The ethical dilemma: Siemens Case Study

May 17, 2021 by Essay Writer

The costs and benefits of bribery

The ethical dilemmas identified in the Siemens’s case study are conspiracy, fraud and false statement that have negatively affect such parties in the form of bribery. Based on the code of ethics, the parties should exercise integrity when reporting accurate information to all stakeholders.

Moreover, good moral ethics define objectivity and motivation in maintaining trust in interaction. Unfortunately, this is not the case in the Siemens’ situation. The bounded bribery tends to justify unethical behaviors as stimulated by psychological tendencies and organizational pressure within the Siemens Company.

In relation to the above dilemmas, the bounded bribery applies to the psychological tendency of the conspirators to fulfill selfish interests of self enrichment at the expense of the shareholders’ goals and objectives. Specifically, due to their top hierarchy in the authority ladder, they succumbed to incentives of power and deviated from discipline, responsibility, and sincerity undertaking their duties.

Bribery is characterized by inflating the asset values, overstating the reported income and cash flow and eliminating the liabilities off the financial records. These events may make a company to go bankrupt. Siemens’ bribery scandal resulted in a massive loss that had never been experienced in the history of the United States of America and Germany at that time.

First, shareholders of the company lost several billions of dollars as a result of the falling share prices in four years. Secondly, Siemens’ creditors and energy entities incurred hefty losses (Sinclair 46). The employees also suffered losses resulting from the loss in value of the shares. The total market failure that resulted from the Siemens’ scandal amounted to several billions of US dollars.

Nature of the FCPA punishment

A number of analyses have been carried for the Siemens’ scandal. This can be attributed to the fact that it impacts heavily on the economy. The analyses revolve around the causes and effects of the scandal. For instance, analysis carried out by the US Federal aimed at improving accounting and auditing profession and also to mitigate the risk which stakeholders are exposed to.

Thus, the punishment by the FCPA was appropriate considering the size of the company. Basically, ethics denote set of laws or moral systems that provide a basis for discerning whether an action is correct or erroneous. Therefore, members of a profession can come up with ethical principles that guide them when carrying out their duties (Devito 19).

The five common ethical principles are “independence, integrity, responsibilities and practices, competence and technical standards, responsibilities to clients, responsibilities to colleagues, and other responsibilities and practices” (Anthony 10). Since the company was aware of this provision, the punishment was right in checking negligence and irresponsible business practices.

From the case, it is evident that the two parties used information that was not known by the entire public to obtain undue benefits. In their actions, there is an outright breach of the professional ethical code of conduct such as integrity, confidentiality, professional due care, and professional behavior. This calls for even harsher punishment than that which was imposed by the FCTA on the Siemens Company.

Fining Siemens and other measures

Considering the nature and magnitude of unethical business practices, the Siemens Company should be fined to a tune of more than 3 billion dollars. This fine is heavy enough to motivate the company to promote healthy work culture. Besides, the fine will ensure that the company becomes more accountable and structural in addressing its ethical dilemmas through ethical models. These models define expected behavior, procedural patterns, and response to every deviation.

As a matter of fact, stable mind performs optimally with little or no supervision. In line with this, an organization will always work alongside its staff to promote healthy communication ethics by recognizing and where necessary, supporting staff that make steady commitment in practicing accepted desirable healthy organizational communication ethics in their work departments (Bustin 21).

Besides, Siemens Company should remodel its organizational and leadership ethics which determine the level of participation by the employees who after interaction with each other identify hale and hearty workplace interventions. These interventions are passed through a feasibility test for implementation to initiate cultural shift in the organization. Besides, communication ethics define content policy based on the need to address work related habits in order to strike a balance on environmental friendly work place in practice.

The target of this policy implementation is the entire hierarchy of staff members from the top management to the casual laborers at bottom of the ladder. As a result of properly structured communication ethics, the work environment becomes holistic, soft and socially friendly to the staff. Besides, healthy ethical communication culture creates structural goals which develop norms, expectations of specific behavior display, and appropriate guideline controlling interaction with one another.

The “bad apples” or a “bad barrel”

From the above reflection, it is apparent that the organization culture at Siemens is wanting. This organization culture lacks defined structures for monitoring activities of the employees besides reinforcing healthy work ethics. Basing on LPI assessment, the organization has not strived towards development of the following five personal competencies. First, every individual should be a role model of the other.

Besides, they should develop self-confidence by elucidating own individual values. This is possible through setting good examples through conforming to shared values of the team. Secondly, the team needs to enliven a common vision. Indeed, they should visualize the future through perceiving to achieve pleasant and excellent possibilities. This is within reach through interaction with various project matrices to achieve common objectives that are important in execution of the project at hand.

Thirdly, the team should create learning environment through challenging inspiration team work. Moreover, people like to take risks in order to learn through experimentation. Therefore, project execution will be made possible through making mistakes that can be tracked within the small workforce.

The team should promote collaboration through embracing team work. This is helpful not only to restore trust amongst individuals but also to support people by sharing common objectives. Lastly, the team should appreciate and encourage each member’s determination and contribution towards the project goals. Unfortunately, none of the above elements is properly aligned in the organization culture of the Siemens.

In any ethical organization, the ideal perspective would by a commitment to fairly develop ethics after a great improvement in response channel. Ethical considerations are observed at educational level, executive management level, and the government and private stakeholders.

The major concern has been with the integrity of seniors in the Siemens organization who were reportedly involved in big scandals. These scandals range from abuse of power, bribery and embezzlement of the company’s funds due to lack of a structured and systematic system for regulating activities of the employees (Bustin 31).

As an ethical reassurance policy, the company should carry out psychological test in the employees’ selection procedures. Indeed, psychological test is focused on certain aspect of applicant’s performance, behaviour, and attitude since management position is associated with decision making and calmness under pressure.

Psychological test is important when the number of candidates is large in order to reduce it. Psychological test is able to show applicants who scored above a certain fixed mark and assumption is made that they are possibly good performers than those candidates who attained below the mark limit.

The part of principles will encompass laid down rules to enable the organization to be more efficient. This will be in the form of a well organized hierarchy of workforce from management with administrative roles to service providing worker.

Managers are empowered by the organization’s constitution to perform the role of prefects and offer leadership solutions upon consultation with one another. To control group behavior, desirable leadership attributes are necessary, which are possessed by the managers gained over time in experience (Sinclair 23). Management plans, tests and implement company policies in line with the preset ethical goals. As human nature dictates, the above philosophy carries with it enticements.

When these are timely offered, they may lead to a deep attachment with the object over which such a motivation token is given in a strategically planned communication model. Motivation can be in the form of behavior review and increment, recognition for a well performed duty, equality, and fair treatment. Whenever there is a strong professional relationship nurtured on the values of appreciation and respect, hidden talents are easily displayable and are needed for organizational ethical sustainability.

Works Cited

Anthony, Phillip 2010, Insider Trading in Financial Markets: Legality, Ethics, Efficiency. PDF file.

Bustin, Gerald. Take Charge: How Leaders Profit From Change. Irving, Texas: Tapestry Press, 2004. Print.

Devito, Lynne. Human communication: New Zealand Edition. Auckland, New Zealand: Addison Wesley, 2006. Print.

Sinclair, Michalel. Fear and Self-Loathing in the City: A Guide to Keeping Sane in the Square Mile. London: Karnac Books, 2010. Print.

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