in the middle of a nightmare.

Case Analysis

Clara was facing an ethical dilemma that might put her personal values such as respect, responsibility and honesty to challenge. In handling the situation, Clara should identify the relevant facts and take stock of all stakeholders concerned. The following factors should be taken into consideration when identifying viable alternatives and choosing the best course of action:

  1. Any violation to her professional, industry specific, or company code of conduct?
  2. Is it against the Law?
  3. Does it correspond with her self-values such as loyalty, honesty?
  4. Can she disclose her decision to others openly and honestly without misgivings?

The ETHICS PLUS ethical decision making model might be helpful for her in solving the dilemma.

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Unethical advertising

Donald, a department head of a toy company, strongly felt that the company’s TV ads were not suitable for children. He raised the issue to the company’s president who warned him to keep silent on the matter.
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As the head of the marketing department of a toy company, Donald strongly felt that the company’s recent TV ads which were full of violence were unsuitable for children.  He knew that his criticisms of the ads at executive meetings did not make him popular among the senior management.  However, Donald was shocked when the company’s president warned him in a firm tone to keep quite on the matter in the coming executive meeting because the ads generated a lot of sales.  The president added that the company had to pay dividends to the shareholders and could not afford to turn down the profit.  

What should Donald do?  Should he refrain from expressing his views because of the president’s warning?   Should he follow his conscience?  Would it be possible to replace the existing advertisements with “healthier” ones?

Case Analysis

Donald was facing an ethical dilemma that might put his personal values such as responsibility, honesty and compassion to challenge. In handling situation like this, Donald should identify the relevant facts and take stock of all stakeholders concerned. The following factors should be taken into consideration when identifying viable alternatives and choosing the best choice of action:

  1. Any violation to his professional, industry specific, or company code of conduct?
  2. Is it against the Law?
  3. Does it correspond with his self-values such as loyalty, honesty, compassion?
  4. Can he disclose his decision to others openly and honestly without misgivings?

The ETHICS PLUS ethical decision making model might be helpful for him in solving his ethical.

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Failure to disclose relevant information

Fagin, a sole agent for a sports bag, received a complaint about the quality of the bag. He then considered to make a sales campaign to sell all the stocks before the news got around…
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Fagin was a sole agent for a sports bag imported from a foreign country.  The bags appealed to teenagers and came in various striking colours.  They were renowned for its high quality and being colour-fast.  One day, Fagin received a complaint from a customer that the colour of the bag ran off shortly after the purchase.  Fagin quickly made a refund and hushed up the matter.  To avoid further financial loss, he was planning to get rid of all the stocks by a massive sale on the bags before the related news broke out.  Meanwhile, he also wondered if he should disclose the defect to the distributors in Hong Kong.  He thought it would be fine during massive sale as long as he did not lie about the flaw but simply avoid mentioning it.

Was Fagin acting wrongly?  Would his failure to disclose relevant information be as bad as making false claims about his products?  Should he call back all the defected products from the market in order to maintain a good business reputation?

Case Analysis

Fagin was facing an ethical dilemma that might put his personal values such as responsibility and honesty to challenge. In handling situation like this, Fagin should identify the relevant facts and take stock of all stakeholders concerned. The following factors should be taken into consideration when identifying viable alternatives and choosing the best course of action:

  1. Any violation to his professional, industry specific, or company code of conduct?
  2. Is it against the Law?
  3. Does it correspond with his self-values such as responsibility or honesty?
  4. Can he disclose his decision to others openly and honestly without misgivings?

The ETHICS PLUS ethical decision making model might be helpful for him in solving his ethical dilemma.

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Pocketing discount

Ivy was a sales manager of a sportswear distributor. As bulk purchase of every 100 sports jerseys could enjoy a 10% discount, she thought of combining two orders and pocketing the discount by doctoring up the invoices…
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Ivy was a sales manager of a sportswear distributor. The company had a discount policy for bulk purchase of sportswear that every 100 sports jerseys sold would enjoy a discount of 10%. The soccer jersey of the latest winning team was selling like hot cakes.  A small sportswear shop in Mongkok placed an order for 50 of this jersey and another shop in the area also ordered another 50.  Since they were in the same district, the delivery would be made together.  A thought struck Ivy.  Why didn’t she combine the two orders and make out an order for 100?  She could doctor the invoices up. The discount would be a source of her extra income. And it would not harm anyone.

But would it be considered as cheating the company? Should she split the gains into three and share with the two sportswear shops?

Case Analysis

Under the Section 9(3) of the Prevention of Bribery Ordinance, it is an offence for any agent, with intent to deceive the principal, to use any false, erroneous or defective receipt, account or other document in respect of which the principal is interested.

Ivy might breach Section 9(3) of the Prevention of Bribery Ordinance for using false documents with the intent to deceive her company.  She might also commit an offence of deception, contrary to Section 17 of the Theft Ordinance.  

