...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...
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...Case Analysis Worksheet: Summary Siemens, the German engineering giant, agreed to pay a record total of $1.6 billion to American and European authorities to settle charges that it routinely used bribes and slush funds to secure huge public works contracts around the world. The company pleaded guilty in federal court in Washington to charges that it violated a 1977 law banning the use of corrupt practices in foreign business dealings. Officials at the Justice Department and at the S.E.C., which also investigated the case, said that some Siemens agents in the United States participated in the schemes. But most of the transactions were in foreign countries. Company employees created off-the-books slush funds, used middlemen posing as consultants and delivered suitcases filled with cash to bribe foreign officials. (Doughety, 2008) Linda Chatman Thomsen, the head of the S.E.C.’s enforcement division, said that the company paid an estimated $1.4 billion in bribes to government officials in Asia, Africa, Europe, the Middle East and Latin America. She called the schemes “unprecedented in scale and geographic reach.” The United States claimed partial jurisdiction because Siemens, once it became listed on the New York Stock Exchange in 2001, was subject to American financial laws and regulations. Prosecutors in Munich, whose work revealed the outlines of the bribery operation, also announced a deal with Siemens that would cost the company 395 million euros ($540 million). That figure...
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...Running head: Ethical and Moral Issues in Business * Ethical and Moral Issues in Business MGT/216 * Ethical and Moral Issues in Business * In this paper I will address the following topics: the differences between moral and ethical issues, the differences between business ethics and personal ethics and list some examples of ethical issues in today’s business environment. The line between morals and ethics may seem blurred; however, some differences between the two do exist. Morals are defined as one’s personal values or beliefs. These values are typically established by religious beliefs or family influences. Ethics are defined as guidelines for behavioral standards. These guidelines are usually set in place by a specific group or groups of people. For example, businesses usually have a specific code of ethics that may differ from a religious group’s code of ethics. What is acceptable for one group or organization may be unacceptable to others. Business ethics are defined as codes or guidelines used to govern behaviors and practices within any given company. Typically all companies abide by a written code of ethics. These codes are used to ensure that employees understand and practice acceptable behaviors in the workplace. Usually a company’s code of ethics is influenced by the culture surrounding that business. In the business world, personal ethics will sometimes be put aside for the greater gain of the...
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...is looking to do business with other international companies. One of the countries that Precision part is interesting in is Germany. In order to do business in Germany, it is important to understand their business ethics and laws. By understanding the law at hand, it would give Precision Part Inc. a better understanding on how Germany conduct business and also to make sure the company is ethical. A few international countries believe in corruption. Corruption can consist of bribery and nepotism. Bribery is more common in underdeveloped countries that are looking for additional income to bring in. Bribes are expected in many countries, the United States’ 1977 Foreign Corrupt Practices Act prohibits payments made to foreign government officials with the aim of gaining or maintaining business (Here Comes the Bribe). The Foreign Corrupt Practices Act was updated in 1998 after bribery was banned from Germany. Now the Foreign Corrupt Practices Act applies to foreign firms and persons who cause an act in making such a corrupt payment within the United States territory (Foreign Corrupt Practices Act). Bribery is another way of saying extorting money from someone. Bribery is when money or something value is promised to, given to, or taken form an individual or company in attempt to sway someone decisions. Nepotism is more of a government corruption. Government will use their powers for dishonest gains or illegal means. German engineering conglomerate Siemens, rocked by the worst...
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...Bribery and corruption is a way of life in many countries. These practices affect the way international business is regularly conducted. However, in most of these countries, it is illegal to offer or receive bribes or engage in corrupt practices. Yet corrupt practices are a part of the ‘culture’ of ‘doing businesses. Unless companies ‘conform’ to such practices, in many cases, international business cannot be transacted. This paper will attempt to provide discussion about bribery and corruption in international trade example in vary different point of view in according to the principal ethical system suchlike religious, philosophical and ‘natural’. It will anayize the case of Siemens bribery scandal related to ethical issues. Bribery is a most important issue of concern to many companies. Incidents of bribery vary across many countries. Not everyone has the same opinion about this issue. Hong Kong and Greek managers are less critical of bribery in certain situations than Americas. Paying bribery carries with it a great risk to damaging the company reputation with the country which the briberies are paid and at home. Moreover, there is also the risk that the corporate culture of the company will become more open-minded of several of other practices at the legal issues. There is also evidence to suggest that those countries with the reputation for bribery and corruption damage themselves as it reflects in their economic growth has a low rates for high level of corruption. Corruption...
