Siemens Bribery Scandal
Siemens Bribery ScandalInternational Management – Siemens Case Study Group Coursework Presentation
Klaus Kleinfeld took over as CEO of Siemens in 2005 from Heinrich von Pierer and was at the helm of the company until his resignation on the 25th April 2007. During his time he was seen as an enigmatic premier who transformed the company. The stock had grown by 39% since he took over (Global Business 07/05/2007). He streamlined the organisation by cutting costs, boosting innovation and expanding abroad. He even maintained a rise in the company’s share price during the bribery scandals publicity.
Was the board right to accept his resignation?
This was a highly sensitive decision at the time because the bribery scandals came to light whilst Kleinfeld was CEO but he had worked magic at Siemens in a very short amount of time, in only two years he had transformed Siemens and their share price had grown exponentially as a result.
Based upon his track record at the company he did not deserve to be released in that manner. The bribery came to light during Klienfeld’s tenure but most of payments were made during von Pierer’s time as CEO. Kleinfeld pushed Siemens employees to make faster decisions and put as much emphasis on the customers as on the technology. He sold off the unprofitable mobile phone production to BenQ and fostered a JV between Nokia and Siemens to merge their mobile and fixed line phone equipment businesses to create one of the world’s biggest network firms. In addition he invested $6 billion in 2006 on acquiring positions in growing areas such as medical diagnostics and wind power. Overall he left the company in a very strong position, indeed only hours before he tendered his resignation the company announced that its operating profit in the most recent quarter had soared by 49% to $2.7 billion. It is also apparent that Kleinfeld was forced out to an extent by other executive members who disliked his management style and used the publicity of the...