Business Ethics At ABB

Case facts:

ABB operates in 100 countries. Employs 103,000 people. Headquartered in Zurich ,Switzerland. It s a merger of two companies Brown Boveri and Asea, and the merged company was called Asea Brown Boveri Limited in 1989. Companies initiative to set up overall mission and values was made under then CEO Percy Barnevik 1988. Current CEO is Joe Hogan. It reported global revenue of $31.6 billion for 2010. It is organized into 5 divisions- Power Products -Power Systems -Automation Products -Process Automation -robotics

Q.1. What were the various measures undertaken by ABB to uphold Business ethical standards of its employees within the organization?

Introduced Codes of ethics Mission and Values describes Ethical Guidelines for the organization as a whole An execution body to implement those ethics (GF-LC) Group Function legal and compliance in place A Compliance Network in place to uphold business ethics Task Force decided to have a compliance counsel in each country and regional coordinator Compliance system had in-built monitoring and auditing procedure (business ethics Hotline on the website along with OMBUDS PROGRAMME) Ethical training programme to highlight ABB s business ethics guidelines and standards

Q2. Business ethics on paper cannot be translated into practice; breach of ethics is inevitable in buyer and seller dealings . What were the likely reasons that led ABB officials to make illegal payments in their business dealings , despite the company s ethical code of conduct?

To win lucrative contracts which are not uncommon in the power sector. Most of their deals involved the Govt. sector which makes the contract open to kickbacks and bribes. Bribes to the officials of Nigeria, Angola and Kazakhastan for the purpose of obtaining and retaining business and to sham contracts.