...The Bribery Scandal at Siemens AG Analysis Lvao Guo Arkansas State University The Bribery Scandal at Siemens AG Analysis This case discusses the bribery scandals that happened in Siemens AG in 2006 and 2007. There are a series of scandals involve that some of the company's employees establish slush funds to obtain contracts. In another case, they were accused by IG Metall of bribing a union. It bribes the labor representatives of supervisory board to enlist their support of policy. Since then, the company managers' bribery at the Italian energy company employees was convicted by German officials. After the raid on Siemens offices in Germany, they continued to investigate the possible misconduct on Siemens in several other countries like the US, Greece, Italy and Switzerland. Due to the aftermath of the scandal, the company's Chief Executive Officer Klaus Kleinfeld and Supervisory Board Chairman Heinrich von Peeler had to resign, even if they did not directly implicate. With the Siemens bribery scandal surfaced, Volkswagen AG, Duetusche Telecom AG, Duetsche Bahn AG, and Deutche Post AG unethical business practices exposed at the same time in Germany. Those corruption scandals make a query for the German Co-determination law and Mitbestimmug—wondering if they were flawed. From the viewpoint of a Siemens employee who is willing to break the law in order to gain large profits, it was definitely worth it. However, in my opinion, enterprises have to face the legal environment...
Words: 457 - Pages: 2
...illegal or just a cost of doing business? Discuss this in light of Siemens’ bribery scandal. We believe that bribing is unethical because it takes away the fairness of a business transaction between bidders of a contract. Bribing also has a negative impact on competition because it allows for oligopolies and monopolies to emerge in an industry due to smaller competitors being unable to financially compete with the amount of the bribes. This in turn creates a barrier for entry for prospective companies and promotes the oligopoly or monopoly in place. The lack of competition affects consumer choice by reducing their options which then stifles innovation within the industry as there is no need to generate a competitive advantage to attain customers. The legality of bribing depends on the laws of the home country that the business is based from. For example, Siemens is a German based business and German law states that bribing officials of another country to win business contracts is illegal. So, under German law, Siemens was guilty of bribing an official when it bribed employees of the Italian company Enel to gain a contract as Enel was 68% owned by the Italian government. The counter-argument is that bribing is the cost of doing business. We disagree with this because the economic benefits gained from bribing are not outweighing the cost to a company’s reputation. As we see in this case, Siemens paid a 6 million euro bribe to secure a contract valued at 450 million...
Words: 1655 - Pages: 7
...Siemens AG Bribery Scandal This paper will focus on the analysis of the well-known and popular bribery scandal in the world, such as Siemens AG Bribery Scandal which occurred in November, 2006. Siemens AG is one of the largest and most popular electrical engineering companies operated in the world. The present company was founded in 1847 in Berlin and is now headquartered in Munich, Germany. The discussion and the proper analysis of this bribery scandal will help to learn many effective lessons from this situation helping organizations and individuals to avoid such cases and experiences in the future. Siemens was considered one of the most powerful and productive companies in the field of electronics and that bribery scandal surely affected its business and popularity in the world greatly. It was difficult to understand the underlying causes of this bribery scandal, especially on the part of such large, successful and popular company known not only in Germany but also all over the world. In fact, several employees and even executive board members were charged guilty in this scandal and imposed huge monetary fines for illegal and unethical behavior harming the business of the company greatly. Brooks and Dunn stated that the company developed a corrupt organizational culture “in which hundreds of millions of Euros were put into slush funds that were then used to pay bribes in order to obtain lucrative contracts” (Brooks and Dunn 290-291). There were several cases of such bribery...
Words: 1268 - Pages: 6
...Bribery Scandal at Siemens AG This case discusses a bribery scandal in which the largest Europe-based electronics and electrical company, Siemens AG, was exposed during 2006 and 2007. Siemens AG is a multinational company based in Munich, Germany. In fact, there wasn’t just one bribery scandal. They were responsible for a series of scandals that involved a few of the company’s employees. They were accused of bribing officials to get contracts and creating slush funds. Siemens was also accused of trying to bribe labor representatives of a labor union called the AUB. Siemens was also being investigated in other countries such as Switzerland, Italy, Greece, The United States, Venezuela, Argentina, and Bangladesh for possible misconduct and other scandals. Siemens agreed to pay the fines of up to 1 billion Euros to settle for the corruption charges that the company was convicted since 2006. They also had to pay fines for back taxes and interest charges by 2007. Discussion Question 1) In your opinion is “bribing unethical and illegal or just a cost of doing business? Discuss this in the light of Siemens’’ bribery scandal. What options do companies have to win business contracts without bribing, especially in foreign counties? In my opinion, bribery is unethical because bribery is illegal. Bribery is the act of giving a gift or implying money that can change the behavior of the one at the receiving end of the bribe. Not only is it a crime but it is morally wrong to influence...
