International Management

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Case 1: The Bribery Scandal at Siemens AG
Background:
In 2006, a Germany company, Siemens was caught in a scandal for bribing employees with other companies to get contracts. Some of the executive board members and employees have been charged and the company fined for 30 million euro. This scandal shocked many people and started to look the issues of bribery amount business.
Siemens formed in 1847, it is one of the world’s most important companies and Europe’s largest technology conglomerates. But their funds were used to bribe government officials and business contacts to win lucrative contracts in many countries. Some managers who admitted the bribery but defended themselves said bribing is a common way of business practice in some countries. As a result, Siemens lost most of the market shares in global business in 2006. More over they will need to spend a long time to build their fame and the trust of customers and business partners.
Question1. In your opinion, is “bribing” unethical and legal or just a cost of doing business? Discuss this in light of Siemens’ bribery scandal.
It is definitely an unethical and illegal business problem because all the business transaction should be under fairness. If bribing is allowed, would make oligopolies and monopolies growth strong in the world market. Later would create a barrier for new companies to enter the market, as a result those companies which stay would only have small competition. These effects to consumer a lot by reduce the choice for products and the price would increase.
For Siemens, bribing made them loss fame, money and truth of other companies and customers. Also the law in Germany and any other counties are all declare that bribing is illegal. So a company must avoid bribing government officials to win business contracts.
What options do companies have to win business contracts without bribing, especially in foreign countries? There are many ways companies can do without violating the law.

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