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Ziqitza Health Care Limited: Responding to Corruption

30 June 2013 | Cases | Development

Case Abstract

Ziqitza Health Care Limited (ZHL) is an Emergency Medical Services company founded by five social entrepreneurs in India in 2002, which by 2012 operated 860 ambulances across five states. The case is focused on bribery, a problem in many parts of the world, but especially in India. It is highly topical given recent anti-corruption protests in India. It is also unusual (if not unique) because it was developed with the company’s participation (a taboo subject, bribery cases are typically “arm-chaired” or based on secondary sources). It provides not only a rich description as a basis for discussion of this difficult managerial issue—including how such solicitations typically arise—but also highlights the opportunities for organizations looking to respond appropriately and effectively to bribery requests.
The story is told from the point of view of CEO and co-founder Sweta Mangal, who must decide how to respond to a government official who demands that ZHL bribe him to release payment for ambulance services it has rendered. She is confronted by a new employee, arguing that the bribe is necessary to make payroll and maintain its ambulances. Given the liquidity crisis at ZHL caused by the payment delay, the only alternative is to take out a loan at a high rate of interest, which will eat into profits and may not be financially sustainable long-term.
ZHL’s founders embrace Gandhi’s philosophy: “Be the change you wish to see in the world.” They have pledged to operate with complete transparency and never pay bribes in business transactions. As Mangal explains to the employee, their commitment to these principles is absolute – part of ZHL’s DNA. Students can debate whether Mangal’s determination not to pay is the right decision as well as discuss how best it can be implemented. Some will argue that ZHL should make the payment – and could potentially save more lives by so doing.
The case offers context: India ranks 95th on Transparency International’s Corruption Perceptions Index. Bribery is commonplace, viewed as an expected cost of doing business. Refusing to bribe the official is a daunting proposition, particularly if done publicly. That said, ZHL has not only grown rapidly but has attracted the Acumen Fund, an “ethical” investor from abroad. Moreover, Indian society appears to be evolving, spawning an anti-corruption movement. These key contextual factors inform the arguments for and against ZHL’s ethical business philosophy.

Authors: N.Craig Smith and Robert J. Crawford
Institution: INSEAD, France
Competition Year 2013
Place 3rd place
Track Social Entrepreneurship
Key Words Bribery; Corruption; Social Entrepreneurship; Social Enterprise; India
Courses Managing the Social Enterprise; Social Entrepreneurship; Business Ethics
Target Audience MBAs; Executives; Undergraduate (Upper Level) Business Students
Permission Rights This case (including a teaching note) is available for purchase from the Case Centre
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