Bribery Scandal
Case Summary
This case covers the scandal at Siemens AG in 2006, 2007 which consisted of employees bribing foreign officials. Siemens employees made slush funds specifically for the purpose of gaining an unfair advantage to win contracts. They also were accused of bribing officials of the labor board in return they would give support for Siemen’s policies. Siemens office in Germany was raided and an official investigation was started. In other countries they were investigated subsequently following the raid in Germany. The CEO resigned regardless of not being found responsible though the scandal was under his watch.

This scandal set off a chain reaction to questioning the other companies in competition and the laws in Germany made to deter this behavior. Labor representatives who had been possibly bribed held the board, which governed the laws. This created an element of people responsible of making sure this type of thing did not happen, by letting it happen for personal gain. All along critics of this type of management feared this to be a potential issue. This shed light upon the challenges that the new management would encounter after the scandal occurred.
In your opinion, is “bribing” unethical & illegal or just a cost of doing business? Discuss this in light of Siemens’ bribery scandal.

Bribing is unethical and it takes the level playing arena away from business and all that compete within it. Oligopolies and monopolies arise from this type of unfair business practice. The employees of Siemens felt they had done no wrong because they were simply helping the company and were not to gain anything personally. This group claimed that this type of behavior had been in place for quite a while and their management accepted as the norm.

Bribing is illegal and it is a cost of doing business in many industries. With regards to Siemens it had been a company culture that had become standard operation procedure. To gain a contract or win business companies had to have a superior product, bribe, or lose the business. In this situation the element of fair business was not achievable because the laws were not being abided by. So the only way to be competitive was to join the behavior. Advocating bribery as an answer to this type of issue is not a solution. Whistleblowing and advocating fair business practice within is always the best way. Siemens might have made money fro a while but lost in the long-term compared to doing business properly.