1. How would you characterize the strategy for competing internationally that Si
ID: 366818 • Letter: 1
Question
1. How would you characterize the strategy for competing internationally that Siemens was pursuing prior to the arrival of Peter Loscher? What were the benefits of this strategy? What were the costs? Why was Siemens pursuing this strategy?
2. What strategy was Peter Loscher trying to get Siemens to pursue with his streamlined “power and accountability” initiative? What are the benefits of this strategy? Can you see any drawbacks?
3. Does the “power and accountability” initiative imply that Siemens will ignore national and regional differences?
4. With the arrival of Joe Kaeser, the focus is much more on apps and websites. How can these individual, customer-based IT features help industrial-based IT companies such as Siemens?
Case study:
effectively reduced the power of country managers within the Siemens structure, making them directly responsible for boosting the profitability of the global businesses Löscher went further, instituting a management view process that led to the replacement of half of the company's top 100 managers. Löscher is now directly involved in the appointment of the top 300 management positions at Siemens. He also took out two layers of top management that had no operational accountability in the older company structure. His goal in making these organizational changes has been to replace managers who did not buy into a new way of doing things and to increase the performance accountability of the people who ran the sectors and business divisions. In August 2013, Joe Kaeser took over as president and CEO of Siemens after a long-term and successful reign by Peter Löscher. Kaeser instituted a "Siemens-sion 2020 as a follow-up to Löscher's human resource strategy to take the company to the next level. Kaeser joined Siemens in 1980. Today, under Kaeser's leadership, Siemens employs more than 17,500 software engineers. And though much of the conversation about technology revolves around apps and websites, Siemens is focused on using human capital to show how information technology (IT) can add leverage in advanced manufacturing.Explanation / Answer
This is a classic case of Organizational Change, or what many organizations now call the Organizational Change Model. Let us see your questions now:
1. Prior to Peter's arrival, Siemens had a strategy that was mostly legacy. While the organization wanted to deliver integrated solutions to its customers, what it did was it maintained both regional and global teams. This leads to two reporting structures - generally one becomes more powerful than the other and this leads to redundancy. This is evident from the fact that the regional executive managers became really powerful while the global team did not have too much accountability other than co-ordination.
While the benefits are that since the delivery is in the region, there is direct accountability and faster delivery if power is given to the leadership, the disadvantages are many:
Siemens was pursuing this strategy due to its focus on integrated solution delivery and it needed a regional + global model at that point in time.
2. What Peter was trying to do was simple - ensure faster delivery while ensuring that the right teams are accountable. The global team, for example, should not be present just for co-ordination - they had a much bigger role: to ensure that any project which is delivered in any of the regions can be scaled if necesary, and it is in line with the global strategies. What Peter did was he ensured people do not work in silos. The regional teams were clearly told that for their line of business, they would be responsible to contribute to the revenues at the global level.
Peter reduced redundant management levels - the earlier structure had redundant management levels and slowed things down. He tried to bring in clear accountability and also empower the right executives The focus came back to the customer.
The only draw back would be the loss of talent that Siemens would have seen through the transition - not every manager would be willing to change ways of working, and as a result there would be stiff resistance and attrition.
3. No, it will not ignore regional and national differences. What it does is it ensures the accountabilities and levels of power delegated are about right so that there is complete focus on delivery and on the customer. This has been explained in detail for you in my answer to question 2.
The regional teams are present to ensure that they take car eof the different regional flavours that each region/country brings.
4. The future of the world is going digital. Apps and websites have multiple advantages:
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