Corruption in the IT Branch – The Example of Siemens

Abstract

In 2006 the German-based electronics company Siemens faced widespread corruption and bribery allegations. Investigations of the German state attorney’s office disclosed an amount of more than 2.3 billion of suspicious payments to foreign governments (Schubert & Miller, 2008). It turned out that Siemens had bribed governmental officials in order to secure contracts and to obtain favorable conditions over more than three decades (Schmidt, 2009). Though Siemens had a clearly stated anticorruption policy this did not prevent the company from getting involved in one of the largest corporate scandals in German business history.

A deeper analysis of the scandal reveals at least four fundamental shortcomings which enabled the corrupt practices on all organizational levels. First, most of the managers saw no alternatives to secure their foreign business, especially in countries where bribery payment has been a widespread practice. Second, the managers had created misguided bonds of loyalty believing that personal engagement in the corruption scheme was part of their dedication to the company. Third, due to corporate routines and commonly accepted practices, most managers lacked a clear sense of reality seeing corruption as part of the regular business at Siemens. Fourth, poor governance structures and a lack of clear regulations for doing business in a corrupt environment made it easier for managers to bypass official regulations.

Citation

Aßländer, M.S. (2017), "Corruption in the IT Branch – The Example of Siemens", Aßländer, M.S. and Hudson, S. (Ed.) The Handbook of Business and Corruption, Emerald Publishing Limited, Leeds, pp. 209-236. https://doi.org/10.1108/978-1-78635-445-720161023