Managing Business Ethics In China-lessons Learned From The Sanlu Milk Company's Scandal

It is generally accepted that the scandal of SanLu Milk Company significantly produced bad affection to the society in China. My report focuses on the scandal of SanLu Milk Company. The aim and objective is to investigate the reasons why the scandal of SanLu Milk Company happened in order to reflect the issues of business ethical management in Chinese companies.I quoted and learned from a substantive literature review, which provides relevant theories, concepts and modes of business ethical management to support my research. For example, the stakeholder theory, the concept of corporate social responsibilities and ethical culture of organization.In order to collect data about the scandal of SanLu Milk Company, I choose three main research methods which include questionnaire, interview and document review to obtain the reliability and useful data.Based on collecting data through three methods, I analyze and summarize the six reasons why the scandal of SanLu Milk Company happened. Three direct reasons are explained by the internal issues of ethical management in SanLu Milk Company. Three indirect reasons are analyzed by the external environment of ethical management in China. These six reasons are listed below. Three direct reasons The first direct reason is that SanLu Milk Company lacked the corporate social responsibilities for the stakeholders. The second direct reason is that the behaviors of different stakeholders contributed to the scandal of SanLu Milk Company happened. The third direct reason is the issues of ethical culture in SanLu Milk Company. Three indirect reasons The first indirect reason is the issues of Chinese economic system. The second indirect reason is the issues of policies and laws of food in China The third indirect reason is the issues of ethical culture in China.The recommendations for other companies are mentioned in the following. Six recommendations depend on the three direct reasons and three indirect reasons, for example, enhancing the corporate social responsibilities, fostering the ethical culture, overcoming the negative factors of market economy in China, modifying the limitations of food policies in China.