Analysis of Siemens Organisation

This article provides information on the Siemens organisation. It highlights the strategies developed by the organisation and the major trends followed in order to stay in the competitive market. It also tells about the leadership styles undertaken by various people of the Siemens organisation and the initiatives that should be taken to implement various strategies.

Running head: STRATEGIC MANAGEMENT
Analysis of Siemen’s Organisation
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Executive summary
This article provides information on the Siemens organisation. It highlights the strategies
developed by the organisation and the major trends followed in order to stay in the
competitive market. It also tells about the leadership styles undertaken by various people of
the Siemens organisation and the initiatives that should be taken to implement various
strategies.

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Table of Contents
Current Scenario of Siemens......................................................................................................3
Need for change.........................................................................................................................5
Impact on culture........................................................................................................................6
Leadership styles and techniques...............................................................................................8
References................................................................................................................................12

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Current Scenario of Siemens
The Siemens’ has various divisions operating across the globe accounting 348,000 employees
in 100 business fields in 190 countries which are described under:
 The power and gas division comprise of customers pertaining to engineering,
utilities, power producers and construction companies. It ranges from production of
generators, compressors, turbines etc. to the delivery and design of power plants. It
offers eco-friendly solutions and transportation of oil and gas.
 The wind power and renewable division offers onshore and offshore supply of wind
power around the world. It focuses on optimizing the wind power costs and the
installation and manufacturing process related to it. It also provides solutions in the
hydropower sector by converting and using the hydel power which requires high level
of coordination.
 The power generation service division provides service support, replacements,
upgrades and maintenance in the industry, utility and oil & gas sectors (Nielsen and
Ciabuschi 2016). It also offers solutions related to compressors for gas and oil
industry and the diagnostic and handling of power equipments.
 The energy management division offers services, systems and products related to
the distribution and transmission of electrical power throughout the world. The supply
domain comprises of power supply for high voltage transmission systems and
industrial plants, facilities for energy automation solutions, smart grid and power grid
levels.
 The building technology division offers safe and efficient services for the buildings
and infrastructures by providing automation services and technologies. The services
include fire safety, automation, security, heat control, air-conditioning and ventilation
of the plants.

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 The mobility division focuses on the transportation of the goods and people through
roadways and railways. It looks into the challenges regarding the logistics and
transport facilities in cities, the optimisation of freight transport, reliability and
efficiency of rail systems. It has developed metro cars, locomotives, streetcars in
addition to signal and control technology for freights and rail passengers.
 The digital factory division focuses on the software and hardware product
integration, automation and product engineering. The main aim was to digitalise the
value chain of the manufacturing process for which it has created a unique platform
named “Digital Enterprise”.
 The process industries and drives division emphasised on the business operations
of process industries. It uses automation, industrial software, integrated drive systems
to ensure the safety and reliability of the plants and processes.
 Siemens healthcare is the major supplier of the technologies and products to the
healthcare industries and has created benchmark in providing laboratory diagnostics
and medical imaging. It also provides digital and consulting services, molecular in
vitro diagnostic products, therapy solutions etc. As this sector required high cost of
maintenance so it was made autonomous and was managed by other divisions of
Siemens like a “company within the company”.
 The financial service division works by providing financial solutions to customers in
a well-structured way. This has helped the company by opening up new business
opportunities and has strengthened the relationship between their financial decision-
makers (Ardianto and Tanner 2015). It also offers financial risk management services
and supports acquisition of new customers.

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Need for change
Siemens was facing two major challenges. One was to improve the performance as it
has not met the targets which were promised to the shareholders. Another one was that the
company’s profitability was way behind its competitors like the General Electric and the
ABB. In order to strive in this unprecedented world of competitiveness, companies roll out
strategies for sustainability (Bass and Paulish 2015). Siemens realized that by identifying
relevant challenges it can gain corporate success. So, it started determining the trends that
could affect the business. They identified 57 trends that had the possibility of affecting the
company’s growth. They further categorised these challenges into 5 megatrends which are
digitalisation, demographic change, globalisation, climate change and urbanisation (Delso et
al. 2015)
Following are the megatrends and trends associated with it
Digitalisation
 Digital integration in business
 Automation and robotics
 Big data
 Biotech growth
 Information explosion (Grunig 2015)
 Individualised manufacturing
Globalisation
 Pressure in public sector
 New economic growth sectors
 Increasing global competition

