Siemens: Analyzing Organizational Structure, Environment, and Risks

This essay provides a comprehensive analysis of Siemens' organizational structure, outlining its hierarchical arrangement, key divisions, and operational sectors. It delves into the external environmental forces impacting Siemens, including economic trends, competition, and technological advancements, and explores internal factors like company culture and employee dynamics. The essay also identifies various risks faced by Siemens, such as volatile energy prices, financial risks, and global competition, along with societal and legal risks. Furthermore, it proposes business practice decisions for enhancing organizational performance, including high-performance work practices, employee engagement, and benchmarking against industry leaders. The importance of aligning key business functions like operations, human resources, and marketing with the overall strategic objectives of Siemens is also highlighted, emphasizing the need for customer-centric approaches and innovation-driven growth.

RUNNING Head: Management and Business Context
Management
and Business
Context

Management and Business Context 1
Organizational structure means hierarchical arrangement of lines of communications, authority,
rights and duties of an organization. Organizational structure is responsible for determining the
manner in which power, roles and responsibilities are controlled, assigned and coordinated along
determining the flow of information between the various levels of management (Mills, Bratton,
Mills & Forshaw, 2006). The organizational structure is dependent on the objectives and
strategies of the organization (Baligh, 2006). The focus of this essay is on the company
Siemens. This essay explores the organizational structure of Siemens, the external and internal
environmental forces and risk that impact its business along with suggestions regarding
important business functions and business practices decisions for the enhancement of
organizational performance and achievement of strategy.
Siemens follows the organizational structure of a company where the operations are organized in
three sectors with 15 divisions. The structure is managed by the managing board of the
organization. The key divisions of Siemens include infrastructure, industry, energy and
healthcare. Their positioning along the electrification value chain is maintained by the key
drivers of the business of Siemens which include electrical energy, electrification and
automation. Moreover, risk mitigation activities are always taken into consideration by way of
adopting a risk based approach (Siemens, 2018).
The business of Siemen is impacted by various external and internal environmental forces. The
external environmental factor includes the economy, competition, politics and customers and
suppliers. On the other hand, the internal environmental factors include employees, company
culture, finance, etc. (Sherman, 2018). Since Siemens is involved in the business of power
generation and transmission, it is significantly affected by the market trends of undertaking
sustainable business practices by way of shrinking their carbon footprint and making the use of
more renewable energy resources. The business of Siemens is affected by a variety of threats
relation to competitors, global environment, political factors, new technology, etc. (Pride,
Hughes & Kapoor, 2009). Market conditions such as changes in the interest rates and market
rates affects Siemens. While performing business in other countries, the profitability of Siemens
is severely impacted due to variations in the foreign exchange rates. Moreover, when new
technologies are introduced in the market or innovations take place, the complete scenario of the
market is changed due to which Siemens faces significant variations in the demand of its

Management and Business Context 2
products. The external environmental forces require Siemens to take into consideration the
strategies of the competitors for capturing the market and taking necessary steps for formulating
own strategies. Skills are required by Siemens to take necessary decisions and for performing the
day to day operations of business. For this purpose, Siemens requires to make the employment of
competent individuals who meet the eligibility criteria for employment. Proper consumer, market
and industry analysis is required to be performed from time to time in order to take into account
the changes taking place on constant basis. Therefore, the environmental forces severely impact
the business of Siemens.
Various risks are confronted by Siemens such as the volatile nature of the energy prices which
has the direct impact on the profit. Moreover, various financial risks relating to interest rates,
exchange rates and credit risk impacts its profitability from time to time (Hill, 2008). Since
Siemens have spread its operations in the global market, it experiences the risk of competition
from the major companies of this sector across the world. The competition risk, if not met
effectively, has the capability of leading Siemens towards the closure of its business and loss of
reputation. Societal risks are also experienced by Siemens during the expansion of their business
in the various parts of the world. The difference in the culture of the foreign markets leads to
difference in their needs and requirements (Hamilton & Webster, 2015). In case, Siemens do not
address and understand the culture of the place of its expansion, then it may face a risk of
alienating customers and losing its profitability position (Ferraro & Briody, 2017). When the
social structure of the place of business is not a good fit then the business faces a risk in survival.
Global economic risk are faced by Siemens due to weaknesses in certain economies, industries
and markets which leads to a unexpected fall in demand for its products and cannot be controlled
by Siemens. Furthermore, changes in the laws, rules and regulation presents legal risks for
Siemens. If proper attention is not paid towards the compliance of these laws, rules and
regulations then strict penal actions may apply on Siemens.
For the enhancement of the organizational performance of Siemens, certain business practice
decisions should be made regarding high performance work practices, benchmarking, employee
engagement, etc. Since it is the employees who work for the success of the organization,
Siemens should take steps for the purpose of empowering the employees to take better control
over the decision making related to operations and work (Macky & Boxall, 2007). This will

