Expository Essay on Protecting Intellectual Property in China

Introduction

China was made accountable for almost 80% of all the intellectual property theft from organizations that are headquartered in the U.S.A. The theft of IP in China has led to the increase of counterfeited goods such as aircraft parts, pharmaceuticals, automotive and it results in loss of profit for the international organizations. Organizations are advised to develop IP protection strategies to safeguard their organization's secrets and culture.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Leakage of IP occurs through transfers of employees or where multinational foreign corporations share practices with their supply chain partners. Protecting an organization's IP is a big challenge for the managers, and it is influenced by the global market, state, and socio-cultural factors (Schotter, & Teagarden, 2014).. The role of the state is where China aims to be the leading country in technology by 2050. Since it has a weak innovative capacity, they rely heavily on co-innovation and re-innovation through imitating imported technologies.

The global market role is that they imitate proven development secrets of high-tech gadgets from foreign industries due to a low chance of getting punished and is the most moderate risk strategy for the Chinese organizations. Social-cultural factors include the memorization and bias of their exact copies in their education system. Another reason is, there are a high rate of employee turnover especially the well-educated engineers and middle managers.

An organization can protect its IP through creating a protection web. The web consists of externally focused defensive practices that include:

Developing a strategic clarity

Collecting business intelligence

Following legal fundamentals

Creating interest alignments

The internal practices include;

Disaggregate processes

Implement a control discipline

Create dynamism

Manage human resources strategically

Engaging in focused corporate social responsibility activities

Managing Corporate Crisis in China: Sentiment, Reason, and Law

Over the past decade, the Chinese market industry has risen steadily. It is during this period that there has been an increase in scandals and crisis for the international companies operating in China. National media companies have tried to criticize why foreign companies are being attacked. However, the attacks have been linked to political and local motives. The purpose of the article is therefore to educate managers from the international organizations to efficiently understand and deal effectively with the socio-cultural and institutional environments that are the root course of the increasing number of scandals and crises.

For the foreign organizations to manage corporate scandals and crises in China, they need to have a clear and precise understanding of the exceptional environment of the Chinese institution. This can be done by understanding the three ancient principles from Chinese history of how lawsuits and disputes are resolved and handled. These three principals include:

Sentiment: which refers to the feelings of individuals

Reason: means being rational and reasonable

Law: policies and regulations.

Managers can be better prepared to control and eradicate a crisis if they learn ways of managing the three principals (Yang & Jiang, 2015). This can be done by nurturing,accumulating, and leveraging organizational capital that has been built on strong business, governmental, and professional ties. They can also effectively use social media to understand their customers and their issues fully, maintain an insubstantial balance between the three principals, and exert influence on the appropriate stakeholders. This is done to control and prevent the corporate crisis in an effective, timely, and culturally acceptable manner.

GlaxoSmithKline in China (A)

Why have four GSK employees been detained on suspicion of bribery?

Four employees from GSK had been detained for the suspicions of bribery because the Chinese police had raided the organization to seize documents and later accused the four individuals of bribing government officials, physicians, and hospital administrators to increase the sales of the company's pharmaceuticals. The police also found out that they allegedly used middlemen and a network of 700 travel agents to supply the government workers, doctors, and hospital staff with sexual favors and bribe money. The suspects were detained as the authorities were gathering more evidence to charge them with and later revealed that they had paid more than $450 million in bribes since 2007 to the Chinese healthcare practitioners.

Has GSK been treated unfairly?

The organization received a fair judgment of the law. The treatment was appropriate because the company through its employees has participated in fraudulent activities. Bribing to achieve a competitive advantage over others is against business ethics. GSK had participated in bribes and corruption for a long time according to reports. Secondly, the organization participating in fraudulent activities destroys the organization image and reputation. This is despite the fact that the organization claims to have zero tolerance for corruption. The organization violated the US Foreign Corrupt Practices Act.

Assess GSK's response so far

In response to the allegations at hand, GSK was disappointed in its employees for violating their code of conduct. Consequently, the organization agreed to cut off the existing ties with the employees together with all the organizations associated with the case such as the travel agencies. In their response, they also revealed how much they obey the rules and regulations of China and want their employees to abide by them. To ease the pain of the scandal to the people, the organization decided to reduce the prices of their products to make it affordable to the people (Quelch & Rodriguez, 2013).

References

QUELCH, J. A., & RODRIGUEZ, M. L. (2013). GlaxoSmithKline in China (A).

Schotter, A., & Teagarden, M. (2014). Protecting intellectual property in China. MIT Sloan Management Review, 55(4), 41.

Yang, Z., & Jiang, L. A. (2015). Managing corporate crisis in China: Sentiment, reason, and law. Business Horizons, 58(2), 193-201.