Skip to main content

On the dark side of the code: organizational challenges to an effective anti-corruption strategy


Corporations have been fighting for decades to eliminate corruption. However, despite the proliferation of compliance programs and a recurrent surge of interest in business ethics, commercial bribery prevails as a “rational choice strategy” for economic success and thus is widely regarded as the result of immoral choices of greedy individuals. This article reports on a modus operandi study concerning corruption within a large industrial corporation (Siemens AG). Results highlight the fact that neither consistent anti-corruption norms nor severe formal sanctions were able to deter certain employees from deviant behavior in this landmark case of structural corruption. Sociologists and business economists have both pointed to the organizational culture that provides an explanation for this paradox. The author compares three diverging hypotheses: (1) private gain, (2) cognitive normalization, and (3) organizational cultures, and concludes that the structural causes of corrupt practices fit the definition of ‘useful illegality’ (Luhmann). To a large extent, this old sociological concept resembles the criminological idea of corporate crime, but it emphasizes the cultural factors that undermine management’s preventive strategies, and thus holds the promise of theoretical progress. Implications that emerge from the case analysis for the social control of corporate bribe payers are discussed. The discussion reveals why challenges to successful anti-corruption efforts persist at the organizational level.

This is a preview of subscription content, access via your institution.


  1. Heinrich von Pierer joined Siemens in 1969. He served as ‘chief executive officer’ (CEO) since 1992 and as ‘chairman of the supervisory board’ in the last 2 years of his employment. He resigned in 2007, in the wake of the corruption scandal that is the subject of this article.

  2. This article uses a narrow, formal understanding of corruption, describing the phenomenon as a specific type of interaction, defined by the granting or acceptance of unduly advantages and third party damage [cf. 3: p. 162].

  3. A modest progress in the search for an explanation of corruption phenomena at the firm level has recently been driven by management studies and organization science [12, 13].

  4. Organizations will tend to formalize all expectations which are crucial to their public image, in order to discipline the members’ behavior in situations in which they have to interact with non-members [31: p. 117].

  5. Luhmann [35] defines organizational culture as the ‘undecidable premises of decision-making’, a concept that he introduced in a posthumously published work on organizational sociology. For a brief account of the basic concepts of this late opus, see Seidl & Becker [36]. For a succinct overview of its development, see Nassehi [37].

  6. Whether the norm’s repudiation is actually reconcilable with a continuing membership in the formalized system is a question determined from the standpoint of the user that invokes the norm [31: p. 308]. On the one hand, this obviously implies nullo actore nullus iudex. On the other hand, this also means that if the formal organization does not discriminate petty deviations, then this distinction is of little avail to defend the deviant employee (outside the scope of labor law).

  7. That is why my account of the criminal case also has to rely on this source. However, media reports (collected via systematic research in the database LexisNexis Wirtschaft and online archives of daily newspaper Süddeutsche Zeitung) on the case were validated with press releases of the court [4042] and court documentation to reconstruct the following course of events.

  8. According to some media reports, bureaucracy even required at some point the preprinted indication ‘stick yellow note here’.

  9. This and the following quotations are my own translation of excerpts from an interview published in a German daily newspaper [cf. 44; Süddeutsche Zeitung].

  10. Thus, corporate criminality had long provided Wilhelm S. with the necessary opportunity structure for embezzlement.

  11. The fact that the Siemens AG and three of its subsidiaries pled guilty to FCPA-related charges by U.S. authorities in 2008 corroborates this finding [48].

  12. Compare this to the worst case scenario that Sidhu [50: p. 1352 (emphasis added)] envisions regarding anti-corruption compliance in the aftermath of the Siemens scandal: “Suitcases of cash may be replaced by requests for donations or other payments that sound innocent, but turn out to be corruption in disguise. The resourcefulness of employees willing to bribe for the acquisition of business should not be underestimated.”

  13. This is not to say that an economic analysis of the law [see 11] is pointless, but that the principal–agent approach does not adequately capture complex organizational structures.

  14. In 2009, Siemens threatened former board members with civil actions. They were supposed to compensate the corporation for damages that allegedly occurred due to violations of their respective employment duties. Nine out of eleven agreed to settlements, one of them former chairman Heinrich von Pierer, who eventually paid 5 million Euros [53].


  1. von Pierer, H. (2003). Zwischen Profit und Moral? In H. von Pierer, K. Homann, & G. Lübbe-Wolff (Eds.), Zwischen Profit und Moral. Für eine menschliche Wirtschaft. München: Hanser.

