Everybody Else Does It

By Pete Brunoehler

By Pete Brunoehler

It can be a sensitive subject, but the degree to which business is conducted in an above-board and transparent fashion in Malaysia varies widely. However, raising awareness and standards in this area can be part of your legacy, and should ensure that your local organization respects ethical business practices in the manner that your corporate organization expects.

My business career has encircled Malaysia, having worked in the US, Hong Kong, and Singapore before and after several stints working here. As such, I have spent about one-third of my professional life in management positions responsible for the Malaysian market. However, despite that relatively small fraction, over the course of employment here with three companies in various industries, I have had more requests to “help” close a deal here – in ways which were clearly unethical and unacceptable – than in all my years in all of those other countries combined. As an expat manager in Malaysia, you may face challenges that you’ve quite possibly not faced elsewhere.

Here are just two of the scenarios I have encountered here: In the first, I had a Sales Rep asking for approval to “inflate” an invoice followed with a credit note. It works like this: The customer is invoiced at an amount with no or very little discount, as agreed between Sales Rep and purchaser. Then later, the Sales Rep/ Supplier sends a credit note directly to this purchaser, in the form of cash or cheque.

In other words, the purchaser “officially” agreed to order at the higher price, on behalf of his company, apparently obtaining whatever internal approvals were needed. His company willingly paid that price to the supplier. However, once the above was executed, the purchaser pocketed the credit note difference. That’s how the Rep secured the order. The argument made to me: “Nobody gets hurt, everybody else does it, and we get more business. We would have agreed to the lower price anyway. And the customer’s company approved the PO at the higher price, so they have no issue with it.” In the second instance, I had a Sales Rep asking to sell a controlled product requiring a user license to a customer who did not have that license. (Licenses were not easy to obtain.) It works like this: The controlled product is sold to a “nonlicensee” using the license of a proper licensee (as a supplier we had a master list of license holders and copies of proper licenses). Then anyone reviewing the transaction sees that the controlled product being sold is in fact accompanied by a license to purchase that product. The argument made to me: “Why not? Everybody is happy, we get the sales, the (unlicensed) user wants and gets to use our products. No one will ever know the difference. And besides, the competitors all do it! Nobody else has a problem with it.”

Key takeaways:

  1. You, too, may be naïve; I now know I was. I am certainly not laying claim to sainthood, but prior to coming to Malaysia, I had never been exposed to practices such as the two mentioned, despite having worked for many years in other countries in these industries.

  2. You will be told that “All of our competitors do it!” This is likely to be at least partially true. Unfortunately, despite generally having higher global standards, even the local offices of MNCs may well engage in these unethical practices if their local leadership has accepted the argument that “everybody else does it.” And the probability of a local company doing so is even higher.

  3. My experience and approach has been to make my overall stance as public as possible, but to hold discussions about individuals’ actions behind closed doors.

  4. Your team (members of which are generally proud to work for an MNC) should understand that you represent a reputable international company needing to conduct business worldwide with the same level of ethics as back home in the HQ. This is the point to be drilled repeatedly. Working for a reputable MNC should include benefits such as attractive compensation, training, career opportunities, and overseas postings, but in return, staff must uphold and exhibit the ethical standards the MNC expects

In conclusion, the best leadership example is to start early and state repeatedly what is and is not acceptable in your company when it comes to business ethics. Ensure that your team understands violating ethical standards constitutes corruption, and that there is no gray area here in these discussions. While local perceptions may be genuinely different, there can only be one standard in a global organisation.