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Demographic change
 Population growth
 Individualisation
 Ageing societies (Kuebler et al. 2014)
 Increasing competition for the scarcer talent pool
 Connectedness via mobile communication, internet etc.
 Increment in population along with long wages
Climate change
 Water scarcity
 Resource scarcity
 Alternate energy sources
 Increasing incidents of natural disasters
Urbanisation
 Growth of urban agglomerations
 Decentralisation of power supply
Impact on culture
The cultural acceptance of the employee greatly determine the effectiveness of the
organisation. Productivity increases as long as there is motivation. For example, when the
organization is innovative in nature and provide good terms of benefits to the employees then
the employees are highly motivated and influenced in their job profile and hence the
productivity of the employees is leveraged. It is evident that when the workplace is not
suitable according to the employees and when poor organizational culture is practiced then
this would lead to poor performance of the employees (Siemens.com 2019). This poor

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performance of the employees would eventually lead to low productivity in the organization.
Employees are happy and satisfied as soon as they enjoy the work done in the organisation.
Identity of the employee is also affected by the organizational culture in a positive or
negative way. Business outcomes can also be affected by organizational culture. Siemens has
a flatter structure which is engaged in staff management. This leads to creative and motivated
staffs. Less cost involvement leads to business success and efficiency. Siemens motivates
every employee to give best in his/her position reflecting an entrepreneurial behaviour
(Onkvisit and Shaw 2018). It works on the agenda of employee orientation by
communicating and encouraging employees and make them believe on the fact that this is
their own company and they are the shareholders. The company always works for financial
stability and doesn’t compromises with short term gains. It follows a structure of family
enterprise and builds customer relationship. Digitisation had a huge impact on the cultural
environment. From the trends arising certain changes were observed as well as analysed for
the occurrence and the result on the businesses of Siemens. Example- trends in the form of
alternative sources of energy, decentralization for generation of power as well as supply and
investment in terms of infrastructure needs were considered for change in climate. The
resulting situation was that there was increase in energy supply by renewables but the
situation where supply could not match as per requirements of grid example being- with
respect to time as well as fluctuations of supply related to demand time. In such situation it
was identified that there would be requirement for as well as provision for facility having no
existence or recognized being the theme of “storage of renewable energy”. The above
mentioned theme was considered to have impact on portfolio of Siemens and also for its
happening in the next decade.

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Leadership styles and techniques
The strategy in the Siemens involved the emphasis on portfolio management, determining
business goals, coordinating strategic planning and monitoring performance against these
parameters (Van Dijk and Oosthuizen 2017). They followed two main strategy roles:
 Portfolio management and strategic planning
 Strategic development
Dr. Horst J. kayser suggested to lay emphasis on growth and innovation in digitalization,
electrification and automation. He further said to work on productivity, optimizing
operations, customer centricity and market (Hinterhuber 2014). Project management was also
to be looked after by improved technical risk management and better corporate memory. He
created room in the hierarchy levels by minimizing management layers so global demands
can be met.
Peter loescher categorized the activities of siemens under four categories which are
Infrastructure & cities, industry, healthcare and energy. The objective of the proposed
structure was to increase the growth potential. But in 2014, this technique was eradicated to
cut costs, reduce bureaucracy and increase decision-making.
In order to achieve optimal effectiveness strong management and strong leadership is
required. The features of a strong leader are: controlling, creating vision, smart performances,
developing strategies and efficiency (Andrassy, Vlaj and Beaugeant 2016). Whereas weak
leaders are slow to change, are less productive and efficient, can’t control the workforce and
have almost no vision or have little vision.

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Two leadership style that can improve the implementation of the strategy are:
The employee oriented leader
The employee-oriented leader focuses on interpersonal relationships by engaging in the
interests and activities of the employees and recognizing the individual differences (Hornung
et al. 2016). This type of leadership is also called as humanistic or charismatic. He/she forms
strong teams, inspires, motivates, praise employees’ contribution, consults with the team
members and also has emotional intelligence. Following are the advantages that a charismatic
leader adheres:
 Can be democratic
 Takes high risk
 Develops an environment of self-esteem
 Lay emphasis on individuals
 Motivates and inspires
 Consult staffs
On the contrary, charismatic leaders can sometimes consider themselves over confident
leading to less production and loses energy and momentum.
The task oriented leaders
The task oriented leader focuses on the production and technical aspects. The task
oriented leader has high expectations and defined goals. They make people accountable and
maintains hierarchy. They are result focused and plans autocratic and authoritative.
Following are the advantages related to task oriented leader:
 Reduces wasteful activities