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...Harvard Business School: Jextra Neighborhood Stores in Malaysia Introduction Tom Chong has several issues he needs to deal with in couple of weeks; however, some issues are more critical than others so he has to handle them accordingly. Chong has two major issues that must be resolved: one of the issues is a recent conversation between him and the mayor of Klang, a town in which Jextra would like to build a new store. The mayor informed Chong that Jextra's application approval process for rezoning would speed up if Jextra will support a new primary school building in Klang. The mayor also wants Jextra to help pay for a flyover at the road intersection near the proposed store site. Should Chong invest Jextra’s money in those projects? Chong's other issue involves the job performance of one of his category managers, Arif Alam. He is one of the top performing managers at Jextra. Chong could not stop wondering if Alam is accepting money and gifts from Jextra’s suppliers. Although Chong has no proof that the manager is acting inappropriately, there are many rumors floating around Jextra's office. Should Chong investigate Alam? By the way, who is Tom Chong? Tom Chong is the country manager in Malaysia for Jextra Stores (Jextra), a large Asian supermarket retailer based in Hong Kong and owned by Sim Lim Holdings – a large publicly traded industrial group. The company Jextra, operates ten Neighborhood supermarkets in Malaysia. This paper is to analyze how Chong will eradicate...
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...A special CBI court on Thursday sentenced B Ramalinga Raju, his two brothers and seven others to seven years in prison in the Satyam fraud case. The court also imposed a fine of Rs 5 crore on Ramalinga Raju, the Satyam Computer Services Ltd's founder and former chairman, and his brother B Rama Raju and Rs 20-25 lakh each on the remaining accused. HT presents a lowdown of the country's biggest-ever corporate accounting scandal . What is the Satyam scam about? It is about corporate governance and fraudulent auditing practices allegedly in connivance with auditors and chartered accountants. The company misrepresented its accounts both to its board, stock exchanges, regulators, investors and all other stakeholders. Is this an accounting fraud, a market manipulation/fraud or both? It is a fraud, which misled the market and other stakeholders by lying about the company’s financial health. Even basic facts such as revenues, operating profits, interest liabilities and cash balances were grossly inflated to show the company in good health. Who is to blame here? The promoters? The promoters are primary culprits, although it is almost impossible to misrepresent such facts without the connivance of the auditors and some executive board members. Independent directors, it seems, were kept in the dark about the actual books of accounts. What about the auditors? The role of external third party auditors, who were tasked to ensure that no financial bungling is undertaken to carry...
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...and environmental concerns in their business operations and interactions with their stakeholders. CSR is generally...
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...focus on economic benefits which might erode broader social benefit or harm the society. In this light, this report seeks to evaluate Corporate Social Responsibility (CSR) in theory and actual practice. In the process of evaluating, the assignment would showcase different scenarios / cases where CSR abuses or upholding the same would be examined. From such cases, arguments would be built to show how abusing business activities (Hamilton and Webster, 2012, p. 311) may have a negative impact on stakeholders and societies; and how upholding CSR values is beneficial for the society at large besides being beneficial from business standpoint as well. Globalisation has increased corporate power which is pervasive on a world wide scale and any abuses of this power has reverberating effects across the globe, an example being Lehman Brother’s management and the company’s auditors E&Y (Hamilton and Webster, 2012, p. 311) who played their role in the fall of banking system leading to global financial crisis. In this case, E&Y as an auditor was not ethical about its business leading to severe losses to the public. Large businesses have many times been accused of not being ethical and socially responsible as human...
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...92SUMMER PROJECT REPORT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF UNDER GRADUATE DEGREE IN BUSINESS ADMINISTRATION SUBMITTED TO ADITI BATHEJA SUBMITTED BY ARJUN BHALLA BBA+MBA (DUAL) A3923014057 AMITY SCHOOL OF BUSINESS, NOIDAAMITY UNIVERSITY – UTTAR PRADESH RESEARCH METHODLOGY RESEARCH METHODLOGY Theoretical background of the topic: Absenteeism has been variously defined by the Authorities from time to time. Thus the term Absenteeism refers to the workers absence from his regular task, when he is scheduled to work. Any employees stay away from work if he has taken leave to which he is entitled or on the grounds of sickness or some accident without any previous sanction of leave....
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...Fachbereich Wirtschaftswissenschaften Studiengang International Management Fach- Sozial und Methodenkompetenz Bachelor Research Proposal Consumer perceptions of socially responsible consumption: Attitudes among Chinese and German business students- A comparative/ contrastive study * * * Index 1 Title and Initial Statement of Research Question 3 2 Background 3 3 Statement of research objective 6 3.1 Primary research objective 6 3.2 Secondary research objective 6 3.3 Definition of terms 6 3.4 Detailed explanation of objectives 7 4 Research design and schedule 8 4.1 Approach 8 4.2 Methods of familiarisation: 8 4.3 Methods of using text: 9 4.4 Methods of using Talk: 9 4.5 Methods of using experimentation: 10 4.6 Methods of observation: 11 4.7 Tools of data recording and documentation 12 4.7.1 Tools for talk 12 4.7.2 Tools for text 12 4.7.3 Tools for observation 12 4.8 Time schedule 12 5 Significance and creativity 13 6 List of References 13 Title and Initial Statement of Research Question Consumer perceptions of socially responsible consumption: Attitudes among Chinese and German business students- A comparative/ contrastive study Every single consumption choice that consumers make has a huge impact on the environment and the society. Consumers can influence the market by buying products that have a limited impact on the environment and the society. By taking social responsibility in...
