Kitchen Best

Kitchen Best, a Hong Kong based SME, has grown rapidly and is now a significant player in the manufacturing and distribution of small kitchen appliances (rice cookers, pressure cookers and electric water dispensers). Its manufacturing operations are across the border in southern mainland China. The owner/founder is stepping back from the day-to-day management of the operations and has now brought in his US university-trained (MBA) son to be the CEO; the new CEO has an ambitious goal of doubling sales in four years and selling their products more globally. Key managers are based in mainland China.

There have been a series of incidents and challenges (Shago, Haus de Metro, and Honghua) relating to corruption, bribery, family bias/preference and other unethical practices that the new CEO has to now deal with in order to restore Kitchen Best’s business reputation and competitive advantage. Complicating this even further is the reality that Kitchen Best is now operating in multiple jurisdictions that expose itself to different legal laws (and varying levels of enforcement), business ethics/practice, culture, societal norms and values. Finally, the corporate culture of Kitchen Best is that of a” big family” as it has been run paternalistically; it has little in terms of Internal Control systems and has very questionable levels of Management Integrity.

2. Who are the key players involved in the case?

Individuals at Kitchen Best:

- Chan Dong-hwa: Founder and Chairman (“treat my employees like family”)

- Li Qingyang: Silent 25% Equity Partner (85, aunt of Li Meihua and grandmother to Horatio Sze)

- Henry Chan: CEO (son of Founder, MBA from US university)

- Ma Luk: Operations Director and Head of Greater