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 Rewards employees for achieving success
 They are adaptable to business markets
 Motivates and inspires people to stay focused and concentrated
There are some demerits too. They sometimes scare away employees and workers. They
dominate and decision making is centralized. They can sometimes also create low morales
amongst employees and be really demotivating.,
In SIEMENS, the success and achievement has come through transformational,
inspirational, charismatic styles along with strong communications with the teams. They have
created an atmosphere of ‘can do’ culture embedded with high beliefs and vision in the
company, high degrees of innovation, team esteem and market leading products.
Bureaucratic approach
This approach deals with the authority structure and the spoken or composed record
of the organization. In this approach the firm is considered as closed system. The bureaucratic
methodology works towards the development and training of managerial skills. The benefits
of this techniques are that, it pinpoint the general structure and operations of the business, it
provides a suitable environment for training and development, and also supervises the actions
of the managers (Baez and Abolafia 2014). On the other hand, it adheres strict regulations
and rules of the company. The effectiveness of workforce is reduced.
Group behaviour approach
This approach relies on the individual’s behaviour and attitude; recognizes the
importance of behavioural processes (Ehrhart and Naumann 2017). The demerit of this
method is that it does not fit into the definition of management concept and theories because
the planning and structural organisation is very important for closer integration in the
organisation.

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Interpersonal behaviour approach
This methodology lay emphasis on the leadership, employees’ behaviour, relations
and motivations. The drawback of this methodology is that it doesn’t considers organising
and planning (Bales 2018). Google for instance focuses on the mentality of the employees.
This is justified by the working environment it has created for their staffs and employees.
Human relations approach
In this approach, workers are self-motivated and a participative style of management
can be observed which helps the managers to efficiently deal with the employees. This
methodology is better than the task oriented approach. The drawback of this approach is that
it doesn’t take into account the productivity.

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References
Andrassy, B., Vlaj, D. and Beaugeant, C., 2016. Recognition performance of the siemens
front-end with and without frame dropping on the aurora 2 database. In Seventh European
Conference on Speech Communication and Technology.
Ardianto, D. and Tanner, K., 2015, July. Knowledge Management Governance In
Multinational Companies: A Case Study Of Siemens. In PACIS (p. 18).
Baez, B. and Abolafia, M.Y., 2014. Bureaucratic entrepreneurship and institutional change: a
sense-making approach. Journal of public administration research and theory, 12(4), pp.525-
552.
Bales, R.F., 2018. Personality and interpersonal behavior.
Bass, M. and Paulish, D., 2015, May. Global software development process research at
Siemens. In Third International Workshop on Global Software Development (pp. 8-11).
Delso, G., Fürst, S., Jakoby, B., Ladebeck, R., Ganter, C., Nekolla, S.G., Schwaiger, M. and
Ziegler, S.I., 2015. Performance measurements of the Siemens mMR integrated whole-body
PET/MR scanner. Journal of nuclear medicine, 52(12), pp.1914-1922.
Ehrhart, M.G. and Naumann, S.E., 2017. Organizational citizenship behavior in work groups:
a group norms approach. Journal of applied psychology, 89(6), p.960.
Foss, B. and Stone, M., 2019. Successful customer relationship marketing: new thinking, new
strategies, new tools for getting closer to your customers. Kogan Page Publishers.
Grunig, J.E., 2015. Paradigms of global public relations in an age of digitalisation. PRism,
6(2), pp.1-19.

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Hinterhuber, A., 2014. Customer value-based pricing strategies: why companies resist.
Journal of business strategy, 29(4), pp.41-50.
Hornung, S., Rouseau, D.M., Glaser, J., Angerer, P. and Weigl, M., 2016. Employee-oriented
leadership and quality of working life: Mediating roles of idiosyncratic deals. Psychological
Reports, 108(1), pp.59-74.
Kuebler, A., Mertens, P., Russell, S. and Tevis, R.E., 2014. Enterprises face the ageing
demographic: some options to overcome demographic challenges in a multinational
company. International Journal of Human Resources Development and Management, 9(2-3),
pp.275-293.
Nielsen, B.B. and Ciabuschi, F., 2016. Siemens ShareNet: Knowledge management in
practice. Business Strategy Review, 14(2), pp.33-40.
Onkvisit, S. and Shaw, J., 2018. International marketing: strategy and theory. Routledge.
Siemens.com. (2019). Our culture - Siemens Global Website. [online] Available at:
https://www.siemens.com/about/en/values-vision-strategy/our-culture.htm [Accessed
5 Sep. 2019].
Van Dijk, B. and Oosthuizen, C., 2017. The Siemens vision.