Corruption At Siemens (B) Harvard Case Solution & Analysis

IMD-1-0282 © 2009
Hamilton, Stewart; Eckardt, Anna

In November 2006, prosecutors and 200 German policemen raided dwellings and 30 offices of Siemens managers to investigate allegations of embezzlement at Siemens’ fixed-line phone unit. In the wake of internal investigations started at the end of 2006, Siemens finally acknowledged to having identified suspicious payments amounting to €1.3 billion from the years 1999 to 2006.

Because of this, Siemens replaced all but one of its own managing board members. At the conclusion of July 2008, a former sales manager at Siemens’ telecoms department, Reinhard Siekaczek, was convicted for his part in preparing the slush funds used to acquire contracts. In the B case, he shares his lessons from the trial his insights about the Siemens corporate culture, as well as the benefits and drawbacks of the slush fund system he created. Learning objectives: Introduce students to the issues surrounding corruption in international business.

Subjects: Siemens; Bribes; Slush funds; Corruption; International business; Laws and regulations; Business ethics; Moral relativism
Settings: Germany; Multinational conglomerate; 470,000 employees worldwide; 2008

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