A lot of experienced expat managers of late have been telling me kick-back stories. I don’t know if the incidence of corruption in China operations is on the increase, or if the stories just make for good entertainment. Chinese managers – usually in purchasing and HR – are usually the culprits. One Chinese purchasing manager at an American company had asked a local European company for a commission to get a project. The European GM called the American GM and told him of the incident. The American enterprise promptly fired the purchasing manager. An internal auditor from the home office told me he had come to China for a month to see how systemic the corruption was in the American company. Another company saw the purchasing manager rake in such a mother-lode of kick-backs that he owned two houses in Greater Shanghai, and two in Beijing. Even if the company catches him with his hand in the till and fires him, he still gets to keep the houses.

In another instance, a Western team of experienced expats was sent into a Western company to investigate corruption. Team members began receiving death threats about their intrusion into the inner workings of the company. One of the group simply quit: someone cheating the system simply was not worth his life.