Words: 634 - Pages: 3
...Siemens AG is a German multinational engineering and electronics conglomerate company headquartered in Berlinand Munich. It is Europe's largest engineering company and maker of medical diagnostics equipment and its medical health-care division, which generates about 12 percent of the company's total sales, is its second-most profitable unit behind the industrial automation division. Siemens' principal activities are in the fields of industry, energy, transportation and healthcare. It is organized into four main divisions: Industry, Energy, Healthcare, and Infrastructure & Cities. Siemens and its subsidiaries employ around 360,000 people across nearly 190 countries and reported global revenue of approximately €78.3 billion in 2012. The company has been the subject of a number of controversies in its history. There were a series of scandals that involved some of the company's employees bribing foreign officials to gain contracts and creating slush funds for this purpose. In 2008, it was revealed that Siemens had bribed the two main political parties of Greece for approximately 10 years to be the sole provider of mechanical and electrical equipment of the Greek state. After the exposure the German authorities moved to arrest the representatives of Siemens in Greece, who had managed to escape from the Greek authorities. The German judicial system didn't allow the Greek authorities to cross-question the representatives. As a result, there wasn't any solid evidence against the...
Words: 655 - Pages: 3
...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...
Words: 418 - Pages: 2
...For this assignment our learning team discussed the Bribery Scandal at Siemens AG. As a group we analyzed the case and conducted additional research to answer critical questions in each key section. Supported by the course material and supplemental articles, the team compiled the research that discussed Internet technologies, affective technologies in management development strategies, global alliances and provided recommendations on cross border operations. Key issues Analysis of the Siemens case resulted in several key issues which explained the bribery scandal. Lack of leadership is the primary cause for the Siemens representatives convicted of bribery in 2007. The intention of the bribery was to ensure that Siemens obtained needed global contracts. The methodology offered supported no personal gain from this bribery and the organization gained contracts which negated a cause for an illegal act. In addition, Siemens was operated in countries where these acts were considered legal. There were no other documented strategies to obtain the contracts that did not include illegal activity (Deresky, 2011). Although managers were able to offer defenses against the allegations, the underlying issue in this case is poor leadership will result in multiple scandals. The leadership team within this organization took no responsibility from an international perspective to create an ethical environment and standards for their employees. There was no acknowledgement of illegal activity...
Words: 923 - Pages: 4
...Corruption and Bribery April 29, 2015 Abstract In this paper, I will be writing about corruption and bribery. I will define the terms and go on to explain the regulations that have been put in place to stop corruption and bribery. I will then go on to give examples of major corruption and bribery scandals that companies have recently been in and what has been done to punish said companies for their crime. Intro Corruption is defined in the Merriam-Webster Dictionary as “dishonest or illegal behavior especially by powerful people (such as government officials or police officers), the act of corrupting someone or something, and something that has been changed from its original form”. (Merriam-Webster) Bribery is defined as “something valuable (such as money) that is given in order to get someone to do something”. (Merriam-Webster). A bribe can be from person to person, company to company, or even country to country and it is considered a crime in most parts of the world. Many would agree that there is a lot of bribery and corruption in modern day politics as well as International companies, but I will not be going into that for it is another huge topic. “Bribery and corruption are major obstacles to socio-economic development and distort national and international economic relations.” (IBE) This corruption is seen as an unfair advantage for companies with a lot of money to throw away to get what they want and is considered very unethical in the eyes...
