Business Case Studies,Corporate Governance & Business Ethics Case Study, Flour Corp's Business Ethics Practices: Creating Six Sigma Standards in Staying Corruption-Free

Code : GOV0029

Year : 2007

Industry : Engineering, Electrical and Electronics

Region : US Germany

Teaching Note: Available

Structured Assignment : Available

Abstract: In January 2005, Klaus Kleinfeld (Kleinfeld) succeeded Heinrich von Pierer (von Pierer) as the 11th CEO of Siemens. Under the tenure of Kleinfeld, Siemens was doing well. Sales rose by 16% from € 75.45 billion in 2005 to € 87.33 in 2006, profits by 35% to € 5.3 billion and the operating profit margin increased by 49% for the first quarter in 2007. At the same time, Siemens has racked up an impressive collection of corruption scandals. Prosecutors and security watchdogs in Europe and the US have been investigating current and former Siemens employees, including some senior executives, on various allegations of corruption and unfair play. Kleinfeld and von Pierer were suspected as the mess happened right under their nose. But they – as well as the board members – vindicated themselves of any wrongdoing. Yet Kleinfeld’s tenure was not extended beyond its expiry in September 2007.