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Siemens Bribery Scandal and Its Consequences Case Study

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Updated: Apr 13th, 2021

Summary of the case

The Siemens bribery scandal presents one of the most indignities that a respected organization can get into in order to gain market competitiveness. Prior to 1999, the company got into a series of bribing to different countries around the world so that it could win contracts and establish its market. Some of the key nations that were bribed included China, which received a bribe of $14 million, Israel obtained $40 million, Argentina received $40 million, and Bangladesh got $5billion. The total bribe is believed to be over $1.4 billion.

The problem of bribery for Siemens can be blamed on various factors ranging from the law in Germany before 1999 to Siemen’s poor business culture. The former has to do with the law that did not restrict giving bribes to foreign nations. Siemens greatly utilized this practice to the extent that when the law was scrapped in 1999, the culture was already deeply embedded in its system. It persisted with this practice and could easily admit that the money was used to keep its business going in several countries.

The scandal has so landed the company into deep trouble as it has been forced to pay a fine of $1.6 billion and an extra $1 billion to repair its compliance with international business processes.

What explains the high level of corruption at Siemens?

The extraordinary corruption levels at Siemens can be traced to the laws adopted prior to 1999 that gave room for the practice to thrive. Besides, it is also a factor that contributes to poor business culture. Its managers thought that the practice could help keep the business alive.

What would have happened to a manager at Siemens if he or she had taken a stand against corrupt practices?

Any manager who could have taken a different stand against the business culture could have faced strong resistance from other executives.

How does the kind of corruption Siemens engaged in distort competition?

The corruption at Siemens impacts competition as it locks out competitors wishing to participate in the same trade or nation.

What is the impact of corrupt behavior by Siemens on the countries where it does business?

The impact that stands out to a nation receiving the bribe is that it jeopardizes local jobs and makes citizens pay high costs for goods.

What would have done a fair manager at Siemens?

As a manager, the first step is to institute management change that is in tandem with national laws and good business culture.

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IvyPanda. (2021, April 13). Siemens Bribery Scandal and Its Consequences. https://ivypanda.com/essays/siemens-bribery-scandal-and-its-consequences/

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IvyPanda. (2021, April 13). Siemens Bribery Scandal and Its Consequences. Retrieved from https://ivypanda.com/essays/siemens-bribery-scandal-and-its-consequences/

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"Siemens Bribery Scandal and Its Consequences." IvyPanda, 13 Apr. 2021, ivypanda.com/essays/siemens-bribery-scandal-and-its-consequences/.

1. IvyPanda. "Siemens Bribery Scandal and Its Consequences." April 13, 2021. https://ivypanda.com/essays/siemens-bribery-scandal-and-its-consequences/.


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IvyPanda. "Siemens Bribery Scandal and Its Consequences." April 13, 2021. https://ivypanda.com/essays/siemens-bribery-scandal-and-its-consequences/.

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IvyPanda. 2021. "Siemens Bribery Scandal and Its Consequences." April 13, 2021. https://ivypanda.com/essays/siemens-bribery-scandal-and-its-consequences/.

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IvyPanda. (2021) 'Siemens Bribery Scandal and Its Consequences'. 13 April.

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