Siemens, an engineering company, continues to make significantstrides in the technological realm due to its successful brand. Thecompany is a major key player in digitizing, automation, andelectrification of devices and appliances across the world. It has aworkforce of more than 400,000 employees who are spread out in theiroffices worldwide. Having such a wide presence in the world and alarge workforce behind the company, it faces challenges in themanagement and implementation of its code of ethics. This essayassesses the code of ethics of Siemens while critiquing some of itsprovisions that may undermine standard ethical requirements of such acompany.
Siemen’s code of ethics
The need and ability to meet legal considerations in alljurisdictions that the firm operates in is a significant ethicalprovision that the company strives to meet. The legal compliance withthe rules of any country where the firm operates is a good way toestablish better relationships with governments and final consumers(Corporate Compliance Office, 2009). All employees of the firm areexpected to adhere to this principle and follow the laws and policiesset by both the respective jurisdictions and the enterprise.According to Wenzhong & Limin, (2012), there have been cases suchas the ethics issue in Argentina where the company employees werefound to be violating the laws of the country (Foreign CorruptPractices Act). The prohibition of bribery and corruption is also oneof its core ethical provisions. The firm’s code of ethicsstipulates that it will not tolerate any form of bribery that is madeto a government official as a way of conferring benefits matchingtheir interest. Despite these strong claims in their code of ethics,the company has been unable to effectively administer and implementthis code.
The company was rocked with a scandal in 2006 involving thecooperation between the company’s employees and other corruptgovernment officials. This scandal ended in 2011 after the Securitiesand Exchange Commission found that seven of the company’sexecutives were guilty of engaging in foreign corruption in Argentina(Wenzhong & Limin, 2012). These executives had issued a number ofbribes for the company to retain a government contract for producingnational identity cards. This contract was worth more than $1 billiondollars. The firm worked with the relevant authorities to resolve thematter and reduce its impact on their consumers. As much as thecompany took swift measures to resolve the matter, questions arise tothe implication of the firm’s implementation of policies. While thecode of ethics strongly prohibits corruption, it has been unable tofully implement this code. The implementation mechanisms of thecompany’s code of ethics have thus failed to prevent corruption andbribery in the enterprise.
The handling of information in the company is also a significantcontribution to the ethical provisions of the firm (CorporateCompliance Office, 2009). Data from the company, especially financialinformation should be handled according to the specifications andauthorization of the managers. Financial integrity, openness, andaccountability are expected from every employer in the firm. Theapplication of this code of ethic has partly been unsuccessful due tothe lack of financial transparency that was witnessed in theArgentine case. A number of transactions were approved by thecompany’s executives to top government officials in exchange for acontract (Wenzhong & Limin, 2012). The inability to foresee theoccurrence of these transactions and to stop them shows the inabilityto regulate their code of ethics. Schnebel &Bienert (2004) positthat while it is important to outline the rules and codes of ethicsof the company, it is equally important to regulate and assess thefunctioning of these codes. Siemens needs to incorporate technologythat would assess the implementation of these codes of ethics andprevent activities that would go against the company’s codes.
Corporate Compliance Office (2009) asserts that the preservation ofthe environment, work health and safety are also key priorities inthe code of ethics of the company. While many technological andfashion firms have been caught up in a number of scandals regardingthe work safety of their clients, Siemens has largely prevented this.The company ensures that the working conditions of their employeesare of the acceptable standard.
Siemens has a number of provisions in their code of ethics that helpto steer the direction of the business. These include meeting legalconsiderations, accountability and transparency, prohibition ofbribes and corruption, proper handling of information and thepreservation of the environment. An analysis of the code of ethics ofSiemens reveals that while the company has an excellent framework oftheir codes of ethics, the implementation of these ideas have largelyfailed. The company has failed to regulate and control the actions oftheir employees which have had a major impact on the business. TheArgentine scandal that involved the bribery of top governmentofficials by the executive employees of the government shows theinability of the company to implement its principles against briberyand corruption. The company has shown to have an excellent frameworkof their code of ethics and an improvement in the regulation,implementation and analysis of these codes will improve their ethicalaccountability.
Corporate Compliance Office (2009), Siemens Business ConductGuidelines, Siemens AG.
Schnebel, E., &Bienert, M. A. (2004). Implementing ethics inbusiness organizations. Journal of Business Ethics, 53(1-2),203-211.
Wenzhong, Z., &Limin, F. (2012). A Case Study of Siemens’Violation of Business Ethics in Argentine Based on StakeholderTheory. Global Journal of Management and Business Research,12(13).