Business Ethics Case

     SIEMENS : JUST BREAKING THE ELEVENTH COMMANDMENT

1. What are the main individual and situational factors encouraging the alleged bribery at Siemens? Which, in your opinion, are the most important?

Individual factors and situational factors play an important role in the ethical decision making in the organization. Individual factors include age and gender, National and cultural characteristics, Education and employment, Psychological factors, Personal values, Personal Integrity, Moral imagination.

While situational factors comprised of Issue related and Context related factors. Issue related factors include moral intensity and moral framing. Context related factors include Rewards, Authority, Bureaucracy, work roles, Organizational culture, National context.

Analyzing the case of Siemens, we encountered a mix of individual and situational factors.

A. Organization cultures: Initially it seems that the cases of corruption were related to some individuals in the organization, who wants to gain financial benefits from the deals between the organization and the concerned party. But soon it has been unearthed that that bribery was the accepted culture of the organization. People in the organization believes it as one of the necessity to get the contract.

B. Bureaucracy and National context: Siemens is the organization which fought for the contracts related to the government contracts such as railway project, mobile phone networks, Hospital equipment. These are the contracts which generally perceived as the contracts in which a due favor of the bureaucracy is required. Also in the developing countries, such culture is generally accepted because of poor governance and low accountability mechanisms.

C. Work Roles in the Organization : Siemens is the organization which is highly decentralized in its own way. Generally, all the decisions taken by the executives are in a context of achieving the goals with respect to that particular country. It also helps them to develop the local contacts and thus involved in alleged bribing.

D. Rewards : Reward theory plays an important role in the decision making. Most of the individuals then hardly concerned whether that decision is ethical or not. Involving in the corruption activities generally provides a quick gain in the short span of time. Siemens employee is also of the view that the corruption is an acceptable game strategy in business.

E. Psychological Factors : Psychological factors also plays an important role in the Siemens corruption scandal. Top executives and the employees are of the view that the corruption is ingrained in the system itself. And now it is not possible to separate it out from the usual business activities. Thus they think in a way that whatever they are doing, it is right in its own sense.

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