Corporate Compliance

Overview

Fighting Corruption at Siemens (Harvard Business Publishing) multi-media case study (details in Coursepack).

On November 15, 2006, German prosecutors raided offices and homes of Siemens AG staff as part of an ongoing investigation into bribery. The subsequent investigations covered business representing 60% of Siemens’ revenues and spanned operations in Asia, Africa, Europe, the Middle East, and the Americas. Through interviews with key Siemens executives and supporting internal materials, this multimedia case takes a look at how one of the world’s largest companies faced corruption head-on. (Summary of case taken from: https://hbsp.harvard.edu/product/112702-HTM-ENGLinks to an external site.)

Assignment

You will write a paper that responds to prompts communicated in the Instructors video introduction to the case (posted in Module 2) (IT IS THE PDF CALLED THE READINGS)The multi-media case study will be completed in Modules 2-4. You will submit a full rough draft of your responses to the prompts in Module 4. Once you have received feedback on your draft, you are to submit a final draft in Module 6.

Prompts: (1) What is corruption? Who is harmed by corruption/what are the costs of corruption? (2) How did a well-known multinational firm like Siemens get itself into this situation? (3) What would be your concerns if you were Peter Loscher and had just accepted the position as Siemens CEO? What challenges exist and what actions should be taken? (4) Evaluate the change process adopted by Siemens. How effective is Loscher in changing the tone from the top in his meeting with employees (video shown on the Tone from the Top page)? Which of the other changes are important in addressing Siemens’ challenges and Loscher’s concerns identified in question 3? (5) In the training materials, two of the situations employees are asked to review include (a) a request from a representative of a private customer to arrange an internship for his son in the company; and (b) a request from a public customer in Kazakhstan that Siemens arrange travel and sightseeing for two members of the ministry of economics who are planning on joining customer representatives on an acceptance visit before delivery. The customer also requests that Siemens pay customer employees a per diem of $75 during U.S. training. How would you handle these situations? How would Siemens want them to be handled under its new standards?

Technical and Submission Instructions

Papers must be double-spaced, 12 pt. font, and 15-20 pages in length.

NOTE: All documents should be saved as follows: ASmith_Assignment1 (your first initial, last name, underscore, and assignment number) and submitted to the appropriate Turnitin submission area in Blackboard.

Evaluation Criteria

Clarity of thought, structure of the paper/ideas, and quality of writing

Supporting research

Appropriate citations and use of APA

Overall structure (concise and succinct)

Rubric for this assignment is located in the course under Rubrics & Writing

*************THE DOCUMENT SUBMITTED “DRAFT.PDF” IS MY FIRST DRAFT OF THE WRITING. MY PROFESSOR MADE AN ANNOUNCEMENT REGARDING FEEDBACK ON WHAT TO HAVE AND ALL THE POINTS TO HAVE IN THE PAPER. SEE BELOW:********************************

Feedback on the Writing Assignment 1 drafts

Good Morning-

I’ve made it through everyone’s drafts, and really appreciate the hard work. As you finalize your drafts, and to be transparent with everyone about expectations, here are thoughts about how to make sure each portion of your paper is covering the main points I’d expect to see. Some papers are already covering all of these bases thoroughly. Some papers need a bit of work in these areas. Decide for yourself, and ask me if you have any specific questions. I hope you find this feedback helpful in work shopping your way to final papers. Thanks!

(1) What is corruption? Who is harmed by corruption/what are the costs of corruption? (2) How did a well-known multinational firm like Siemens get itself into this situation? (3) What would be your concerns if you were Peter Loscher and had just accepted the position as Siemens CEO? What challenges exist and what actions should be taken? (4) Evaluate the change process adopted by Siemens. How effective is Loscher in changing the tone from the top in his meeting with employees (video shown on the Tone from the Top page)? Which of the other changes are important in addressing Siemens’ challenges and Loscher’s concerns identified in question 3? (5) In the training materials, two of the situations employees are asked to review include (a) a request from a representative of a private customer to arrange an internship for his son in the company; and (b) a request from a public customer in Kazakhstan that Siemens arrange travel and sightseeing for two members of the ministry of economics who are planning on joining customer representatives on an acceptance visit before delivery. The customer also requests that Siemens pay customer employees a per diem of $75 during U.S. training. How would you handle these situations? How would Siemens want them to be handled under its new standards?

What is Corruption?

-facilitation payments

-larger payments to government officials responsible for making selections

-large payments for privileged access to markets or resources

*what factors led to this type of corruption?

What are the costs of corruption, and why?

-for shareholders and top management?

-for employees?

-for customers?

-costs to the public writ large?

-who isn’t harmed by the corruption, if anyone?

How did Siemens get itself into this situation?

-weak leadership?

-limited resources devoted to compliance?

-changes in legal environment?

-global reach of enterprise?

-competitive pressures in the industry/market?

-compliance slippery slop small infraction becomes larger and grows over time?

3) Loscher’s challenges and actions

Challenges:

-who to trust?

-how to change culture?

-scope the problem, and resolve the threats?

-promote employee morale in the face of challenge?

-mitigate future corruption risk?

-address corporate competitiveness in its various markets of operation?

Actions:

-discuss Loscher’s first speech to management about the crisis

-the challenges above should be used to measure actions taken in each of these domains

4) Evaluating the change process

When reviewing the actions taken, consider wrestling with at least a few of these questions:

-What is your overall assessment of the new compliance program? Is it likely to reduce the risk

of future corruption at Siemens?

-How would you feel as a Siemens employee living with these types of policies? Are there too

many rules? Has the culture been meaningfully impacted so behavior changes and expectations are clearer?

-How do customers react to the changes?

5) Scenarios

-for the internship scenario, are you finding a way to communicate with and accommodate the customer’s request without violating the Siemens guideline? what are some ways you could do that?

-for the travel/sightseeing/per diem scenario, are these situations that should be negotiated on the fly? While negotiating the relationship at the outset? Some other time? Why? What particulars should be negotiated, and who from Siemens should be involved? Is a review or authorization required? Are some parts of the customer request unacceptable, if so, which ones? From a customer service standpoint, is there something Siemens can offer without violating its policies or protocols?