IN SEARCH OF DISCLOSURE EFFECTS OF THE SIEMENS AG’S CORRUPTION SCANDAL

Renata Blanc (renatablanc@fep.up.pt), Manuel Branco, Charles H. Cho (cho@essec.edu) and Joanne Sopt (joanne.sopt@essec.edu)
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Renata Blanc: University of Porto, Faculty of Economics
Charles H. Cho: ESSEC Business School
Joanne Sopt: ESSEC Business School

OBEGEF Working Papers from OBEGEF - Observatório de Economia e Gestão de Fraude, OBEGEF Working Papers on Fraud and Corruption

Abstract: In this study, we examine the changes in disclosure practices at Siemens AG—a large German multinational corporation, on compliance and the fight against corruption over a period of 11 years during which two significant corruption-related events occurred: (1) the issuance of the 10th principle on the fight against corruption, which can constitute an exogenous shock and thus potentially create positive adjustments to a company’s reputation; and (2) the occurrence of a major corruption scandal at Siemens in 2006, which had a negative external impact. Through a content analysis of the company’s annual reports and sustainability reports from 2000 to 2011 and under the lens of legitimacy theory and media agenda setting theory, our findings suggest that Siemens changed its compliance and corruption disclosure practices to manage its legitimacy in the wake of the 2006 corruption scandal and in subsequent years. The strategies adopted by Siemens may be described as both symbolic and substantive (see Dowling and Pfeffer, 1975; Ashforth and Gibbs, 1990; Rodrigue, Magnan and Cho, forthcoming). The implications emanating from this study seem therefore relevant for several key societal stakeholders in that they could at least provide additional arguments for the need of better regulations to ensure the disclosure of relevant, reliable and consistent corporate information about important social issues such as corruption—a serious economic, social, political and moral issue (Argandoña, 2007).

Keywords: corporate social responsibility; corruption; disclosure; legitimacy management; Siemens; substantive; symbolic; United Nations Global Compact (search for similar items in EconPapers)
Pages: 21 pages
Date: 2013-01
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