Management and Business Context 3
result in motivation among the employees along with an effective flow of communication that
will significantly assist them in working as a team. Siemens should also aim at achieving
employee engagement by way of restructuring process for making it interesting, challenging and
motivating. Proper information should be provided to the employees regarding the performance
and operations of the organization in order to make them aware regarding the happening in the
company and creating a sense of job security. High performance work practices should include
the financial reward to be offered to the employees for their higher performance in order to
motivate the employees (Timiyo, 2014). When the employees will get motivated, the
performance of Siemen will automatically improve. It should also include innovation or
employee suggestion programs where employees are given an opportunity for suggesting their
innovative ideas for enhancing organizational performance (Combs, Liu, Hall & Ketchen, 2006).
High performance work practices also includes HR practices relating to performance appraisals,
recruitment, training and development, etc. that focuses on the skill development and human
capital investment within the organization (Caruth, Caruth & Pane, 2008). Moreover, Siemens
should focus on the adoption of best practices that is the best ways of functioning in order to
achieve the objectives of the business. This can be done in the form of quality management,
information management, stock control, etc. which will result in enhancing the performance of
Siemens in the market. Benchmarking will allow Siemens to compare their business with the
other businesses which have attained the heights of success for highlighting the areas where there
are requirements for improvement.
For the purpose of achieving the strategy of focusing on innovation- driven growth markets,
getting closer to the customers and using its power, Siemens need to concentrate on the most
important functions within the organization. The strategy will be achieved only when the
products will be produced by Siemens in accordance with the requirements of the customers. For
this, Siemens should focus on the operations function that will plan and coordinate the resources
required for designing, producing and delivering the products to the customers. Siemens should
assure that there is availability of enough capital for the different functions performed in the
organization including research and development for bringing innovation in the products.
Siemens desires to be counted among the best businesses for which it requires to focus on its
human resource function for hiring the exceptional employees and creating a motivated,
excellent and expert team (Siemens, 2018). The employees will make best efforts for the

Management and Business Context 4
organization when Siemens will take steps for their development, by providing them equal
opportunities and encouraging cooperation across all borders. Further, Siemens should focus on
the marketing function for promoting the products to the target customers and bringing the
feedback of the customers to the organization. This will assist Siemens in increasing the sales of
the business. When Siemens will have equal focus on all the functions of the business then it will
lead the organization toward the achievement if the strategy.
Therefore, it can be concluded that the business of Siemens is affected to a great extent by the
internal and external environmental forces such as threats, trends, skills, etc. For meeting the
requirement of its customers, Siemens need to consider their needs and want, make the
employment of individuals and make the production of products in accordance with the needs.
Siemens is confronted with a number of risks while conducting the business such as financial,
global economic and societal risks. Furthermore, some business practices decisions regarding
high performance work practices, benchmarking and employee engagement should be made by
Siemens in order to motivate the employees and enhance the performance of the organization.
Also, all the functions of the business should be given equal consideration by Siemens for
achieving the strategy.

Management and Business Context 5
References
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environmental-factors-affect-business-69474.html

Management and Business Context 6
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