Siemens: Just Breaking the Eleventh Commandment? (Case Study)
Q1. What are the main individual and situational factors encouraging the alleged bribery at Siemens? which in your opinion, are the most important?
The surrounding effects that Siemens bribery scandal went through from individuals that were directly responsible for such an unethical behavior and to situational threats that made bribery the only way to make business, especially when dealing with poor countries and corrupted governments. And after going through investigation, it became clear that corruption was more than a way to do the job but it was a corporate culture within the industry. Although, to make it more tempting and exciting, the German corporate tax code only made bribery technically illegal in the late 1990s which really affected many organizational cultures in terms of change to unethical behavior. Another important factor is that employees were to be involved in some way while dealing with pressure from the competitive market, other loyal employees, and higher management. As a result, I believe that a strong corporate culture in this case enriched the corruption and employees were happy to cope with.
The main individual factor that encouraged bribery at Siemens:
1- Psychological factors are concerned of how people think from an ethical decision point of view.
2- Personal Values might be regarded as moral principles or accepted standards of a person. So, in this case, all person's values will determine how he will perceive any particular situation. In this situation we can determine the personal values, by going through the decisions Siemens have made, and what was the important factor that leads to this situation.
3- Personal Integrity that reflects the personal value, and means that we should always do what is right regardless of any consequences and implying such trustworthiness was not reflected in Siemens organizational culture and behavior.
Q2. Explore the corruption scandals in terms of the issue-related factors discussed in chapter 4, namely moral intensity and moral framing. To what extent did the firms featured experience corruption as a morally intense issue and what impact did the moral framing of the activities involved have on this?
Certain characteristics of issues may verify their moral intensity. In general, issues with a lot of serious consequences are likely to get to a higher level of intensity. Also, issues that are considered by a societal consensus is to be more ethical or unethical are more likely to engage with ethical decision making processes. On the other hand, the components of moral intensity and the effect they might have on the ethical decision-making process are influenced by the type of situation.
The moral intensity in this case can be perceived in different perspectives to the way the issue is framed. Because the most important aspect of moral framing is the language used or the frame in which we put our moral issues in. And, based on moral framing, Siemens framed bribery as a strategy to open new markets and a way to do the job.
Q3. Critically evaluate the initiatives Siemens has implemented to address bribery problems across its operation. Are these sufficient or would you suggest further action?
Corruption is a social concern that corporations can't ignore, it is the main issue that directly affects the company and society. Corruption is becoming an important issue for businesses to address. Basically, It will lead to diverting the resources from major services like education, and health care to un-honest government.
Siemens is trying its best to prevent corruption by introducing an anti-corruption approach especially after going through all the mentioned scandals. They have hired an American law firm and spent millions on the internal investigation, also they implemented new measures to enhance transparency and accountability within the organization. They have also appointed a former German finance minister as an in-house monitor to help ensure that the company remains free of corruption.
I think that their actions are not sufficient, Although, I suggest that they :
1- Must embrace a strategic corporate social responsibility plan and make that a part of their CSR mission.
2- To be more proactive especially when solving problems related to the business.
3- Take a greater leadership role in the anti-corruption effort by supporting compliance and collective actions.
4- Changing the company's long-standing culture that upholds bribery as a way of work.
Q4. Thinking of bribery from the perspective of wider society, do you think that a fine however high is an adequate response? What penalties, for instance, could you suggest to foster more ethical values at the company or higher personal integrity on the part of its employees?
Talking about the bribery side effect on the society and economy will create a less favorable business environment and will weaken trust in public institutions and challenges democratic principles. I guess that paying a fine will be accepted to some extent if we consider it as a kind of compensation for the misuse of resources. But on the moral side of this punishment, it may be inadequate because of its failure in changing the organizational culture and behavior and re-orienting the management and employees back to the proper track. Also, paying a fine will not change society's negative view of the organization. For that reason, i believe that re-formulating the plans and strategies on a social, moral, and ethical base is the best pathway to build a non-corrupted environment.
Finally, In terms of the best punishment for such cases, I believe that prison sentence will be the strongest deterrent punishment after paying back the misused money.