Employee Probity and Security
Lack of employee probity in western companies based in China is rife and the costs involved can run into millions of dollars. Typical examples of lack of employee probity include:
- Procurement Managers typically will add on 5-10% onto the price of goods and services rendered to close the deal. The 5-10% is paid in cash under the table to the Procurement Manager / Officer by the selling company. This practice can even be found where one western company is selling to another in China. An example is a US tooling manufacturer who were selling to a US EMS company based in Shenzhen at a premium of RMB100 / tool, the benefits of which were going straight into the pocket of The vice General Manager
- Financial Managers will typically charge 2-5% to facilitate payment of accounts outstanding. An example of this was in a Chinese manufacturing company where the Finance Manager required 5% in cash under the table to make the final payment on a construction project provided by a Chinese supplier.
- Scrap materials are frequently given away or sold at ~30% of the real market value. Managers involved will receive cash under the table to keep quiet. An example is a US EMS company in Shenzhen where scrap was given away to the scrap dealer, in return 4 senior managers were given monthly under the table payments in cash of a significant value.
- Service providers such as transport, canteen, cleaning and security will frequently pay 15% to the General Manager on a monthly basis to ensure continuous business an example was a German manufacturer where service providers were required to give 12.5% of their charges to the Managing Director.
Dr. Rose is an expatriate General Manager with 15 years working experience in China. Through combating lack of employee probity in the various appointments that he has held he has become a sought after expert on discovering and rooting out such lacks.
In a manner of speaking he knows exactly which stones to turn over to find the worms. Dr. Rose speaks fluent Mandarin and has a working knowledge of the nuances of doing business in China. Dr. Rose has led employee probity investigations in a number of western companies established in China.
These include Chinese manufacturing company, a US EMS company in Shenzhen and a German component manufacturer. Investigations have led to disciplinary action against a number of senior managers and in one case the dismissal of the Managing Director.