Corruption at Siemens (B)
In November 2006, 200 German policemen and prosecutors raided 30 offices and homes 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 admitted to having identified dubious payments amounting to €1.3 billion from the years 1999 to 2006.
As a result, Siemens replaced all but one of its managing board members. At the end of July 2008, a former sales manager at Siemens’ telecoms division, Reinhard Siekaczek, was convicted for his role in setting up the slush funds used to win contracts.
In the B case, he shares his insights about the Siemens corporate culture, his lessons from the trial, and the pros and cons of the slush fund system he created.
Introduce students to the issues surrounding corruption in international business.
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