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Untrue information in sales

Becky worked in an electronic appliances distributor. She was asked by her boss to mislead customers to believe that they had the goods in stock. Should Becky listen to her boss and lie to the customers?
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After graduation, Becky worked in a company that distributed electronic appliances.  When customers phoned the office asking for information on certain electrical appliances, Becky would look up the model, the price, and the inventory level in the computer database.  The boss always instructed Becky to tell the customers that they had the goods in stock, even if it wasn’t true. The boss explained that this tactic was to secure the orders first even when the required model was certainly out of stock in the market.  He argued that, as long as the customers did not know the stock situation, it was no harm for customers to wait and new models could even be suggested while they were waiting.  This stalling tactic was better than letting customers go to the competitors.  The boss’ argument sounded justified, but Becky did not feel comfortable because this meant she had to lie frequently.

What should Becky do?  Would she lose her sense of integrity?  Should she try to win customers in another way?

Case Analysis

Becky was facing an ethical dilemma that might compromise her personal values such as honesty and responsibility. In handling the situation, Becky should identify the relevant facts and take stock of all stakeholders concerned. The following factors should be taken into consideration when identifying viable alternatives and choosing the best course of action:

  1. Any violation to her professional, industry specific, or company code of conduct?

  2. Is it against the Law?

  3. Does it correspond with her self-values such as honesty and responsibility?

  4. Can she disclose her decision to others openly and honestly without misgivings?

The ETHICS PLUS ethical decision making model might be helpful for her in solving her ethical dilemma and choosing the best course of action.

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Penny wise and pound foolish

Jasper, a sales associate, accepted red packets from customers in exchange for favorable prices, leading to neglect of those who didn’t give gifts and resulting in increasing complaints against him.
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Jasper worked as a sales associate for a renowned audio-visual equipment company for many years.  Through his expertise and friendly demeanor, he gradually established an extensive customer network.

Some customers hoped Jasper could sell products at a "favourable price". As a result, they started giving him red packets, hoping he would offer them lower prices.  They even asked for company gifts when their purchases did not meet the limit.  Jasper happily accepted these offers and believed that this would not only satisfy his customers and strengthen his relationships with them, but also help him meet his sales targets, ultimately benefiting the company.  It seemed like a win-win situation.

However, Jasper soon became indifferent to customers who did not provide red packets, and even deliberately neglected their requests, leading to a growing number of complaints against Jasper.

Case Analysis

As an employee of the company, Jasper is regarded as an agent under the Prevention of Bribery Ordinance (POBO).  Without the company’s permission, he accepted red packets from customers for abusing his official duties, which might breach Section 9 of the POBO.  Both the offeror and acceptor of the bribes are guilty of the offence.

A red packet is a kind of advantage.  Section 2 of the POBO states that advantages include fee, gift, loan, reward, commission, office, contract, service, favour, payment, and more.  However, entertainment which refers to food and drink consumed on the occasion is excluded.  In addition, there is no monetary limit for advantage.  Therefore, Jasper’s acceptance of these advantages might have violated the law regardless of the amount involved.

Retail staff should adhere to company guidelines when selling products and providing company gifts.  Otherwise, it may lead to customer dissatisfaction or complaints, negatively impacting the company’s reputation. 

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The unspoken rule

Gloria, a regional manager of a chain retail store, repeatedly demanded gifts from her subordinates for favorable treatment, believing it fostered friendly relationships without recognising the ethical issues.
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Gloria, a regional manager for a chain retail store, was responsible for overseeing daily operations and staff management across multiple branches.  Her duties included handling employee transfers, approving leaves, and recommending promotions.

Gigi, a sales associate, revealed that over the past two years, Gloria had repeatedly demanded gifts from her subordinates, including luxury handbags and jewellery.  Gloria implied that only those who provided gifts would be considered for desirable positions, extended leave, or promotions.  As a result, many employees, including Gigi, felt pressured to comply to avoid jeopardising their careers.  Gloria viewed this practice as a usual way to foster friendly relationships with her subordinates and did not anticipate any problem with accepting gifts from them.

Case Analysis

Gloria might contravene Section 9 of the Prevention of Bribery Ordinance (POBO) if she, without the permission of her employer, the retail store, solicited and accepted gifts from subordinates for abusing her official duties to favour some staff members when arranging deployment, leaves or promotions.  Subordinates who offered the gifts might also commit an offence.

According to Section 11 of the POBO, once an agreement to offer and accept a bribe is reached, both the offeror and acceptor of the bribe shall commit an offence even if the acceptor claims that he did not actually have the power, right or opportunity to do so, did not intend to do so, or did not in fact do so.  Hence, Gloria and the subordinates who offered the advantages might still breach the POBO even if Gloria did not in fact show favour to them in staff management and the purpose of the bribery had not been carried out.

It is important for supervisors and subordinates to maintain a positive working relationship.  However, supervisors must avoid blurring the lines between personal and official capacities by accepting gifts from subordinates.  This could make them feel obliged to return the favour and ultimately hinder their ability to fulfil necessary personnel management and supervisory responsibilities.  Gloria’s behaviour may attract criticism and dissatisfaction from other subordinates and colleagues, negatively impacting management effectiveness.  Additionally, it can undermine employee morale and create an undesirable culture.

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