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Kellog brown & root in nigeria corruption case

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Kellogg Brown & Root in Nigeria Corruption Case The firm Halliburton acquired Dresser Industries in the year of 1998. Among Dresser’s businesses was M. W. Kellog, which was combined with an existing Halliburton business and renamed Kellog Brown and Root. By that time, Kellog was expecting to build a series of liquefied natural gas in Nigeria, but in order to do that it was required to win an initial contract form the Nigerian Government.

At the beginning everything was going according to plans, however; when the consortium was deep in final negotiations, the Nigeria’s oil minister was removed from his charge and replaced. So, not taking any risks, Kellog decided to hire to the British lawyer Tesler, in order to secure the contracts; the main reason why Kellog took that decision was because Tesler succeed in a similar previous situation in Nigeria years before. However, the payment given to Tesler was far out of proportion to the services he provided. In the end, it was revealed that this was only a cover, and that the real reason why so much money was given to Tesler, was that he had to use part of that money in order to bribe to the General Abacha, some governmental officers and executives from the consortium.

Unfortenly, this strategy was repeated over and over. In the end, Tesler was paid with $132. 3 million of dollars by the consortium for wining all the contracts in Nigeria since the year of 1999 until 2004. After all this finally came out in June 2004, Halliburton fired Jack Stanley and cut its relationship with Tesler; however, this was not enough to dismiss the rumors and troubles, so finally in the 2005 Halliburton decided to put KBR up for sale.

Al l this he did with the help of corruption, which is why this case was great scandal. In general this speaks about corruption that is lived in Nigeria and the ease of making contracts as long as one has money Personal Group Analysis of Kellogg Brown Case 1. The key issue is that the payments were not legal since were used in order to secure and accelerate the process of granting contracts which clearly demonstrates that an ethical issue arise due to the fact that which was illegal in one country was not in the host country. 2.

Evidently the ones in charge of the highest positions in the company completely forgot the organization`s mission and vision, and instead they ecided to use his power in order to benefit themselves. So it is not difficult to think that most of the top executive charges of the company were taken by corrupt individuals, thus, the decision making process is based on unethical principles that did not seek for the good of the organization but for the good of the individuals. 3.? If the only way to secure the contracts with the government was with bribes, then of course that the Company should had abandoned the project, because it was much more greater the risk of that plan than the benefit. Maybe the gains were high, but an incident like this can easily determine the end of a Company. Alternative Options to produce a positive outcome to Kellogg Case ? The corporation should have implemented an ethical code immediately, where it specified the rules to follow and the consequences to commit corruption.

Indeed, if the company had frequently sent auditors and investigators to the area, maybe all this situation could had been prevented. Since the ones responsible for the incident were already in their charge even before that Halliburton owned Kellog unit, only they must be found guilty and be fired of his charge; however, the Corporation must demonstrate that those actions were not allowed by the organization itself, and were completely planned only by those individuals. Also, Is difficult for Kellog Company to have prevent this corruption act because, the head of the company was a corrupt person and had the power to let this go on. Secondly, the decision of performing a new plant in a country which is known by its corrupt government was the base point of this illegal act. This was a secret cycle of corruption in which involved these particular men only and not the whole company but yet, this cost the whole company its reputation. So, I think that Hamlliburton did the right thing to investigate the process they where having and find out what was really happening with Nigeria, Tesler and Stanley.

This incident might have low profits to Kellogs and Halliburton so I think that making notice to all the people in both countries will help them to sustain themselves and start again. And show that the culpability was for those corrupt persons only. Finally, we think that corruption in Nigeria is presented on a large scale because the government allows it, so this case involves a very important and outrageous government and its leaders. And the company in question, we think that this had to have chosen a better his legal representative in Nigeria for the construction of the plants (they were a part of the blame) Conclusion As a conclusion we can see that any unethical work is forgotten. We can see that the company was started to be investigated even thought the past contract was legal.

Unethical actions take people to lost the confidence in a company or on a person. Confidence is a very important value for any company because people buy their products and when confidence is lost it is harder for the company to reestablish again. As we can see this company is being investigated and this may mean that many contracts would not be concluded. Ethics are important because as a company you have to gain the respect of the customers. I think that the best way for the company to solve this case is to fire the people that made this unethical action, and also this people have to make a public apologize.

This way the company will be free of gossips about the unethical behavior of people. Indeed, this case taught us that you have to be careful who you hire to make such an important process for a company. They may be recognized for its successful work but yet, they might have illegal acts that may harm the reputation of your company. Then definitely we will be selective with our future foreign business and where to place them. We will prefer a country which government was not known for corruption nor illegal acts and make the process of contracting as the rules states.

We know it may be tempting for some managers to facilitate thing and speed them up but, this only gives them at the long term negative results and is better not to risk themselves with this unethical acts and follow the laws.

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