The Bribery Scandal at Siemens Ag Analysis
The Bribery Scandal at Siemens AG Analysis
This case discusses the bribery scandals that were unearthed at Siemens AG in 2006 and 2007. 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. Siemens agreed to pay €1 billion towards settlement of corruption charges $800 million of which was a fine imposed by U.S. in addition to the billions of euro paid in fines, back taxes and late interest.
There are many companies were resorting to illegal payments to win international contracts especially in some emerging economies where the practice was common in order to increasing competition. From this case, we can see Siemens employee who is willing to break the law in order to gain profits, compare to the punishment, it is really worth to do. But it damages their reputation and internal control. A good reputation is a value for a brand, so keep well the reputation is increase the profit. In this case, individual employees were responsible for illicit payments that were made without the approval the top management. I think a company should acknowledge their insufficient and it would take sufficient steps to become a model of corporate governance and transparency. Also the company can hire the outside expert and training their employees at the appropriate level in the company.
Many companies must deal with the pressures of doing business in a legal environment unfamiliar to their representatives when they do business internationally which is what I think is at the heart of this case. It could be very difficult do businesses in a different culture behave country, the business model and method must be quite different. The best way is familiar their culture and ethics and make sure you were doing business in the manner that was legal in the country. Also set up some international governing body and regulate some rules for all business operates within those basic
This case discusses the bribery scandals that were unearthed at Siemens AG in 2006 and 2007. 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. Siemens agreed to pay €1 billion towards settlement of corruption charges $800 million of which was a fine imposed by U.S. in addition to the billions of euro paid in fines, back taxes and late interest.
There are many companies were resorting to illegal payments to win international contracts especially in some emerging economies where the practice was common in order to increasing competition. From this case, we can see Siemens employee who is willing to break the law in order to gain profits, compare to the punishment, it is really worth to do. But it damages their reputation and internal control. A good reputation is a value for a brand, so keep well the reputation is increase the profit. In this case, individual employees were responsible for illicit payments that were made without the approval the top management. I think a company should acknowledge their insufficient and it would take sufficient steps to become a model of corporate governance and transparency. Also the company can hire the outside expert and training their employees at the appropriate level in the company.
Many companies must deal with the pressures of doing business in a legal environment unfamiliar to their representatives when they do business internationally which is what I think is at the heart of this case. It could be very difficult do businesses in a different culture behave country, the business model and method must be quite different. The best way is familiar their culture and ethics and make sure you were doing business in the manner that was legal in the country. Also set up some international governing body and regulate some rules for all business operates within those basic