International Business: A Comprehensive Report on Siemens Bribery Case

This report provides a comprehensive analysis of the Siemens bribery and corruption case, focusing on the company's violation of the Foreign Corrupt Practices Act. The report begins with a profile of Siemens, a global industrial engineering and electronics company, and summarizes the bribery accusations involving over a billion dollars spent to win infrastructure contracts across various countries. Key issues identified include the bribery culture endorsed by senior management, the damage to the company's reputation, and the involvement of the company in a worldwide system of corruption. The case illustrates how large companies engage in unethical practices to gain market share. The report also examines the questions raised by the case, primarily focusing on ethics, morality, and the justifiability of penalties, emphasizing the importance of ethical behavior and the need for regulations to prevent corruption. The conclusion highlights the role of relativism in dealing with corrupt practices, especially concerning the impact of corporate giants' actions on small businesses. The report references relevant academic articles and provides a detailed overview of the case's implications for international business, ethics, and corporate governance.

Business Law

Introduction
The given case study is related to the bribery
and corruption case at Siemenswhere the
company was held liable for bribing several
entities, especially in its communication and
power-generating division.U.S. authorities
under the Foreign Corrupt Practices Act
caught Siemens liable for bribing in order to
win infrastructure contracts.
It was found that the company spent more
than a billion dollar to bribe several
government officials, over the globe where it
has its business.

Brief profile of the organisation in the case
Siemens is a Germany based world’s
one of the largest industrial engineering
and electronic company, operating in
around 190 countries in the world
(Siemens.com Global Website 2019).
The company scored a revenue of €83.0
billion along with a net income of €6.1
billion in the fiscal year of 2018.
It is global company that focus on
producing automation, digitalization
and electrification (siemens.com Global
Website 2019).

Brief summary of the case
Accusation of bribery was brought against Siemens by
several countries and agencies like the United Nations and
European Union in the 1970s.
U.S. authorities under the Foreign Corrupt Practices Act
caught Siemens liable for bribing in order to win
infrastructure contracts.
It was found that the company spent more than a billion
dollar to bribe several government officials, over the globe
where it has its business.
The U.S. Securities and Exchange Commission (SEC) held
that the company indulged in around 4000 bribery
transactions for obtaining contracts to supply transmission
lines in China, medical devices in Russia, medical
equipment to Vietnam, transit system in Venezuela,
telecommunication equipment to Bangladesh and power
equipment to Iraq over a period of seven years.

Identifying the key issues in the case
The major issues in the case would be certainly be the
bribery culture at Siemens that was endorsed by its
senior managers for winning contracts in the fields of
power-generations and communication.
It was pointed out that Siemens and two of its former
employees were involved in a fraud scheme that
ruined the reputation of the company to a great extent
(Esterl and Crawford 2008).
After the disclosure of the scandal, several clients of
the company refused to place orders form the firm. It
could be clearly held that Siemens had organised a
worldwide system of corruptive approaches for
gaining market share by indulging into bribing
organisations.

Continue….
The company has also been accused of bribing labour
representative for gaining their support.
This issue was highlighted after the scandal of bribing
the various governmental agencies around the globe was
found out.
Several investigative operations were initiated against
the company by countries like US, Italy, Greece and
Switzerland for misconduct and breach of ethics (Esterl
and Crawford 2008).
With the disclosure of the scandal, the Chairman of the
supervisory board Heinrich von Pierer and the CEO of
Siemens Klaus Kleinfeldresigned which shook the overall
strength of the company.

Theories/concepts that the case illustrates about
international business
The case suggest that the big companies often indulge
in corruptive practises and collusive approaches in
order to gain shares and revenues, and win support
from the associate organisations with whom they carry
out transactions.
However, such unethical approaches are often called
out by the regulatory bodies and government
authorities.
Strict consequences are imposed upon the defaulter
who indulges in corruptive practises.
In such situation it is the tendency of such defaulter
companies to claim innocence; however, with thorough
enquiry the regulatory bodies impose heavy fine upon
such defaulters, similar to the case here.

Introduction to themes in the questions that
appear in the case
The questions provided in the case study are
primarily based on ethics and morality.
The justifiability of the penalty imposed upon
Siemens is another theme that has been
enquired about.
The lack of adequate legislations in order to
protect business and the economy from
corruptive business practices is another
concern.
Lastly, the dilemma as to whether
normativism or relativism should be
emphasised on in case of dealing with
corruptive practices has been asked of.

Answer the questions that appear at the end of the case
The case suggests that ethical behaviour is of utmost
importance for all modern businesses.
Many modern countries lack adequate rules and
regulations that enforce issues of bribery and other
corruptive practices.
Siemens was penalized heavily quite a number of
times, by the U.S. authorities and the German Court as
a defaulter of bribing which was enough for the
company to learn its lesson.
In the global corporate scenario where several
corporate houses are the players in the market, it is
more suggestive that the emphasis should be on
relativism, in order to be fair, just and reasonable
towards all traders, irrespective of the size of the
business.

Conclusions
Therefore, from the given case study it could
be deduced that the lack of effective
regulations could lead to the occurrence of
repetitive corruptive business practices like
bribery.
Such cases should be dealt with relativism in
order to be fair and reasonable towards small
businesses who might get affected by the
corruptive practices of the corporate giants.

References
Siemens.com Global Website. (2019). About Siemens.
[online] Available at:
https://new.siemens.com/global/en/company/about.html
[Accessed 25 Jul. 2019].
Esterl, M. and Crawford, D., 2008. Siemens to pay huge
fine in bribery inquiry. Wall Street Journal, p.B1.
Berghoff, H., 2018. “Organised irresponsibility”? The
Siemens corruption scandal of the 1990s and
2000s. Business History, 60(3), pp.423-445.
The Independent (2019). Siemens bribery deal close.
[online] The Independent. Available at:
https://www.independent.co.uk/news/business/news/siemen
s-bribery-deal-close-1833088.html [Accessed 25 Jul. 2019].