Create a 2 pages page paper that discusses siemens bribery scandal. Siemens bribery scandal The Munich based company Siemens was found involved in the acts of corruption in that it bribed workers of other companies for contracts. After the charges were confirmed, the company agreed to pay up to €1 billion to get the charges of corruption settled. This paper tends to find if an adequate system of checks and balances was in place in the company that might have failed because of certain reasons.

The minority shareholders at Siemens have demanded the resignation of Heinrich von Pierer, the supervisory board chairman and CEO of Siemens for the period between 1992 and 2005. Increase in the number of executives that have knowledge of the corruption that took place in Siemens has caused a spur in people regarding the extent to which von Pierer was aware of the corruption. However, the supervisory board chairman has maintained a firm opinion in these words, “Im deeply upset by what has happened” (Spiegel Online, 2006) and is surprised by the fact that few of the workers managed to eradicate all checks and balances. “It is hard to believe that something on this scale could be so organised and that no control was in place to catch it” (PILOT, 2012).

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However, there is a need to consider this act of Siemens in context of the business practices in place in Germany. This act happened at a time in which, bribery was not only a common practice in the businesses in Germany, but were also tax-deductible. The fact that Siemens appointed Hershman for the company’s assistance in the development of an effective anti-corruption program after the scandal of Siemens bribery broke out also speaks of the fact that no adequate system of checks and balances was in place in Siemens at the time when the bribery was made. Multinational corporations like Siemens are well-equipped to establish a strong system of checks and balances. Therefore, lack of an adequate system of checks and balances can be understood as ignorance and negligence of the concerned authorities in Siemens.

“Corporations are better positioned to deal with corruption than governments, particularly publicly listed multinationals. They have lots of checks and balances that should prevent corruption. When we bring multinationals together with other private sector companies to work in collaboration, we can start putting pressure on governments to help lower their risk of corruption.” (Hershman cited in Kessler, 2012).

Concluding, the processes of check and balance were extremely feeble and this helped the processing of payments. The corporate culture of Siemens has derogated to the level that it is not only tolerant of such acts of bribery, but also encourages the staff to indulge in such acts as a symbol of their loyalty with the company. It is clear that the company did not mind paying money as part of the tax-deductable counseling contracts, though lack of an adequate system of check and balance enabled the personnel to pay money on such counseling contracts that were not tax-deductable. Nevertheless, it is not rational to attribute this act completely to the individualistic corporate culture of Siemens as bribery is not very uncommon to occur in the German business.

References:

Kessler, B 2012, Busting Graft For Profit, viewed, 18 March 2012, .

PILOT 2012, Siemens – from systematic global corruption to international best practices & lessons learnt, viewed, 18 March 2012, .

Spiegel Online 2006, Executive Arrested, Calls for Board Member to Resign, viewed, 18 March 2012, .

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