ARTICLE SUMMARY: Four executives of Australian mining company Rio Tinto were arrested by the Chinese government and charged with bribery and corporate espionage. Chinese government officials claim the actions of the arrested gave Rio Tinto an unfair advantage in negotiating prices for the sale of iron ore. The case is causing many firms to rethink how they conduct business in China.

QUESTIONS:

1. In what ways might Rio Tinto representatives be guilty of corruption?
2. Considering Rio Tinto, what does this say about the political risks that come with doing business in a foreign country? What is the best way to minimize these risks?
3. Thinking back, how does the Rio Tinto case underscore the cultural issues in ethical behavior?

SOURCE: J. T. Areddy, S. Canaves, & S. Oster, “Rio Tinto Arrests Throw Firms Off Balance,” Wall Street Journal (Retrievable online at http://online.wsj.com/article/SB125007379426225373.html?mod=crnews; for additional reference, see http://blogs.wsj.com/deals/2009/08/14/in-rio-tinto-bribery-case-china-says-the-enemy-is-us/)