What does the case suggest is the value of ethical behavior? What did Siemens gain by introducing controls to minimize the likelihood of corruption? The case suggests that while it may be tempting in the short run to engage in unethical business practices, in the long run it is essentially bad business. Siemens was involved in a large amount of corruption and bribery all over the world. While this did increase their profits, it ultimately led to a public image, millions of dollars in fines, and even jail time for some employees.
Siemens had to work hard to bounce back from such a setback. However, the hard work has paid off, now that Siemens has more control over their international subsidiaries and a ethical code of business. 2. Most countries lack adequate laws or enforcement to deal with bribery and other forms of corruption. Why is this? How do countries benefit from a strong rule of law that minimizes corruption? Many developing countries do not have the legislation or the infrastructure to combat corruption. This is most likely because they have an ineffective or even corrupt government.
Companies that engage in unethical activities may be drawn towards countries with weak or compliant governments that can be controlled or bought. While a company may provide jobs for these developing countries, if there is a lack of competition, bribery, or other forms of corruption taking place, all of the benefit generally goes to the company and not the workers. Without the proper legal system to outlaw this kind of corporate behavior, citizens may find themselves stuck with unethical organizations. 3. Do you think Siemens was penalized enough for its corruption?
Why or why not? What can governments or other organizations do to discourage firms and others from engaging in corrupt behavior? I do believe Siemens was adequately punished for its corruption. While some of the penalties may be considered modest, I do not believe it’s about giving the harshest punishments, rather the focus should be “what do we need to do to convince this firm to change its behavior? ” We should absolutely imprison those who commit illegal activities, but there is nothing to gain from completely dismantling a large multinational organization.
It seems to me that the penalties did force Siemens to change its corporate culture, and that is what is most important. That being said, it is the government’s responsibility to ensure that corporations fall within the legal guidelines, and other organizations should promote ethical behavior so it becomes a benchmark for other firms. 4. Some argue that because ethical standards are lax in many countries, Siemens and other firms must pay bribes to obtain new business. Do you agree with this view?
Stated differently, when doing business around the world, is it generally better to emphasize normativism or relativism? Justify your answer. At this time, I believe it may be necessary to engage in cultural relativism to a point. We may have to suspend certain ethical standards when dealing in foreign countries. This is partially to ensure that we can compete, but in the long run we can also facilitate the changes that we desire once we are involved. It is nearly impossible to change cultural values as an outsider to a culture.
However once we become intertwined with a culture, we can suggest that some practices are unhealthy or unethical and change the system from within. While this may be considered Americanization, I do believe this goes both ways. America is not ethically perfect. We can learn many things from other cultures. It is important that we constantly look at ourselves in the most objective way possible and ask “Am I behaving ethically? ” and sometimes the only way to do that is by bringing in outside help.