Kitchen Best Case Study

Kitchen Best is a home electrical appliances company was founded by Chan Dong-hwa in 1985. Company’s office located in Hong Kong and factory is in Foshan, China. Chan Dong-hwa use paternalistic style to run his business. He personally supervised all aspects of the business and control all management and business decisions. In 2008, Mr. Chan’s son Henry Chan became Kitchen Best CEO. His management style is different with his father. He not supervised all aspects of the business and relied his senior management. Henry spent most of time at marketing area. In 2009, Shago incident happened that Mr. Sze, company’s Purchasing and Production manager, bought a product that didn’t match the contract with his brother-in-law. Quality Control Manager Ms Wei chose to be silent because Mr. Sze is Li Qingyang’s grandson. Li Qingyang is one of Kitchen Best shareholders. Another bad thing happened after Shago incident. Keemark, a testing service, didn’t report Qinghua’s violations to Kitchen Best because the team leader of Keemark got money from Qinghua. In May 2010, Henry found out that Mr. Ma who oversees the factory operations and manage company’s China and Macao accounts, had inflated her expenses to get more benefit for herself. Henry did nothing for this because he thinks that is business rule in China.

Main Challenges

Bribery- “Bribery is the act of giving or receiving something of value in exchange for some kind of influence or action in return.” (Wikipedia) Bribery is very harmful to a business. Driven by interests, employees may act in harm to the interests of company. In Kitchen Best case, Mr Sze got a free tour from his brother-in-law as a reward for bought defective microwavable tableware from his brother-in-law. Kitchen Best’s contractor Qinghua bribed the team leader of testing agency to ensure that their unqualified products pass the test. Mr Chan Dong-hwa give money to Mr Lau’s personal account.