MGMT20144 - Siemens and Globalization: Business Analysis Essay

This essay provides a comprehensive business analysis of Siemens, a multinational engineering company, focusing on its organizational structure, the external and internal environmental forces affecting its business, and the risks and opportunities associated with globalization. It discusses Siemens' operational segments, leadership structure, and core values, as well as the political, economic, social, technological, environmental, and legal factors influencing its operations. The analysis also covers Siemens' strengths and weaknesses, the types of risks the company faces, including financial, physical, reputational, and global economic risks, and the business measurement practices it employs, such as the balanced scorecard and benchmarking. Furthermore, the essay examines Siemens' globalization strategies in operational, financial, human resource, and marketing aspects, concluding that Siemens' focus on high-quality services and technical products provides a competitive advantage in the global market. Desklib provides similar solved assignments for students.

Running head: BUSINESS MANAGEMENT
Business Management
Name of the Student
Name of the University
Author Note

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Introduction
Siemens is German engineering company with its headquarter in Europe found in 1847. It
is one of the largest industrial manufacturing companies in Europe with its branch spread
worldwide. The company and its subsidiary approximately employ more than 372000 people
globally and earn global revenue of around €83 billion (in 2017). The company is listed in the
Euro stoxx 50 stock market indexes. Globalization refers to the trend in which the organizations
develop international influence and operate with the international market (Rothaermel, 2015). .
Siemens being an multinational organization operates more than 190 separate countries. The
goods are manufactured in Germany and exported through ships to all parts of the world. In the
span of time of 20 years, global volume of export has increases four times. In 2016, goods worth
US$16 trillion were exported Globalization faces many challenges in Siemens, in the discussion
the various risks opportunity and the organizational structure of Seimens have been talked about
(Vishnevskiy, et al., 2015).
Discussion
The organizational structure of the company
The Seimen is a German electronic multinational company that operates six segments of
the industry including healthcare, energy, IT solutions, financial service and investment of
equity. There are fourteen divisions of these six segments including the Drive Technologies,
Divisions Industry Automation, ,Industry Solutions and Mobility, Building Technologies,
Diagnostics, the division of Fossil Power Generation, and Power Distribution, the Divisions
Imaging & Information Technology, Renewable Energy, Oil & Gas, Power Transmission,

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Workflow and Solutions. The presidents and the chief officer of executive of Siemens is Peter
Loscher who belongs from Austria. Seven members head the different sectors. For more or less
160 years, Siemens have been operating more than 190 regions all over the world. A world of
talent that is proven, delivering many innovations, giving the consumers a sound edge of
competition, helping the societies to master their most major challenges, and cration of
sustainable value. Siemens values are responsibility, committing to ethical and responsible
actions, excellence, achieving high performance and excellent results, and innovation, and being
innovative to create sustainable value.
The external and internal environmental forces that affect the business
The external factors affecting the Siemens:
Political factors: The political factors refer to the degree of government intervention in the
economy along with the business policies and procedures adopted. Siemens stands to have a
strong political strength in times of uncertainty and turmoil. The reduction of the taxes and tariffs
of the capital goods can affect the company (Kotler, 2015). The company has adapted an export
control policy in which it prohibits from participating directly and indirectly in the developments
and manufacturing.
Economic factors: The economic factors include the taxation charges, economic growth rate,
inflation and exchange rate. These factors have a huge impact on the Siemens business policy. In
2008, the decrease in inflation rate resulted in the downfall in the company’s investment.
Social factors: Social factors refer to the trends that can affect the demand for the firm’s
production and changes in the taste and preferences of the customers. Increase in the
urbanization has a great impact on the company. When people move to urban areas for better

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opportunities, the company can get more employees for engaging in their company. Preference
for energy efficient vehicles with low cost increases the demand for the product. The corporate
social responsibility also a part of social factors.
Technological factors: The change in the factors of technologies changes the production and the
quality of products along with innovations. The technology can also help in the reduction of the
cost of the production (Lasserre, 2017). Siemens uses high tech and modern electronics for their
developments. This helps them to get the maximum production at minimum cost. Seimen also
has built a worldwide innovation of networks that helps them to improve processes and product
continuously.
Environmental factors: The environmental factor includes the weather climate and the desire to
protect the environment. This affects the industries to move towards more environmentally
friendly products and processes. This also a part of the corporate social responsibility of the firm.
Legal factors: The legal factors that influence the environment where the firm operates. It affects
the cost and the demand of the firm. For example, the Seimen was given the burden of reduction
of the green house gases. The foreign trade regulations and labor legislation falls under the legal
factors.
Internal factors affecting the Siemens
Strengths: The strength of Siemens includes the market leadership that it possesses through
innovations and best quality products. It produces products such as industry, health care and
infrastructure and energy. Most importantly, the Siemens is known for its financial stability and
excellence it maintains (Pogue & Miller, 2018).There consist of a strong advertisement and

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marketing which can be stated as strengths. The processes of advertisements are done through
media, TV, sports and lifestyle events.
Weakness: There are hardly any drawbacks in the company of Seimen. However, in order to
analyze the weaknesses the pointed out limitation is that the company has dependence on the
third party for the efficiency in the operations. Moreover, there had been few allegation on the
company’s corporate environment corruption has been found out.
Types of risk that the company faces
The risk of the company refers to the possibility of a loss that the company may face, it is
the uncertainty or the anticipation of loss that is made before hand. There are various kinds of
risks that Seimen faces.
The various fines and lawsuits: One of the major risks of the Seimen Company is the various
outcomes and consequences that it has to face if there is a non-compliance with the legislation.
It can result in different kinds of fines and lawsuits that can lead to a direct reputational and
financial effect on the company (Burt et al., 2014).
Financial loss: Another major risk that the company faces is the financial risk. It refers to the
direct financial losses. Examples of such losses are the various frequent accidents with
employees that need to be away from work for a long time.
Physical risks of Seimens: Destruction risks of facilities of the company and physical equipment
that is Lack of training in using equipment can generate physical losses as well as lack of
maintenance, which can culminate in fire or leakages.

