Siemens case study
Siemens is a global German conglomerate Corporation founded in October 1847 by Werner von Siemens and Johann Halsky. It has its headquarters in Munich, Germany. The company started with invention of telegraph and in 1848 the company built the first long distance telegraph line in Germany revolutionising the telecommunication industry. By 1907 Siemens was the seventh largest company in Germany. The current form of logo for the company was introduced in 2001 ‘Global network of Innovation’ as Siemens employees made 34 inventions per day on an average.
Now after several acquisitions the company has its place in various industries including wind power, Gas Power ,Energy Management, transportation, Healthcare, automation, electronics, electrical engineering, home appliances and more it is currently the largest industrial manufacturing company in Europe. Siemens is also the #1 top regarded company in the world according to Forbes but it lost its reputation due to the bravery and money laundering case of few years back.
Bribery is the act offer a receipt of any gift, loan, fee, reward or other advantage two or from any person as an inducement to do something which is this honest illegal or breach of trust in conduct of business enterprise.
It revenues in excess of 80 million for the last 3 years, it also developed a corrupt organisational culture in which hundreds of millions of euros were put into slush funds that were then used to make bribes in order to obtain lucrative contracts in November 2006. The auditors completed a confidential report that detailed a number of payments that were impossible to verify. They could not identify who received the money or what services were provided, the suspicious payments made from 2001 to 2006 totaled 1.3 billion Euros in January 2007 and the company paid of 418 million fine to the European Commission because the company was accused of hitting a hotel that was dividing at the market for Power Station equipment in October 2007. The company paid 201 million fine related to bribery in its Communications equipment business, various senior executives were cues of committing bribery and these executives executed and was resigned so that brings us to the question that why did executive ignore the anti bribery resume and looking at the Siemens business conduct guidelines it had a very clear anti bribery provisions and these work as agents agreeing to comply with the requirements of the Anti Corruption laws applicable to the parties. Another provision rate that no employee may directly or indirectly offer or grant unjustified advances to another in connection with the business dealings non monetary in form, no some other advantage so despite these policies no appropriate action was taken against the perpetrators. The Siemens business conduct code was effectively a paper program and ineffective to stop in corruption. Siemens also had a corporate culture which held the following believes when it came to bribery and corruption; firstly, every one does it and its simply part of doing business in some countries, secondly I did it for the company I didn’t put any money in my own pocket, thirdly we are having these problems only because Siemens is listed on the New York stock exchange and finally the US Government did support siemens competitors especially General Electric.
The executives and the employees that were into these formats be simply as not hold true in a world of anti corruption so the CEO did show that there is a zero tolerance policy and the steps will be taken by Siemens was similar corporate with the authorities and the company was fully Cooperative in all phases of the investigation with law enforcement fighting any criminal charges would be imprudent giving the growing volume and every evidence against the company so resolving the criminal investigation would help siemens from a reputational and a financial perspective so in essence Siemens was very transparent and disclosed all the information to the reporters of justice and ACC. Secondly, Siemens started an independent investigation it appointed independent Advisors to lead the image investigations to conduct an independent and comprehensive investigation to determine where the Anti Corruption regulations have been violated and to conduct an independent and comprehensive assessment of the compliance and control systems of the Siemens. They appointed a premier law firm and the Deloitte forensics to lead these investigations.
Siemens also set up an internal investigations project in office to ensure the success of the investigation and the company set up an Amnesty program for current and former employees to gain additional information and evidence it which can be implemented for an effective corporate compliance program and also a written and dependent complaints monitor for 4 years, first the scandal to receive the continuous in evaluation of the compliance Siemens implemented anti corruption training programs, the company introduced and all en-compassing anti corruption handbook and also implemented a whistle blower line the catalyst internal audit function and internal policies and procedures. The company failed but implemented a supplier code of conduct so that suppliers share similar values and compliance issues to Siemens and finally the company brought in a disciplinary program to evaluate allegations of misconduct and to determine appropriate disciplinary actions.