Manual for Azerbaijan companies Rena Safaralieva


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The questions below are designed to assess  your understanding of the material.  



What rights are customers entitled to? 


Please describe the obligations of businesses to customers? 


What are obligations of customers to businesses?  





Please read the cases below and chose your answer from the options provided. Please substantiate your 

answer. The notes to cases  can be found at the end of the book.  


1. You run a Kodak shop and a female customer wants to hire a video operator with a camera to videotape 

a wedding tomorrow night. You understand this is very short notice and that your two best cameramen 

already have an assignment. The only person you can spare is an apprentice. You know he would do the 

job very well, but the customer wishes to have a professionally made tape. Do you:  




Take the order?  



Frankly tell the client of your problem and allow her to make a decision on her own? 



Tell her to go elsewhere?  



Take the order and frantically start calling your competitors to see if they can spare a good 




Anything else?  


2. You own a small business and you need a loan for further company development. You are sure that the 

credit will allow your business to become more efficient because you plan to establish a network of new 

services that your competitors have not yet dreamt of. Thanks to this innovation, you will outsmart all 

your competitors. You have a designed a business plan and submitted it to a conventional bank X. A bank 

clerk promises to respond very soon. Some time later you receive a notification from a bank that the loan 

will be extended. However, you have a vague suspicion that your competitor has just started to render 

such a service.  




What unethical problems do you see here?  



How could your competitor have got this information?  



If the information leaked through a bank clerk, how ethical is his act? Please justify your opinion.  


3. You are a department head in a consulting firm. You have just finished some marketing research for 

one of your most valuable customers – Trade Co. One evening, you are alone in the office late in the 

evening. A woman calls you and introduces herself as vice-president of Trade Co. She asks you to 

immediately fax her the resume of your research. You locate the material requested and see that it is 

classified “For internal use only”. The Vice President you report to is on his honey-moon and you would 

not dare bother the company President to authorize release of materials.  




How ethical is the request of the Trade Co. vice president?  



What shall you do?  



What facts should you take into account or what questions should you ask the caller before 

making a decision?  


4. You run a small beauty parlor and your customers usually book their appointments in advance. A client 

was booked for a haircut for 4 o'clock and another one for 4.30. The first client decided on the spot to 

have her hair dyed as well. The second client is already waiting. Shall you:  




Suggest the first client to book for some other time?  



Tell the hair master to blend the color and dye the first client yourself despite the fact that you are 

the owner and manager and this is really not your job? 



Make the second client wait?  



Suggest that the second client wait and offer her a face mask free of charge?  



Anything else?  



Rena Safaralieva  




Unfair competition 


Competition constitutes the backbone of market economy. However, a market can function efficiently  

and  benefit consumers only in the  environment of  a legal, fair and free competition. Fair competition 

requires that all players - the state, the business as a whole and individuals follow certain rules.  


Looking for a rare sample of more or less fair competition in Azerbaijan, one might consider the 

numerous small cafes and snack bars, which offer delicious food and cozy ambience for a modest price 

as the result of tough competition. We would abstain from qualifying competition in this sector as 

absolutely fair, as owners of these enterprises had different starting points: some earned their starting 

capital, some inherited it, while yet others stole or took bribes. Still, competition in this sector is really 

fair, as no powerful pressure from the outside can force a customer to chose a place to eat. This is the 

most reasonable explanation why the number of cafes and places for public festivities in Baku are 

extremely abundant.  


The most frequently used methods of unfair competition in a developed market economy are as follows:  


enticing of key employees of competing firms;  


gathering of confidential information on competitors;  


dumping policies or charging below production cost;  


industrial espionage; 


subversive activity at competitor’s production facilities; 


information wars or use of negative PR methods in media.  


Our market, which is, to be frank, very far from civilized, does not resort to such intricate methods, 

except for negative PR. The main instrument of unfair competition in our market is corruption, especially, 

its following forms.  


Subornation of high rank officials is a quite common method. . According to some sources, “a 

shapka” or “kickback” to award a tender for public procurement might constitute up to 30-40% of the 

project cost.


 Even high ranking public officials are forced to recognize that “we do have such public 

officials, who impede healthy business in Azerbaijan for their own mercenary interests. They put 

obstacles in the way of both foreign and local investors”. 




Pressure from above in  a decision-making process is another common technique  for example, 

during the awarding of tenders.  The Japanese Bank of Reconstruction and Development officially 

refused to recognize Sumitomo, a Japanese company, as the winner of a tender for construction of the 

gas pipeline Karadag – Severnaya hydro-power station. It should be recalled that the Bank financed 

construction of the pipeline in Azerbaijan. The tender was participated in by four Japanese companies 

and some media sources wrote of the unscrupulous conduct of Sumitomo and its informal agreements 

with Azerbaijan  public officials. 




Patronage of certain industries by individual public officials or their direct involvement in economic 

activities  is very often accompanied by abuse of public resources.  



 R.Gajiev. Corruption and Economy, edited by S.Bagirov, Publication of Transparency Azerbaijan, Baku, 2002, p. 69 



 X.Ismailova, One of the Major Problems – Abuse of Power by Public Officials, interview with Mahmud Mamedguliev, 

Deputy Minister of Foreign Affairs, 6 August, 2001, 


 S.Sultan oglu, Japanese Bank Said “No” to Corruption in Azerbaijan, Zerkalo newspaper, Banks and Business column, 15 

September, 2001  

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