Words: 1781 - Pages: 8
...Siemens: The Costs of Neglecting Moral Leadership What is at stake when business leaders ignore good ethical practice and companies lose their ethical reputation? This can be illustrated by one of the latest scandals. Siemens was embroiled in a huge corruption scandal that has severely shaken the confidence of a once proud and self-conscious Siemens “community,” tarnished its reputation, and caused substantial financial losses. Most of the $ 1.8 billion that Siemens paid out in bribes was to secure contracts. German law permitted companies to pay bribes outside Germany up to 1999, and even allowed these payments to be tax-deductible. On November 15, 2006, German prosecutors raided offices and homes of Siemens AG staff as part of an ongoing investigation into bribery. The subsequent investigations covered business representing 60% of Siemens’ revenues and spanned operations in Asia, Africa, Europe, the Middle east and the Americas. Through interviews with key Siemens executives, this case looks at how one of the world’s largest companies faced corruption head on. Siemens was fined and disgorged profits for $ 1.6 billion and paid $850 million in investigation costs, as well as probably millions more in focusing in fighting corruption rather than developing new innovative products. In addition, its top management team was fired, faced legal consequences, and paid hefty fines. Like most large corporations, Siemens had a code of ethics and a code of business conduct, was...
Words: 749 - Pages: 3
...Corruption: The Most Pressing Problem in Exporting and Importing 2013-2017 1 Corruption: An Overview Corruption exists all over the world, regardless of how social conservative, religious, or developed a nation may be. While some countries have taken an active approach to outlaw the practice, others have embraced the habit as a method in which to conduct business. Because of this disparity there are varying degrees of how prevalent corruption is by country. Transparency International, a global coalition against corruption, defines corruption as “the abuse of entrusted power for private gain” (Transparency International, 2012). As such, corruption is not limited to just one form or one sector of society and is a complex social issue that does not lend itself to an easy solution. Due to the nature of corruption it is difficult to quantify just how much money is lost to the practice each year. It is not until an organization is discovered engaging in corruption that a value can be placed on it. However, those are isolated incidents and the amount of money involved varies from one case to the next. A report in Global Financial Integrity stated that “illicit outflows increased from $1.06 trillion in 2006 to approximately $1.26 trillion in 2008” (Kar & Curcio, 2011). Illicit outflows consist of corruption, tax evasion, theft and embezzlement. Due to “abuse of entrusted power” corruption is difficult to measure and contain because of the human...
Words: 2908 - Pages: 12
...Section 2.3 : Credit Ratings MERGERS & ACQUISATIONS Section 3.1 : Legal Structures Section 3.2 : Documentation Section 3.3 : Business Valuation TAKEOVERS Section 4.1 : Types Of Takeover Section 4.2 : Financing a Takeover Section 4.3 : Mechanics Section 4.4 : Strategies Section 4.5 : Agency Problems Section 4.6 : Pros & Cons Laws & Codes used during takeover Section 5.1 : City Code on Takeovers & Mergers Section 5.2 : Competetion Law Section 5.3 : Takeover Directives Section 5.4 : Companies ACT 1985 BLACKBERRY TAKEOVER REGULATORY APPROVAL COMPETETION COMMISION FOR TAKE OVER FCPA Section 8.1 : Provision & Scope Section 8.2 : History Section 8.3 : Requirements Section 8.4 : Application UK BRIBERY ACT TAKEOVER MECHANICS OF BLACKBERRY TAKEOVER CONCLUSION BIBLIOGRAPHY & REFERENCES ACKNOLEGDEMENT I take this opportunity to express my profound gratitude and deep regards to my guide Prof. Deepak Dayal for his exemplary guidance, monitoring and constant encouragement throughout the course of this thesis. The blessing, help and guidance given by him time to time shall carry me a long way in the journey of life on which I am about to embark. I also take this opportunity to express a deep sense of gratitude to Mr. Krishnamurthy, Director, Institute of Management Technology, Dubai for his cordial support, valuable...
Words: 23370 - Pages: 94
...PART 2 The Global Marketing Environment CHAPTER 2 The Global Economic Environment Case 2-1 The Global Economic Crisis I n his 1997 book One World, Ready or Not, William Greider described the United States as “the buyer of last resort.” Greider explained that, for many years, the United States was the only nation that was willing to absorb production surpluses exported by companies in Europe, Asia, and Latin America. Greider asked: “Who will buy the surpluses when the United States cannot?” The conventional wisdom has long held that strong spending by consumers in other nations would keep the world economy humming. However, by 2008, Greider’s question was taking on a new urgency and the conventional wisdom was being tested. An economic crisis that had its roots in lax subprime mortgage lending practices began to spread around the globe. In the United States, where the crisis began, economic misery was widespread: The housing market collapsed, real estate values plummeted, credit tightened, and job growth slowed (see Exhibit 2-1). As the price of oil passed the $100 per barrel benchmark, the average price of a gallon of gasoline rose to $4. American consumers were, indeed, less willing and less able to buy. However, the crisis was not confined to the United States alone. Consumer-goods exporters in Asia, which Exhibit 2-1: The bursting of the global real estate bubble was only one aspect of the worst recession in decades. The ripple effects from the economic...
