At Siemens, Bribery Was Just a Line Item

The New York Times ran an in-depth look at how entrenched corruption had become at the multi-national corporation: At Siemens, Bribery Was Just a Line Item.

For his part, Mr. Siekaczek is uncertain about the impact of the Siemens case. After all, he said, bribery and corruption are still widespread.“People will only say about Siemens that they were unlucky and that they broke the 11th Commandment,” he said. “The 11th Commandment is: ‘Don’t get caught.’ ”

As Chris MacDonald at The Business Ethics Blog points out:

When you pay a bribe, you’re attempting to induce someone to make a decision that is favourable to you, rather than a decision that is favourable to their employer. Perhaps that moral argument is obvious to everyone. The less-obvious point, perhaps, is that bribery also represents an unwanted expense for companies…an expense that all companies would like to be able to avoid, if they could. Paying bribes only works if you out-bribe the competition. If you & your competitors are all bribing with equal zeal, no one wins (and you’ve all suffered unnecessary, indeed, useless, costs). But of course, if everyone else is paying bribes, then the company that declines to is going to suffer losses. It’s a classic ‘collective action’ problem.