Case Study: GSK's Bribery Scandal in China and Its Implications

This case study examines the GlaxoSmithKline (GSK) bribery scandal in China, detailing the company's actions of offering bribes to doctors and hospitals to promote their medications. The analysis explores the ethical implications, the response of GSK, and the impact on the company's performance and future outlook in China. It addresses whether GSK created a corrupt environment, the targeting of foreign companies, and the current business environment in China. The report also provides advice to CEOs of multinational companies considering doing business in China, emphasizing the importance of understanding local laws, culture, and the challenges posed by corruption and market access restrictions. Finally, the case study emphasizes the lessons learned regarding ethical business practices, legal compliance, and the importance of adapting to local regulations when operating internationally. The document is a student submission on Desklib, a platform providing AI-powered study tools and resources.

Running Head: GSK
GSK Case Study

GSK Case Study 1
Table of Contents
Introduction......................................................................................................................................3
Lesson Learned................................................................................................................................8
References........................................................................................................................................9

GSK Case Study 2
Introduction
In this present paper, we will discuss the case study that is related to the GlaxoSmithKline. This
is abbreviated to the GSK. The Company had it's headquartered in the Brentford, London. The
company established in the 2000's. There was the merge that happened between the two
companies namely, Glaxo Wellcome plc with the Smith Kline Beecham plc. This company
mainly deals with the vaccination, biology and the health care of the consumer. The mission of
the company was “to do better”, “to feel better” and “live longer”. This report will emphasize on
the topic that is related to the bribery related to the hospital and the GSK in the China. The GSK
stated by the authorities of the Chinese regarding the bribery in the July 2013. The GSK has
offered huge money to the doctors of the China to prescribe their medicine only. (PalgrBussel et
al. , 2016)
1.) The first part of the case study focuses that whether GSK help to create the corrupt
environment or not? Is the company needed to be blamed for this scandal? As the
overview of the Case study is done and it tells that the GSK needed to blame for the
creation of the corrupt environment in the China in 2013. The GSK offered three billion
Yuan in bribes to the doctor and the hospital. So that the doctors will prescribe the more
drugs of their company only. It was detained by the Chinese authorities and has alleged
that they have offered the money to the doctors or we can say that they have created this
corrupt environment in the China. The Company is the third largest one in terms of
creating the revenues. So in order to increase their revenues and to expand their market
share the company decided to take this step. The Company can be solely blamed for this
scandal that had happened. They also received the kickbacks from the local agency that

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deals in the traveling to arrange the conference. The authorities have also found that the
bribery was the core activity of the company. In order to boost the share prices and the
sale so the company was forced to choose this path. There was the serious violation and
this case was one of the high-profile cases of the China. So bribery was one of the
unethical and illegal practices that have been considered something wrong around the
globe.
2.) The second part of the report or the case study focuses on the content that are the local
companies similarly targeted in the China, as the GSK was targeted because it was the
foreign country? GSK was caught somewhere in the middle of this campaign as it offers
the huge money to the doctors. This case was quoted as the high-profile case in the
China. It was founded that the foreign countries are easily targeted in the China and
according to the Financial Times, it stated that targeting the local companies in the China
is quite risky because of the potential domestic political gain. The Chinese authorities
also say that the foreign companies are not aware of the laws and the regulation of the
countries. That’s why there is more demand of the local companies. The local companies
in the China have also gained the trust of its authorities. China was found in the middle of
growing the anti-corruption program. The cases of the corruption were really less when
there were no foreign companies. But as soon as the foreign countries came to the China
the corruption cases have increased a lot. That’s why the local companies are not targeted
easily as compared to the foreign countries.
3.) The third part of the report or the case study focuses on the question that emphasizes that
how the GSK respond to this case and the response was professional according to our
viewpoint. The GSK says that it is the allegation on their company. The China has raised

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the question over their behavior. The Chinese authorities quoted that this type of the
behavior is considered to be fraudulent. So the GSK executives are deeply hurt by the
behavior of the authorities of the China. The GSK people says that they are too much into
their work and they are deeply concerned with all these affairs. They are deeply
disappointed by the allegation of the China Authorities. They say that this type of the
behavior is the clear instance of the breach of their system, the procedure that is related to
the governance, values and the standard as well. They also stated that they take this
matter very seriously and they are co-operating with the authorities of the China fully.
They also said that they have the zero-tolerance for any of the behavior. The way they
have responded to the allegation is truly professional because they have covered so many
terms and conditions in their statement that gives us the clear picture that their statement
is really professional. After all these things happened but still, GSK stated somewhere
that they will cooperate to the fullest with the China Authorities.
4.) The fourth part of the report or the case study emphasizes on the topic that what is the
current scenario of the GSK in terms of their performance and what is the company's
future outlook in the country in terms of the growth. As the report says that the corruption
cases are moving from the China and this is happening because of the anti-corruption
laws that are formed by the government of the China. Especially they are moving the
corruption from the health care. This also has being found that GSK is really doing well
these days Although there was certain allegation which was put on the performance of
the company This also hamper the growth of the company. GSK executive says that they
have the good growth opportunity in the China. This will provide the golden opportunity
to the company which will help to expand their market share. It will also help to increase