  2. Sutherland, E. H. (1940). White-collar criminality. American Sociological Review, 5(1), 1–12.

    Article  Google Scholar 

  3. Pohlmann, M., Markova, H., & Klinkhammer, J. (2011). Moral und Korruption. In M. Pohlmann & H. Markova (Eds.), Soziologie der Organisation. Eine Einführung (pp. 155–180). Stuttgart: UTB.

  4. Woof, W., & Cragg, W. (2005). The US foreign corrupt practices act: The role of ethics, law and self-regulation in global markets. In W. Cragg (Ed.), Ethics Codes, Corporations and the Challanges of Globalization (pp. 112–153). Cheltenham: Edward Elgar.

  5. Weismann, M. (2009). The foreign corrupt practices act: the failure of the self-regulatory model of corporate governance in the global business environment. Journal of Business Ethics, 88(4), 615–661. doi:10.1007/s10551-008-9966-y.

    Article  Google Scholar 

  6. Roloff, J. (2007). Business as usual. Der Deutsche und Französische Beitrag zur Korrumpierung des Oil for Food-Programms. Zeitschrift für Wirtschafts- und Unternehmensethik, 8(3), 299–314.

    Google Scholar 

  7. Williams, J., & Beare, M. (1999). The business of bribery: globalization, economic liberalization, and the “problem” of corruption. Crime, Law and Social Change, 32(2), 115–146. doi:10.1023/A:1008375930680.

    Article  Google Scholar 

  8. Sung, H.-E. (2005). Between demand and supply: bribery in international trade. Crime, Law and Social Change, 44(1), 111–132. doi:10.1007/s10611-006-9011-y.

    Article  Google Scholar 

  9. Hess, D., & Ford, C. L. (2008). Corporate corruption and reform undertakings: a new approach to an old problem. Cornell International Law Journal, 41, 307–346.

    Google Scholar 

  10. Baughn, C., Bodie, N. L., Buchanan, M. A., & Bixby, M. B. (2010). Bribery in international business transactions. Journal of Business Ethics, 92, 15–32. doi:10.1007/s10551-009-0136-7.

    Article  Google Scholar 

  11. Rose-Ackerman, S. (2010). The law and economics of bribery and extortion. Annual Review of Law and Social Science, 6, 217–238. doi:10.1146/annurev-lawsocsci-102209-152942.

    Article  Google Scholar 

  12. Ashforth, B. E., Gioia, D. A., Robinson, S. L., & Trevino, L. K. (2008). Re-viewing organizational corruption. Academy of Management Review, 33(3), 670–684.

    Article  Google Scholar 

  13. Grieger, J. (2005). Corruption in organizations. Some outlines for research. Working Paper No. 203: Department of Economics and Social Sciences, University of Wuppertal.

  14. Huisman, W., & Walle, G. V. (2010). The criminology of corruption. In G. D. Graaf, P. V. Maravic, & P. Wagenaar (Eds.), The good cause. Theoretical perspectives on corruption. Opladen: Barbara Budrich.

    Google Scholar 

  15. Wieland, J. (2005). Die Governance der Korruption. In S. A. Jansen & B. P. Priddat (Eds.), Korruption. Unaufgeklärter Kapitalismus – Multidisziplinäre Perspektiven zu Funktionen und Folgen der Korruption (pp. 43–62). Wiesbaden: VS.

  16. Ziegleder, D. (2007). Business and Self-regulation: results from a comparative study on the prevention of economic crime. Zeitschrift fur Rechtssoziologie, 28(2), 203–213.

    Google Scholar 

  17. Wieland, J. (2008). Die Kunst der Compliance. In A. Löhr & E. Burkatzki (Eds.), Wirtschaftskriminalität und Ethik (Vol. 16, pp. 155–169). München: Hampp.

  18. Wieland, J. (2010). Die Psychologie der Compliance. In J. Wieland, R. Steinmeyer, & S. Grüninger (Eds.), Handbuch Compliance-Management (pp. 71–88). Berlin: Erich Schmidt.

  19. Wolf, S. (2009). Die Siemens-Korruptionsaffäre – ein Überblick. In P. Graeff, K. Schröder, & S. Wolf (Eds.), Der Korruptionsfall Siemens. Analysen und praxisnahe Folgerungen des wissenschaftlichen Arbeitskreises von Transparency International Deutschland (pp. 9–17). Baden-Baden: Nomos.

  20. Börsch, A. (2004). Globalisation, shareholder value, restructuring: the (non)-transformation of Siemens. New Political Economy, 9(3), 365–387.