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...ASOCIO Policy Paper CORPORATE SOCIAL RESPONSIBILITY Date: June 2004 Table of Contents 1 CORPORATE SOCIAL RESPONSIBILITY ........................................................... 2 1.1 What is corporate social responsibility? ........................................................ 2 1.2 Asia Pacific Perspective ................................................................................ 2 1.3 Corporate Social Responsibility: Unlocking the value................................... 3 1.4 World Economic Forum & CSR ..................................................................... 3 1.5 Case Studies ................................................................................................. 4 1.6 Should ASOCIO have a role? ....................................................................... 5 CORPORATE SOCIAL RESPONSIBILITY ASOCIO Policy Paper June 2004 1 CORPORATE SOCIAL RESPONSIBILITY Corporate Social Responsibility (CSR) is becoming an increasingly important activity to businesses nationally and internationally. As globalisation accelerates and large corporations serve as global providers, these corporations have progressively recognised the benefits of providing CSR programs in their various locations. CSR activities are now being undertaken throughout the globe. 1.1 What is corporate social responsibility? The term is often used interchangeably for other terms such as Corporate Citizenship and is also linked to the concept of Triple...
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...Extended Essay Business and Management Research Question How does operating in highly corrupt countries impact Shell's approach to operating ethically and with corporate social responsibility? Candidate Name: Lucas Pontes IB Candidate Number: 000416 - 0070 School Name: International School of The Hague Advisor: Jane Austin Date Submitted: 11 February 2014 Word Count: 3863 Abstract’s Word Count: 223 Abstract This essay is aimed at answering the question ‘How does operating in highly corrupt countries impact Shell's approach to operating ethically and with corporate social responsibility?’ In order to answer the question Business and Management tools and theory have been applied to Shell’s way of doing business, focusing on corrupt countries. The essay takes into consideration the causes of corruption or unethical behaviour, and links to what Shell could do, or have done, to prevent such behaviour. The information of this essay has come from the public domain as well as Shell’s internal policies such as their Code of Conduct, their General Business Principles and other websites listed in the bibliography. The way in which Shell is considered a business, which has a corporate social responsibility approach, was assessed by using external business tools such as SWOT analysis and Cause and Effect diagram. The analysis allow us to see that Shell is trying to minimise the level of corruption and unethical behaviours among Shell and its employees by adopting several...
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...corruption and unethical corporate behaviour in international business. Risks of displaying unethical corporate behaviour such as bribery and corruption includes repercussions in the form of anti-corruption indictments or public relations disasters and reputation damage resulting from negative publicity surrounding poor moral actions. Some economists argue that bribery and small-scale corruption is essential to doing business in some host nations and market, and others argue that in the long term, participating in unethical behaviour has negative impacts on both the local economy and the parties involved. Multinational corporations constantly involved in international business dealings can do three things to stop corruption: (1) - have ethical standards or company-wide moral codes in place to avoid having employees involved in unethical corporate behaviour, therefore making anti-corruption legislation easier to regulate, (2) – they need to use their resources and effects on local markets as leverage to discourage corruption in any economy, and (3) - discontinue business in that market if neither of those are viable options. Introduction Corruption can come in different sectors, scales, and methods. This report will put a focus on petty corruption (small scale, such as giving gifts or using personal connections to obtain favours) and systemic corruption (larger scale; ingrained in the culture) in government and business...
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...playing games is what happens. Someone comes along and they think they know something the rest of us are too dumb to know. They think they are special and that God bestowed upon them special powers to get away with something no one else has been able to get away with in the entire history of mankind. I am intrigued with the thought process behind the faces of these people who think they have what it takes to trick the rest of us. I can only think of a few words; hubris, vanity, ego, arrogance and delusional. I do not believe it is truly possible to ever get away with anything. No man has a good enough memory to be a successful liar. Given the corporate ethical breaches in recent times, I will assess whether or not I believe that the current business and regulatory environment is more conducive to ethical behavior. I will say up front that as I start this paper I do not believe anything has improved in America or in the world ethically speaking. I say this with confidence but not with pride. After all we are all human and we all have a sin nature. I do not care if a person tells me they do not believe in God or if they tell me they do believe in God. Research has proven conclusively that all of us cheat. We essentially weigh everything based upon...
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