Words: 24814 - Pages: 100
...This page intentionally left blank Lut12575_fm_i-xxvi.indd Page i 2/10/11 2:28 PM user-f494 /203/MHBR222/Lut12575_disk1of1/0078112575/Lut12575_pagefiles International Management Culture, Strategy, and Behavior Eighth Edition Fred Luthans University of Nebraska–Lincoln Jonathan P. Doh Villanova University Lut12575_fm_i-xxvi.indd Page ii 2/11/11 2:35 PM user-f494 /203/MHBR222/Lut12575_disk1of1/0078112575/Lut12575_pagefiles INTERNATIONAL MANAGEMENT: CULTURE, STRATEGY, AND BEHAVIOR, EIGHTH EDITION Published by McGraw-Hill, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY 10020. Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Previous editions © 2009, 2006, and 2003. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on recycled, acid-free paper containing 10% postconsumer waste. 1 2 3 4 5 6 7 8 9 0 QDB/QDB 1 0 9 8 7 6 5 4 3 2 1 ISBN 978-0-07-811257-7 MHID 0-07-811257-5 Vice President & Editor-in-Chief: Brent Gordon Vice President, EDP/Central Publishing...
Words: 69321 - Pages: 278
...ETHICS IN INFORMATION TECHNOLOGY Third Edition This page intentionally left blank ETHICS IN INFORMATION TECHNOLOGY Third Edition George W. Reynolds Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States Ethics in Information Technology, Third Edition by George W. Reynolds VP/Editorial Director: Jack Calhoun Publisher: Joe Sabatino Senior Acquisitions Editor: Charles McCormick Jr. Senior Product Manager: Kate Hennessy Mason Development Editor: Mary Pat Shaffer Editorial Assistant: Nora Heink Marketing Manager: Bryant Chrzan Marketing Coordinator: Suellen Ruttkay Content Product Manager: Jennifer Feltri Senior Art Director: Stacy Jenkins Shirley Cover Designer: Itzhack Shelomi Cover Image: iStock Images Technology Project Manager: Chris Valentine Manufacturing Coordinator: Julio Esperas Copyeditor: Green Pen Quality Assurance Proofreader: Suzanne Huizenga Indexer: Alexandra Nickerson Composition: Pre-Press PMG © 2010 Course Technology, Cengage Learning ALL RIGHTS RESERVED. No part of this work covered by the copyright herein may be reproduced, transmitted, stored or used in any form or by any means graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, digitizing, taping, Web distribution, information networks, or information storage and retrieval systems, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission...
Words: 204343 - Pages: 818
...International Marketing and Purchasing of Industrial Goods An Interaction Approach B y IMP P roject Group Editor: Håkan Håkansson, U niversity of Uppsala J OHN WILEY & S ONS Chichester • New York • Brisbane • Toronto • Singapore Copyright © 1982, by John Wiley & Sons, Ltd. All rights reserved. No part of this book may be reproduced by any means nor transmitted, nor translated into a machine language without the written permission of the publisher. Library of Congress Cataloging in Publication Data Håkansson, Håkan, 1947 International marketing and purchasing of industrial goods. Bibliography: p. Includes index. 1. Marketing – Europe. 2. Industrial procurement – Europe. I. Title. HF5415.12.E8H34 658.8'0094 81-13070 ISBN 0 471 27987 0 AACR2 British Library Cataloguing in Publication Data: International marketing and purchasing of industrial goods. 1. Marketing – Europe 2. Purchasing I. Håkansson, Håkan 658.8' 394 HF5415.1 ISBN 0 471 27987 0 Typeset by Pintail Studios Ltd., Ringwood, Hampshire Printed in the United States of America Contents Preface ....................................................................................... ix 1. Introduction A CHALLENGE ......................................................................................... 1 MARKETS FOR INDUSTRIAL GOODS ...................................................... 1 BENEFITS OF STABILITY AND OBSTACLES TO CHANGE IN INDUSTRIAL MARKETS ........................
Words: 177248 - Pages: 709