    Article  Google Scholar 

  21. Verschoor, C. C. (2007). Siemens AG is the latest fallen ethics idol. Strategic Finance, 89(5), 11–16.

    Google Scholar 

  22. Ashforth, B. E., & Anand, V. (2003). The normalization of corruption in organizations. Research in Organizational Behavior, 25, 1–52.

    Article  Google Scholar 

  23. Grieger, J. (2009). Korruption und Kultur bei der Siemens AG – Eine Handlungs-Struktur-Analyse. In P. Graeff, K. Schröder, & S. Wolf (Eds.), Der Korruptionsfall Siemens. Analysen und praxisnahe Folgerungen des wissenschaftlichen Arbeitskreises von Transparency International Deutschland (pp. 103–130). Baden-Baden: Nomos.

  24. Dombois, R. (2009). Von organisierter Korruption zu individuellem Korruptionsdruck? Soziologische Einblicke in die Siemens-Korruptionsaffäre. In P. Graeff, K. Schröder, & S. Wolf (Eds.), Der Korruptionsfall Siemens. Analysen und praxisnahe Folgerungen des wissenschaftlichen Arbeitskreises von Transparency International Deutschland (pp. 131–150). Baden-Baden: Nomos.

  25. Clinard, M. B., & Quinney, R. (1973). Criminal behavior systems. A typology (2nd ed.). New York: Holt, Rinehart and Winston.

    Google Scholar 

  26. Braithwaite, J. (1985). White collar crime. Annual Review of Sociology, 11, 1–25.

    Article  Google Scholar 

  27. Fisse, B., & Braithwaite, J. (1993). Corporations, crime, and accountability. Cambridge: Cambridge University Press.

    Google Scholar 

  28. Braithwaite, J. (1989). Criminological theory and organizational crime. Justice Quarterly, 6(3), 333–358.

    Article  Google Scholar 

  29. Geis, G. (1995). A review, rebuttal, and reconciliation of Cressey and Braithwaite & Fisse on criminological theory and corporate crime. In F. S. Adler & W. S. Laufer (Eds.), The legacy of anomie theory, (Advances in criminological theory) (Vol. 6, pp. 399–428). New Brunswick: Transaction.

    Google Scholar 

  30. Vaughan, D. (2002). Criminology and the sociology of organizations. Analogy, comparative social organization, and general theory. Crime, Law and Social Change, 37(2), 117–136.

    Article  Google Scholar 

  31. Luhmann, N. (1964). Funktionen und Folgen formaler Organisation (Schriftenreihe der Hochschule Speyer) (Vol. 20). Berlin: Duncker & Humblot.

  32. Cressey, D. R. (1959). Contradictory directives in complex organizations: the case of the prison. Administrative Science Quarterly, 4, 1–19.

    Article  Google Scholar 

  33. Sjoberg, G. (1960). Contradictory functional requirements and social systems. Journal of Conflict Resolution, 4, 198–208. doi:10.1177/002200276000400205.

    Article  Google Scholar 

  34. Pohlmann, M. (2008). Management und Moral. In T. Blank, T. Münch, S. Schanne, & C. Staffhorst (Eds.), Integrierte Soziologie. Perspektiven zwischen Ökonomie und Soziologie, Praxis und Wissenschaft (pp. 161–176). München: Rainer Hampp.

  35. Luhmann, N. (2000). Organisation und Entscheidung. Wiesbaden: WDV.

  36. Seidl, D., & Becker, K.-H. (2006). Organizations as distinction generating and processing systems. Organization, 13(1), 9–35.

    Article  Google Scholar 

  37. Nassehi, A. (2005). Organizations as decision machines: Niklas Luhmann’s theory of organized social systems. The Sociological Review, 53, 178–191.

    Article  Google Scholar 

  38. Leyendecker, H. (2007). Die große Gier. Korruption, Kartelle, Lustreisen: Warum unsere Wirtschaft eine neue Moral braucht. Berlin: Rowohlt.

  39. Jenkins, A., & Braithwaite, J. (1993). Profits, pressure and corporate lawbreaking. Crime, Law and Social Change, 20(3), 221–232. doi:10.1007/bf01308451.

    Article  Google Scholar 

  40. Oberlandesgericht München (2008). Strafverfahren gegen Wolfgang Ru. und Heinz Wolfgang Ernst K. - von J. wegen Beihilfe zur Untreue u. a. (Siemens-Komplex). Press Release, Criminal Cases of November 19.

