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Siemens Executive Arrested March 28, 2007

Posted by silviamocanu07 in Business-Society Issues, Organizational Environment.

     Johannes Feldmayer, one of Siemens’ top executives, was arrested and is suspected of having used company funds to influence the result of its negotiations with IG Metall, Germany’s largest industrial union. Siemens, Europe’s largest engineering firm, is negotiating an increase in workers’ wages with the union. IG Metall is requesting a 6.5% increase, while Siemens is only willing to match half of that percentage. Feldmeyer is thought to have been wrongfully directing company funds to a consulting firm which works with the labor union. Siemens is also undergoing a separate investigation by authorities, as it is believed that the top management of the company has paid millions of Euros for fake consulting contracts, and actually used the money in order to bribe potential customers abroad. The company’s response to the investigations was to cooperate with the authorities, to place stricter internal financial controls, as well as to seek outside legal advice in order to address this situation.

    It is hard to imagine that top executives in such a reputable organization are capable of such unethical and blatantly illegal behavior. One of the main reasonings behind such actions would probably be the desire to reduce labor costs, which can become quite substantial, particularly in a country such as Germany, where labor unions are very strong and hold significant bargaining power with employers.  This is a clear instance of the external environment directly influencing the company’s costs. Do you think that the charges against Feldmayer are justified? What do you think would drive a high-up executive to such actions?

Link to the article: http://online.wsj.com/article/SB117500626744850396.html?mod=home_whats_news_europe



1. collage9 - March 28, 2007

I think the charges against Feldmayer are definitely justified. It is unethical, not to mention illegal, and should be punished accordingly. What is always amazing to me is that the executives still try to pull stunts like this. They always seem to get caught yet many of them still try to mess with their companie’s money. I guess they’ll never learn from others mistakes.

2. Brian Mulligan - April 1, 2007

The charges are justified, but I feel that executives feel like gods. They can be above the rules and they also seem very money hungry. Even though they have millions in their coffers, they always seem to try to make more money by being invovled in illegal behavior. What motives do they have if already have a boat load of money? Is it because they want to help the company? or have their jobs and industry instilled a drive to make as much money as possible for themselves, even if they have to participate in illegeal behavior?

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