Corruption and rationalization in the Siemens bribery scandal

Siemens Bribery Scandal

The high level of corruption at Siemens and its rationalization by managers

One of the main factors that sheds light on the high level of corruption at Siemens is that from the outset, bribing officials was acceptable and considered as an expense within the business. However, when the rules and regulations were altered, Siemens failed to adhere to such transformation and went on with bribery. More so, the managers engaged and took part in these corrupt activities as they went on to put into place different ways in which they could conceal their illegal activities and actions. Top management at Siemens forced concerned personnel to sign conformity agreements so as to hide their bribery actions as these were essential to sustain current profit levels (Ewing, 2008; Watson, 2013). Watson (2013) in his article asserts, "Siemens is well versed in the high cost of corruption: in 2008, following a string of high-profile bribery scandals, it agreed to a record 1.6 billion U.S. dollars with American and European authorities." With regards to the corruption involvement and rationalization of Siemen's top and middle management Watson (2013) writes, "The scandal provided the necessary sense of urgency in the company's ranks, and the new CEO set out to reorganize the top three levels of management, replacing between 40% and 80% of executives in each."

Implications for managers for taking a stand against corrupt practices?

Taking into consideration that Siemens seems to have perceived bribery as an essential part of attaining the contracts it required to remain in business, it can be concluded that a manager who took a stand against the practice would most likely have been terminated or in the least, transferred to a less important low level position. This is because corruption had become so engrained and entrenched within the business to the extent that taking a contrasting and opposite stand would be perceived hostile and therefore taken in an extremely bad way.

Distorting competition by engaging in corruption

It is imperative to note that through bribery, the rivaling companies to Siemens ended up being blocked to attain contracts. Taking into account that these other companies that contested with Siemens did not take part in bribery, thus were not able to generate any serious competition and were incapable of attaining the proper parties or entities that Siemens did. Therefore, the manner in which Siemens steered its business operations did not result in impartial competition (Schubert and Miller, 2008).

The impact of Siemen's corrupt behavior on countries it engages in business

The corrupt mannerisms of Siemens did have an influence on the nations where it conducted its businesses. To begin with, as a result of contracts obtained through bribery, this implied that the local people in these nations ended paying more than usual for services. Therefore, the price paid became much higher than usual. In addition, another impact is that Siemens instigated such practices in these nations.