Some argue that because ethical standards are lax in many countries, Siemens and other firms

must pay bribes to obtain new business. Do you agree with this view? Stated differently, when

doing business around the world, is it generally better to emphasize normativism or relativism?

Justify your answer.

Low ethical standards can pose a real problem when doing business in a foreign country. When

bidding for a contract, how do you compete when rival firms may act unethically without

impunity in that country? What would be your company’s drive to pursue the ethical path when

bribery seems to be an easier path to success? Siemens faced these questions and chose to

create a culture within their business wherein bribery and corruption were not only acceptable,

but a normal part of doing business.

I do not agree with Siemens that bribery is the best course of action, even in countries whose

corruption make business nearly intractable without monetary gifts. Fundamentally, I think this

comes down to one thing. Siemens’ approach to corporate governance was a utilitarian one.

This approach to corporate approaches chooses what is ethical based on what does the most

good or the least harm. However, this approach was applied relatively to countries where

bribery was acceptable. Because of this relativistic philosophy, coupled with utilitarianism,

Siemens was caught doing something that may have been fine by the national standards of

some countries but was frowned upon or even illegal in others.

This relativistic application of ethical standards damaged Siemens reputation and it’s ability to

function as a business. Not only is it harder to foment an environment where the ethical choice

is clear at all times. A clearer set of standard exists in the normative application of ethical

standards. This would have mandated that ethical standards would be applied to each country

in the same way, making it much easier to choose the correct action. Even using their utilitarian

approach, applying it in a normative way could have saved Siemens from making the wrong

moves.
However, the company would have been much better served using a common good approach

in which actions are chosen based on what is best for an entire community or nation. Applying

this approach normatively across all business units and countries in which Siemens operates

would help ensure ethical standards are upheld regardless of the business climate of the host

nation. It would give cause to Siemens to improve all places in which it operates.