Question

It’s All in the Family

What company wouldn’t want a “leg up” in obtaining contracts for lucrative new business? Seeking to gain an advantage in the competitive world of investment banking led J.P. Morgan Chase & Company officials to seek out and hire the children of prominent Chinese officials. The individuals hired may have had the knowledge or skills needed to fulfill the jobs for which they were hired. But their most valuable qualification was something in their genes—being related to an influential member of the political or business elite in China. Having a connection to someone with decision-making authority to grant business opportunities to J.P. Morgan might have been the distinct factor that resulted in them getting the job.

The purposeful targeting of well-connected sons and daughters with the express purpose of driving business contracts might be considered bribery under federal law. The U.S. Justice Department has launched an investigation to determine if these hiring decisions violate the Foreign Corrupt Practices Act. In fact, the chief executive of J.P. Morgan’s China operations has voluntarily resigned. J.P. Morgan isn’t alone in using such a practice. Citigroup, Goldman Sachs, Morgan Stanley, UBS, and others are also said to have done so.

Company executives at J.P. Morgan were aware of the program as well as broad anticorruption measures several years before the Securities and Exchange Commission began its investigation. Claiming that this preferential hiring is “the norm of business” in China, J.P. Morgan’s top leaders believe they acted according to accepted standards. J.P. Morgan’s business acquisition in China did indeed improve after it launched the selective hiring program.

The bank developed a spreadsheet detailing potential recruits along with their “valued” connections or business-enhancing prospects. They also created a special internship to accommodate some applicants who were screened less stringently than other job applicants. So, the candidates were given particular attention and a smooth path to employment. Government officials aren’t stating that the employees are not qualified. They are more interested in the reason each was selected from the applicant pool. A finding that any of the banks involved intentionally hired the sons and daughters to win business might result in bribery charges.

The banks are scrutinizing their hiring practices as they respond to the government investigators’ inquiries. This practice highlights differences in cultures, norms, and laws among nations. What might be considered an expected and completely acceptable practice in China might be deemed illegal—or at very least, unethical—in the United States.

J.P. Morgan Chase & Company wanted to hire the children of prominent Chinese officials. Considering legal and ethical standards for hiring in the United States, which of the following questions would be most appropriate for an interviewer in the United States to ask during a structured interview to explore an applicant's family connections?

a. Does anyone in your family work for the Chinese government?

b. Are your parents politicians in China?

c. Do you have any experience working with the Chinese government?

d. Are you from China?

Which of the following selection factors for global employees did J.P. Morgan Chase & Company consider when hiring personnel with political connections in China?

a. Cultural adjustment

b. Communication skills

c. Personal characteristics

d. Personal/family concerns

Which of the following steps in the hiring process would most likely reveal an applicant's family political connections to J.P. Morgan Chase & Company?

a. Test

b. Background investigation

c. Interview

d. Application form

Answer 1

Q1. C) Do you have any experience working with the Chinese government?

Option C is more like a generic close-ended question which asks about the candidates previous work experience. All the other questions are personal which is up to the candidate to mention in an interview. Also questions other than option C should not be asked in an employment interview.

Q2. D) Personal/family concerns

J.P. Morgan Chase & Company hired candidates with family members who were prominent Chinese Official for the purpose of driving business contracts and personal/family concerns are selection factors for global employees that J.P. Morgan Chase & Company considered when hiring personnel with political connections in China.

Q3. B) Background investigation

Candidates do not always reveal their background during an interview hence background investigation is the best step reveal an applicant's family political connections to J.P. Morgan Chase & Company.