Should Enterprise Investors pay for quick installation? 3. Alpha Media in Budapest, 1994 Eighteen months after committing US $30 million to a Hungarian printing plant, the Alpha Media Group (AMG) was targeted for an audit by the Hungarian tax authority. The audit, which was supposed to last only two weeks, dragged on for six months. Tax auditors demanded all internal accounting documents produced over the last five years and returned each week asking for new, and apparently arbitrary, analyses. The firm had been assessed more than 100 compliance fines, which typically amounted to several hundred dollars.

Four months into the audit, the local tax inspector visited AMGs president and declared that the problem lay with the firms accounting staff. The inspector concluded that the staff was beyond hope, and he saw no end in sight to the audit. He did, however, offer a suggestion. He knew a brilliant, hardworking local accountant who could straighten out the firms books. This would take a few months and would cost approximately US $45,000. Because the tax auditors were familiar with the accountants work, they would feel less need to perform detailed investigations of the firms books. Should Alpha Media hire the consultant? 4. Gulf Oil in Korea, 1966

In the mid-1960s, Gulf Oil Corporation undertook a US $200 million direct investment program in the Republic of Korea. When the program was nearly completed, the ruling political party approached Gulf for a US $1 million contribution to finance its election campaign. The request was accompanied by pressure which left little to the imagination. The contribution was made and The incumbent party won reelection. When the ruling party geared up for the next general election in 1970, a leader of the incumbent party approached Gulf for another campaign contribution. S.K. Kim, the party representative, suggested that US $10 million would be an appropriate contribution.23 Should Gulf Oil make the contribution? 5 This document is authorized for use only by Todd Motto in 2021. For the exclusive use of T. Motto, 2021. 701-128

Corruption in International Business (A) 5. Saybolt International, 1995 Saybolt International was a Netherlands-based firm in the petroleum and gasoline testing industry. The firm was the leader in the critical Panama market, where it confirmed purity and octane levels as ships passed through the Panama Canal. Although Saybolt enjoyed a dominant market position in Panama, company management was worried that it had no long-term lease for its laboratory facility and, thus, could be evicted at any time.