Daimler AG, maker of Mercedes cars, has agreed to pay $ 185 million in fines. Daimler is accused of bribing foreign officials in at least 22 countries between 1998 and 2008. Daimler makes million of improper payment to officials in return to assistance in securing contracts with government customers for the purchase of Daimler vehicles.
Daimler is the world’s second-largest luxury automaker and has about 256,000 employees. I think that such a big company as Daimler has to play a role model for the society, but they did it far from it. The company was developing a culture where it was tolerated and even encouraged to take on bribery. The department did not charge any people with wrongdoing.
Daimler didn’t respect the law of bribery. The idea of legality means that you must comply with all laws, at least in a well-ordered society. Most people have a strong interest in a stable society and relations. An important moral principle in this case is honesty. Honesty is the cement of the free market, a market without honesty cannot function and will collapse. With the bribery constructions, Daimler was deceiving their stakeholders. When it is known for the stakeholders that Daimler use this kind of instructions, it could lead that they will lose their confidence in the company. In extremely situations it can even lead to a default of the company.
Deceiving your stakeholders is morally wrong. Rational people can’t live in a society where bribery is uphold. So the principal honesty has to be uphold in a well-ordered society. In the hierarchy morality stands higher than the legality and business discourses. So in this case, using bribery is morally wrong even if the company can get benefits of it.
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There is no question about it, Daimler acted morally wrong.
Like in the principal comment, they didn’t respect law, other businesses and had bad morality.
By bribing Daimler wanted to secure contracts with governments. Which is a nice advertisement for the company. Legally this is forbidden because it’s against the law but also bribing hurts the competition and the economy.
Competition: because they can’t compete with Daimler to collect contracts, which provides work for the employees and gives them the possibility to pay bills.
Economy: bribing affects the so-called ‘invisible hand’. But also, written in the newspapers: “the company made at least $50 million in extra pretax profits as a result of the schemes”. This means that society has to pay more taxes in the end because Daimler is not playing by the rules.
As punishment they have to pay $185 million. How much does this hurt Daimler ?
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