Report on Unethical Practices of German Corporations: Case Studies

This report delves into unethical practices within German corporations, specifically focusing on Siemens and Volkswagen. The analysis highlights Siemens' bribery and Volkswagen's emissions scandal, detailing how these actions damaged reputations and triggered governmental responses. The paper examines the German government's efforts to combat corporate corruption through anti-corruption programs, compliance initiatives, and value-based management systems, illustrating the importance of ethical values in business operations. The report references key academic sources to support its findings, offering insights into the complexities of corporate ethics and the measures taken to ensure transparency and accountability within the German business landscape. The report concludes by emphasizing the critical role of ethical values in aligning with governmental compliance systems.

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The aim of this paper is to discuss the unethical practice of the corporation of the
market of Germany that had affected the reputation of the government for not being able to
control the companies for doing such unethical practices. In this paper two German
companies namely Siemens and Volkswagen will be detailed. Both of these companies had
practiced corrupting actions to promote their brand as well as continue the profit making
mechanism. However, when revealed the government of Germany has shown concern about
its and used various laws to curb the growth of such unethical practices.
The first instance is related to the German car manufacturing company named
Volkswagen. This is however related to the actions of the company’s misleading product
information process. The company installed a hidden software to confuse the Environmental
Protection Agency’s pollution emission testers to believe that all the cars are environment
friendly. In this regard, the cars were made to befool the customers as well as the government
to accept the trick of software unconditionally (Theconversation.com 2019). This led to the
lawsuit against the company in 2015 when the case of using unethical software in practice
was revealed. This led the company to face the loss of $20 billion in the market capitalisation
and badly hit by the negative publicity.
The second example is associated with the corporate misbehaviour of Siemens which
is again a German company. This particular German multinational conglomerate company
and the largest industrial manufacturing company in the continent of Europe. Along with the
industrial manufacturing, the company has served the sectors of healthcare, energy and
infrastructure and cities. This make the company to be highly reputed in the market of the hoe
country along with the other countries of the world. This reputed company had been accused
of encouraging the corporate misbehaviour for years until it was revealed (Kaplan 2017).
This particular German conglomerate has admitted using a wide ranging system of bribes to

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achieve the business and profit goals. This led the company to face the $1.3 billion legal
settlement in 2008.
The German government has taken all the needed initiatives to reduce this type of
unethical incidents by the German corporations operating in the global business. The
government has introduced anticorruption programme by taking general precautions (Trevino
and Nelson 2016). This has aligned the government of Germany with the other countries of
the world to fight against the corruption like bribery and breach of corporate commitment and
transparency. The anticorruption programme include assessment of the company and
markets, prevention if the corruption offences, promotion of the corruption detection in the
companies, responses and sanctions after the detection of the corruption (Crane et al. 2019).
Compliance program initiated by the government of Germany, has effectively expanded to
the small and medium enterprises to the large corporations. Thus the ethical values to the
companies in the country has gained importance on the areas of unethical practices in the
firms that align with the German government’s value based compliance management
systems.

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References:
Crane, A., Matten, D., Glozer, S. and Spence, L., 2019. Business ethics: Managing corporate
citizenship and sustainability in the age of globalization. Oxford University Press.
Kaplan, A., 2017. European management and European business schools: Insights from the
history of business schools. In Management Research (pp. 211-225). Routledge.
Theconversation.com (2019). Merkel and Schulz must face up to Germany's blind spot on
corporate corruption. [online] The Conversation. Available at:
https://theconversation.com/merkel-and-schulz-must-face-up-to-germanys-blind-spot-on-
corporate-corruption-83940 [Accessed 9 Sep. 2019].
Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to
do it right. John Wiley & Sons.