1.
• In your opinion, is “bribing” unethical & illegal or just a cost of doing business? Discuss this in light of Siemens’ bribery scandal.
We believe that bribing is unethical because it takes away the fairness of a business transaction between bidders of a contract. Bribing also has a negative impact on competition because it allows for oligopolies and monopolies to emerge in an industry due to smaller competitors being unable to financially compete with the amount of the bribes. This in turn creates a barrier for entry for prospective companies and promotes the oligopoly or monopoly in place. The lack of competition affects consumer choice by reducing their options which then stifles innovation within the industry as there is no
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By offering a larger bulk order discount or other forms of compensation such as a royalty after a set number of units sold. This shifts the bribe from an illegal under the table pocketed amount of cash to an above the board legal bonus contingent on performance. Offering outstanding business intelligence skills is the ability to transfer organizational skills to better manage costs, strategies, and tactics in developing quality products and services in the foreign country. The transfer of these skills will most likely develop a long term relationship between the company and the foreign nation it operates in. In addition, companies value intelligent partners. With this in place, companies can stand out with this knowledge or expertise.
2.
• Was the board right in not extending Kleinfeld’s term, especially in view of his over performance as a CEO?
The decision to refrain from extending Kleinfeld's term was undoubtedly a difficult one for a number of reasons, however it was the right decision given the awkward circumstances surrounding his term as CEO. The primary concern with this decision was that Kleinfeld had brought many benefits to Siemens in a short time. In just two years under his direction Siemens' stock price shot up and there was a shift in the way the company did business as the importance of Siemens' customers was stressed as equally
The major dilemma at hand is avoiding a takeover. The economy was bad at the time, and the company's stock price was thought to be undervalued, as their low P/E ratio of 13.3 indicated. Management needs to find out why their stock price is so undervalued.
In March of 2012 Steve Parkland was hired as the new president at Charles Chocolates. He was immediately faced with numerous decisions about the future of the company. The board of directors had tasked Parkland with doubling or tripling the size of the company over the next decade, but the board and the senior management team had different opinions about the strategy that would accomplish this goal. The main issues that Parkland faced were how to increase the company’s operations while maintaining the traditional culture and support of the board.
According to LawyerShop (2012) bribery is defined as a while collar crime in which money is given in order to receive preferential treat and/or to sway decisions, views, and opinions in favor an organization.
When Knudstorp became the CEO, the company was with negative cash flow and the real risk o which would have even led to a breakup of the company.
This case portrays the widely propagated and accepted phenomena of bribes and corruption in developing countries. Specifically how it affects every sector of the Ukrainian society, therefore making it difficult for the American investors to establish companies there and to prosper solely on doing good business. The case describes the types of obstacles and ethical dilemmas being created for the investors as a result of bribery and extortion.
Bribery weakens competition and diminishes free trade which can affect companies, shareholders, and stakeholders. Jacob Franklin knowingly extended bribes to governments and contractors while knowing it was against company policy. Jacob engaged in bribery even though he knew it was wrong because he was advised that it was common practice at Richard Drilling. “In 1977, President Carter signed the Foreign Corrupt Practices Act (FCPA). The law made it illegal to bribe foreign officials. The maximum punishments for violators were set at $100,000 and 5 years in jail. Companies can be fined millions” (Bredeson, 2012, p.301). Not only was extending the bribe against company policy, it was against law and could cost Jacob and Richardson Drilling money and freedom.
(Wells, 2011, p. 241). Bribery can come in many different forms but generally is defined as an act in which something of value is offered, given, received or solicited with the intent of influencing an official act. Illegal gratuities can be similar to bribes except these are usually given as a reward. Economic extortion is basically the demanding of money. “A conflict of interest occurs when an employee, manager, or executive has an undisclosed economic or personal interest in a transaction that adversely affects the organization.” (Wells, 2011, p. 242). These are not all corruption schemes that exist but have been determined to be more common than others and ones that should definitely be watched for when completing an audit or a full financial status review.
If we look at history, particularly the nineteenth century, we can obviously say that bribing was one of the most used tactics. It was the fastest way to have decisions approved, but nowadays, it is very dangerous for interest groups to use any sort of sinister method. In general, the groups tend to abide by the law to give legitimacy to their claims. Moreover, with the 1995 Reforms, the Lobbying Disclosure Act allows congress to scrutinise the activities of interest groups and the interest groups must report all the information relating to their activities in a very clear and concise manner. But we will see later, that sometimes,
Corruption schemes have differences as well as similarities. Bribery is a scheme that impacts a legal deed by proposing, providing, obtaining, or lobbying something of value to change the outcome in a favorable fashion. On the other hand commercial is similar in that something of value is offered in exchange for a certain business decision. Illegal gratuities are perks given as a reward to an employee in exchange for a decision. Most of the time illegal gratuities influence employees to make decisions not in the best interest of the organization. Economic extortion has to do with an organization or individual making a payment that will bring unwanted attention or impairment to the organization. These types of corruption schemes are very similar; however the differences exist in the conflicts of interest. Conflicts of interest occur
Scott Nette in his article "The Home Depot: Too Many Bribes for One Company" describes the case of four purchasing managers caught accepting bribes.
I believe that Harnischfeger’s management strategy was a good idea. It provided motivation and showed, through the financial statements, that the company was able to make a profit again. Since the company increased net income this may lead investors to believe that the changes are part of a forward looking business strategy and could increase the company’s stock price . It does seem very suspicious that all of these changes occurred within a year and I think this will raise a lot of questions with their investors. The investors might think that the company is trying too hard to make their financial statements look good by their 100th anniversary. Investors might also find out that a lot of this motivation will come at a large cost, with having the top executive officers have incentive compensation. Investors might also be concerned that the company is decreasing the amount of R&D spending, but still trying to explore different high technology product lines and services. I would have thought with trying to do this they would want to spend more money on R&D. A final thing investors might notice is the extension of deprecation lives for their plants, machinery, and equipment. Although this is being done to increase their net income, this might not be such a smart strategy for the company.
some difficult decisions. Only eight months into his job as chief marketing officer (CMO) of GE’s
Within two years, DecisionTech, Inc. had built a reputation as the top technology company in the country. They had a strong business plan that would lead them into the next stages of new technology and investors were lining up to get a piece. Furthermore, they had young qualified engineers submitting resume’s regularly in hopes of employment. However, after a while, their executive team developed internal conflict and was unable to lead this bright and promising company to the next stage. Word of these actions had circulated and the company had now become known for having personal political agendas and backstabbing; therefore, the Chairman of the board demanded change.
1. How difficult was the task facing Immelt assuming the CEO role in 2001? What imperatives where there to change? What incentives to maintain the past?
This does not set a good example for the employees and can be harmful to the future of the company. Ensuring that bribery stops can solve many of the problems discussed above. Some feasible solutions are being recommended to help the company in both short term and long term. First of all, all employees including managers should be given training and education about bribery, corruption and what’s deemed illegal according to the law. Explicit measures should be suggested on how they can avoid supporting corruption and also where they can report to in case a situation where dishonesty is involved arises.