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Company risk of Reputation: Any kind of misconduct of the company that can affect the heads
relevant to stakeholders can affect the reputation of the company. Maintaining a good reputation
is very important. There is a always a fear for the company about the risk. Any kind of spoilage
in the reputation can lead to fall in the goodwill. For example. Child labor practice in the
corporate operations can create huge damage on the company’s reputation and the business may
lose clients.
Global economic risk: Uncertainties in the global market of Siemens from annual report 2017,
mainly starts from the risk of that are political had very less impact on the worldwide economy.
Global pressure with Iran and North Korea enhanced and the negotiations about the U.K. leaving
the Union of Europe are complicated and tensions of separation in Spain added significant
uncertainty. These developments weigh potentially on decisions of investment but this
materialized barely in 2017 fiscal (Berend, 2016).
Business measurement practices of Seimens
The performance management refers to the monitoring process of the targets and the
performance against actual results for establishing the best process of analyzing how nicely the
business and its members are functioning as a whole as one unit. The Seimen faces high increase
in the demands for measurement of the performance of the environment (Bernardino, 2014). This
is necessary for the achieving of the development that is to make the financial stakeholders be
rest assured that the investments made by them are not at risk.
To Enhance the Performance of the different decision making procedure that the Seimen
uses are as follows:

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The Balanced Scorecard- A system, which is a strategic system of administration that
joins all the unique and quantitative measures of significance to the endeavor. The gather of the
measures all classes apparently aids in the social affair and choice of the proper execution
measures for the venture.
Another technique used to measure the performance of the Siemens business is
benchmarking. It is the comparison of the process of business and performance metrics with
bests practices of other industries. The benchmarking measures the time, quality and cost of
Siemen’s to analyze its performance. By this method, the management gets to know how well
the company targets are achieved.
The strategies globalization that the Siemens uses for achieve its goals:
Operational: A strategy for globalization for Siemens has high degree of centralization with the
headquarters that coordinating Siemens to seed out the standardization and generate the
economies of scale. The focus is on the cost reductions (Cooke & Wells, 2015). However, at
times of high demand, when the local responsiveness is high, there is hardly any
recommendation tht they can provide.
Financial: For measurement and comparison of the financial development in the market and the
competitive environment, Siemens use defined system key indicators like capital efficiency,
growth, profit margin, and capital structure and dividend payout ratio.
Human resource: The most important pillar of Siemens’ human resource strategy, alongside the
operational performance, operational excellence and corporate social responsibility, is
continuous management, development and motivation to its employees (Gallagher, 2014).

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Marketing: The processes of advertisements are done through media, TV, sports and lifestyle
events.
Conclusion
The Globalization possesses many challenges to Siemens. However, Siemens has always
been an efficient part of the global business for 162 years. The securing process of the business
is to make sure that it offers a wide range of high-class services that add value to customers
work. Siemens offers highly products that are technical with service benefits added in. This kind
of service capability drives a advantage of competition over other suppliers. This strategy is
deliberate.

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Reference list
Berend, I. T. (2016). An economic history of twentieth-century Europe: economic regimes from
laissez-faire to globalization. Cambridge University Press.
Bernardino, R. (2014). Internationalization drivers and Global Markets. Information Technology
& People, 8, 43-47.
Burt, P. J., Tower, J. R., van der Wal, G. S., & Ackerman, D. A. (2014). U.S. Patent No.
8,830,340. Washington, DC: U.S. Patent and Trademark Office.
Cooke, P., & Wells, P. (2015). Globalization and its Management in Computing and
Communications. Towards Global Localization (Routledge Library Editions: Economic
Geography), 2, 61.
Cooke, P., & Wells, P. (2015). Globalization and its Management in Computing and
Communications. Towards Global Localization (Routledge Library Editions: Economic
Geography), 2, 61.
Gallagher, K. S. (2014). The globalization of clean energy technology: Lessons from China. MIT
press.
Kotler, P. (2015). Framework for marketing management. Pearson Education India. Kotler, P.
(2015). Framework for marketing management. Pearson Education India.
Lasserre, P. (2017). Global strategic management. Palgrave.
Pogue, D., & Miller, N. (2018). Sustainable real estate and corporate responsibility. In Routledge
Handbook of Sustainable Real Estate (pp. 19-36). Routledge.

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Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
Vishnevskiy, K., Karasev, O., & Meissner, D. (2015). Integrated roadmaps and corporate
foresight as tools of innovation management: the case of Russian
companies. Technological Forecasting and Social Change, 90, 433-443.
Vishnevskiy, K., Karasev, O., & Meissner, D. (2015). Integrated roadmaps and corporate
foresight as tools of innovation management: the case of Russian
companies. Technological Forecasting and Social Change, 90, 433-443.