The bribery itself reduces the freedom of choice by altering the conditions under which a decision is made. Its appeal of additional gains for some government officials would lure them to select the less attractive alternative which provides less total satisfaction. By doing so, it adversely would disrupt the official’s decision and undermined fair competition among the industry. If the De La Rua administration’s doubt that the cost of each electronic ID reported by Siemens was twice what the government estimated is true, then the government has to pay the price for the hidden payment with more governmental expenditure, which leads to a greater loss of money of the government. Secondly, it would damage the authority, prestige and force of laws and regulations. Thirdly, it would undermines attempts by governments to improve the overall wealth of the nation, diminish the image of government and governing party, and further lose people's trust. For Argentine community, from the perspective of whole economy system and environment, it would: I. Hinder fair and just competition and disrupt the order of the whole economic system. Instead of gain market share with quality, businesses would turn to shortcuts like relationship with government officials II. Result in allocating more resources to a less desirable alternative. The failure of the allocation system would lead to stagnation of technology, service and the whole industry structure. III. Increase the cost of transaction, and do harm to public's interest. The higher cost would result in higher prices or even monopoly.
From the whole society, it would:
i. Cast damage to social credit and rot the social conduct. On one hand, the prevalence of bribery destroys the mutual trust and equity of businesses; on the other hand, businesses with good compliance to laws are suppressed and discouraged. ii. Violate code of ethics
iii. Breed more and more relative crimes. Bribery is always accompanied with business secret theft, deception and evasion of taxes.
For Argentine people, the greater expense on the ID project would result in more outflow of tax payers’ money from their pocket in that the misconduct and wrong doings of officials would be shared by all the community. The bribery would harm taxpayers as well as undermine public support for governments. For Siemens ‘competitors, Siemens ‘bribery would deprive them of fair competition in this project, and further distort trade the loss of the competitors is invisible, though, but solid. For Siemens ‘stockholders, employees and local community, the loss of the contract would provide lower profits for the stockholders, fewer jobs for the employees and less money in the competitors ‘local community. Taking the interest of all stakeholders into account, Siemens violated business ethics seriously, even though it brought some illegal benefits to its own stockholders. Mr. Siekaczek says that from 2002 to 2006 he oversaw an annual bribery budget of about $40 million to $50 million at Siemens. Company managers and sales staff used the slush fund to cozy up to corrupt government officials worldwide. The payments, he says, were vital to maintaining the competitiveness of Siemens overseas, particularly in his subsidiary, which sold telecommunications equipment. “It was about keeping the business unit alive and not jeopardizing thousands of jobs overnight,” he said in an interview. Siemens is hardly the only corporate giant caught in prosecutors’ cross hairs. Three decades after Congress passed a law barring American companies from paying bribes to secure foreign business, law enforcement authorities around the world are bearing down on major enterprises like Daimler and Johnson & Johnson, with scores of cases now under investigation
Suggestions to prevent such incidents in future:-
Internally: shaping organizational ethical environment Siemens’ bribery scandal is by no means the...