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their share price also. So the company sees the good growth opportunity in the country
like China. The current investigation says that the quality of the GSK is appropriate with
the benchmark of the company's quality. GSK has rushed into the China market because
they know that they can take the best advantage in the area of the medical treatment. This
also has been found that the market has grown 2% according to the current investigation.
5.) The fifth part of the case study focuses on the matter which is related to the factor that is
China becoming a less hospitable place for multinationals? The answer to this question is
yes because there was not that much corruption. But as the MNCs came to the China the
corruption has started on the large scale. The corruption has spread very vastly. The
corruption has occupied too many areas including the technology, medicine, healthcare
and the automobile. This has been affecting the name of the company to the large extent.
Now the foreign companies in the China need to be very careful because of the
international law that is related to the Foreign Corrupt Practices Act. This act is still very
extensive and active too. That's why we can say that it is the very less risky place for the
foreign companies. The China government says that it is very less hospitalized for the
foreign countries, not because of the corruption but there are several factors. Those
factors are security issues, the general security, and the health care. They also found
difficulty in coping with the political issues also. The foreign countries or the MNCs need
to be very smart if they want to operate in the China. They should also aware of the laws
and regulation that are prevailing in the country. (Ismail et al . , 2016)
6.) The sixth part of the report or the case study help us in determining the certain facts that
are related to our advice to the CEO of the company that has planned to recently move to
the China. The China is the place where there is more pain and less gain for the

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multinational companies. The profit of the MNCs is flagging day-by-day and the cost is
increasing. So the CEO of the multinational company should be clear with the rules and
the regulation of the China. I will advise that the CEO of the multinational company must
thing on his decision to do the business in the China because the authorities and the
government of the China have made the life of the MNCs and the foreign countries really
difficult. This is due to the limited market access in the China. Doing the business in the
China as the MNCs is really crucial because the higher authorities of the China have
restricted so many areas for the MNCs. The competition is also very high. The battle of
earning the high profit is also very difficult. So the CEO of the multinational company
needs to think once more about moving to the China.
7.) The seventh part of the case study or the report focuses on the laws that the multinational
company should keep this in mind before operating internationally. The company should
be aware of the culture of the country in which it is planning to operate. The culture plays
a vital role when the MNCs operate in other countries. The second most important thing
is the environment of the country. The MNCs also sees the market opening measures.
They also need to analyze the economy of the country whether it is slow or restructuring.
They also need to determine that lax regulation in the country. They also need to fix few
segments that are what is the growth rate in that country, what are the social pressure ,
what is the market risk, what is the target market that they need to target and what are the
government norms and the regulations. When the company will put all these points in the
mind. This will help them to grow further. It will also help in expanding the market share.
It will also help in generating the high revenue and also help in increasing the share
market. (Zamek-Gliszczynski et al . , 2015)

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Lesson Learned
At lasts the lesson that we have learned from the GSK individual case. It is that the GSK was the
company which deals in the health care. They offered the huge bribery to the doctors and the
hospital of the China. They did this so that the doctors of the China can suggest their medicines
and the drugs so that they can expand their market and also increase their revenue. At the end,
this has been notifying to the China Authority and the strict actions were taken regarding this.
This case was made one of the high profile cases. This case helped us to learn the lesson that the
corruption while operating globally is still the biggest crime and one shouldn't do this because it
hampers the name of the company. It also spoils the brand image of the company.The company
also needs to understand the meaning of working under the legal system. One must learn the
lesson that they should operate ethically while dealing internationally. The company needs not to
violate the laws and the rules of the country. The country needs to analyze the importance of
dealing ethically and legally. The bribery case is limited to the nations but they are not expected
in dealing internationally. I also learned the lesson that the government of the China has made
the life of MNCs and the foreign countries really difficult. The first thing that the company needs
to analysis first while operating in the China that whether they have made payment to the travel
agency or not. They should also determine the implication of the risk on our company.
Seeing the GSK case study we have learned that how GSK professionally respond to the
allegation and is doing really well.

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References
Zamek-Gliszczynski, M. J., Abraham, T. L., Alberts, J. J., Kulanthaivel, P., Jackson, K. A.,
Chow, K. H., ... & Barbuch, R. J. (2013). Pharmacokinetics, metabolism, and excretion of the
GSK-3 inhibitor LY2090314 in rats, dogs, and humans: a case study in rapid clearance by
extensive metabolism with low circulating metabolite exposures. Drug Metabolism and
Disposition, dmd-112.
Ismail, T., & Powell, P. (2016). GSK in Africa: An Inclusive Strategy Case Study for Low-
Income Market Segments. In Inclusive Innovation for Sustainable Development (pp. 129-147).
PalgrBussel, J. B., Wang, X., Lopez, A., & Eisen, M. (2016). A case study of remission in adults
with immune thrombocytopenia following cessation of treatment with the thrombopoietin
mimetic romiplostim. Hematology, 21(4), 257-262.ave Macmillan UK.

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