Business case analysis and applications

Business Case Analysis

The Celtel Corporation has operated under strictly plain rules of doing 'clean business'; however, the choice of operating in African states was bound to pose a problem in their business dealings sooner or later when the widespread corruption in the region would catch up in a way that the co-founders, Terry Rhodes and Mo Ibrahim, would not be able to weave around and overcome. Initiating a mobile network license in the region of New Guinea was the pinnacle, thus, that posed the most financially devastating crux for the company (Karim et al., 2009).

While on prior occasions, Rhodes and Ibrahim had managed to find ways where bribery could be clearly avoided, the New Guinea government clearly would not let the company expand their offices in the region without it. Sir Alan Rudge, who had taken over as CEO from Ibrahim, was new to the intensity of the situation and faced this as the toughest challenge at the very beginning of his service as CEO of Celtel. There are three clear options for Celtel to adopt under the current circumstances as recognized by Rhodes: one, paying the bribes to the New Guinea government; two, blowing the whistle on the corrupted affair of the New Guinea Government in the media and the global community; and three, walking away from doing business in the region. It was not an easy situation for a young company to be in as they had made too huge an investment for attaining the license, $750,000, and now could not back out without triggering a chain reaction that could lead to bankruptcy (Karim et al., 2009).

The first option of would paying the bribes to the New Guinea government ensure that the company will be able to launch its operations in the country soon. The company had invested $750,000 to attain the license in the region; hence paying the bribes amounting to $50,000 would not amount to much and could be reimbursed by the anticipated profits of the company. However, this line of action would seriously taint the company's profile of conducting a 'clean business'. Simultaneously, there is no guarantee that the bribes would stop there and the Guinean government will not look to take more bribes in the future (Karim et al., 2009).

The second option of exposing the Guinean government on a global scale was far too risky considering that the corruption in the entire region of Africa was not news to anyone and that it was merely frowned upon globally. Furthermore, it could spoil the relations with other states in the neighboring regions. However, exposing the Guinean government using local networks and local businesses in order to create just the amount of pressure needed could work for Celtel. Once the pressure from local or national media was created, Celtel could try and negotiate terms with the government so that they could find a roundabout way of working in the region without paying the bribes yet, simultaneously satisfying the government with substantial fiscal investment in the region outside of Celtel's business. However, there is no guarantee of this situation working out and there will need to be research done on the influence that the government might have on local/national media and businesses in order to even consider this option. One example to learn from could be the Nigeria Oil War where the local groups were choosing to fight against the tyranny of the government. If Celtel could find such alliances in the region of New Guinea, they could expose the government thereof without really taking any heat onto the company, and, inadvertently ridding the region of some level of corruption in the short run. Again, the application of this option would not only need to be thoroughly researched but it would have to be planned and executed extremely carefully so that it does not backfire.