Link: http://en.ce.cn/National/Local/201309/03/t20130903_1322288.shtml
– “the parent company had assigned annual growth goals as high as 25 percent in recent years, 7 to 8 percentage points more than the average growth rate of the industry.”
– If the parent company was able to make such an assigned goal, then they must have an advantage that the other firms within the industry doesn’t. Apprenently, it was by bribing the doctors to issue their own drugs.
– It is quite obvious that it’s an illegal move in order to compete with-in the industry.
1) It violated tax laws, since the money used to bribe wasn’t being taxed.
2) Doctor’s “income” tax wasn’t taxed either.
3) There are general laws that prohibits this kind of behaviour as government encourage a fair competition environment in order to encourage entreprenuers to start a new business. The ultimate goal is to have more firms entering the market, not only that govennment may earn more tax income, but also for the benefit of the consumers as more firms mean high competition, hence lower price.
– They enforced a salary scheme that forces salesman to reach an assignered amount of sales in-order to recieve their negotiated salary, if under-target, they’d recieved a penalty on their salary.
– The threat acted as an “motive” for people to break the law.