  41. Oberlandesgericht München (2008). Strafverfahren gegen Reinhard S. (57) wegen Untreue (Siemens-Komplex). Press Release, Criminal Cases of July 28.

  42. Oberlandesgericht München (2010). Strafverfahren gegen Hans-Werner H. und Jörg Michael K. wegen Untreue u.a. (Siemens-Komplex). Press Release, Criminal Cases of April 20.

  43. Levi, M., Dakolias, M., & Greenberg, T. S. (2007). Money laundering and corruption. In J. E. Campos (Ed.), The many faces of corruption: Tracking vulnerabilities at the sector level. Washington: World Bank.

    Google Scholar 

  44. Freiberger, H., Hagelüken, A., & Ott, K. (2008, August 1). “Eine Million Euro passen bequem in diese Aktentasche”, Süddeutsche Zeitung, p. 28.

  45. Bundesgerichtshof (2008). Supreme Court Decision of August 29. database, Az. 2 StR 587/07.

  46. Landgericht Darmstadt (2007). Regional Court Decision of May 14. database, Az. 712 Js 5213/04 - 9 KLs.

  47. Landgericht Nürnberg-Fürth (2008). Regional Court Decision of November 24. database, Az. 3KLs 501 Js 1777/2008.

  48. United States Department of Justice (2008). Siemens AG and three subsidiaries plead guilty to foreign corrupt practices act violations and agree to pay $450 million in combined criminal fines. Press Release 08-1105 (December 15).

  49. Graeff, P. (2009). Im Sinne des Unternehmens? Soziale Aspekte der korrupten Transaktionen im Hause Siemens. In P. Graeff, K. Schröder, & S. Wolf (Eds.), Der Korruptionsfall Siemens. Analysen und Praxisnahe Folgerungen des Wissenschaftlichen Arbeitskreises von Transparency International Deutschland (pp. 151–171). Baden-Baden: Nomos.

  50. Sidhu, K. (2009). Anti-corruption compliance standards in the aftermath of the Siemens scandal. German Law Journal, 10(8), 1343–1354.

    Google Scholar 

  51. Luhmann, N. (1993). Wirtschaftsethik – als Ethik? In J. Wieland (Ed.), Wirtschaftsethik und Theorie der Gesellschaft. Frankfurt am Main: Suhrkamp.

  52. Klinkhammer, J. (2011). Korruption powered by Siemens. Alte, korruptionsaffine Werte in den Führungsetagen des Geschäftsbereichs Power Generation. In G. Lämmlin & M. Pohlmann (Eds.), Neue Werte in den Führungsetagen? Kontinuität und Wandel in der Wirtschaftselite (Herrenalber Forum) (Vol. 64, pp. 136–168). Karlsruhe: Evangelische Akademie Baden.

    Google Scholar 

  53. Lawton, M. (2009). Former Siemens boss agrees to damages. Accessed 17 Jan 2013.

  54. Passas, N. (1990). Anomie and corporate deviance. Contemporary Crises, 14(2), 157–178. doi:10.1007/bf00728269.

    Article  Google Scholar 

  55. Vaughan, D. (1982). Toward understanding unlawful organizational behavior. Michigan Law Review, 80(7), 1377–1402. doi:10.2307/1288553.

    Article  Google Scholar 

  56. Luhmann, N. (1982). The differentiation of society. New York: Columbia University Press.

    Google Scholar 

  57. Luhmann, N. (1996). Social systems. J. Bednarz Jr. with D. Baecker (Trans.), Stanford University Press.

  58. Lee, D. (2000). The society of society: the grand finale of Niklas Luhmann. Sociological Theory, 18(2), 320–330. doi:10.1111/0735-2751.00102.

    Article  Google Scholar 

Download references


I am indebted to Markus Pohlmann, who supervised this research, for making me aware of the link between the Siemens case and useful illegality. Furthermore, this article has benefited greatly from comments on an earlier draft by Rafael Bauschke, Volker Helbig and Hristina Markova as well as – last but certainly not least – by an anonymous reviewer.

Author information

Authors and Affiliations


Corresponding author

Correspondence to Julian Klinkhammer.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Klinkhammer, J. On the dark side of the code: organizational challenges to an effective anti-corruption strategy. Crime Law Soc Change 60, 191–208 (2013).

Download citation

  • Published:

  • Issue Date:

  • DOI:


  • Chief Executive Officer
  • Organizational Crime
  • Corporate Crime
  • Corrupt Practice
  • Corruption Case