Strategic Management in Siemens

Essay by varunkaushalUniversity, Master'sC+, August 2005

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Siemens is a huge 155 year old multinational $77 billion German based company operating through 16 big business units with one of the world's largest communications, electronic and engineering company and 1200 fully consolidated subsidiaries in more than 190 countries, which are run by 484,000 employees.

All Siemens businesses are part of a matrix organization that combines a centralized strategic orientation with decentralized business and regional responsibilities. As global entrepreneurs, Siemens' Operating Groups are individually responsible for their worldwide businesses. Each Group has its own Executive Management, which is responsible for running Group business in accordance with company policies defined by the Managing Board of Siemens AG. The Operating Groups determine how their resources will be used. They develop their own strategies, manage their own assets and generate earnings in their respective market segments.

The Groups' international activities are conducted via regional units, which are responsible for Group-related business and earnings in a particular country or countries.

The regional units, in their capacity as regional entrepreneurs, implement target agreements, which they have concluded with the Operating Groups.

Siemens corporate structure is huge although very well organised. The Company has a two-tier management and oversight structure consisting of a Managing Board and a Supervisory Board. The Supervisory Board has twenty members. As stipulated by the German Co-determination Act, one-half of the Board's members represent Company shareholders, and one-half represent Company employees. Company employees and the supervisory board determine the managing board's employment and remuneration framework. The Annual Shareholders' Meeting elects the shareholder representatives. An assembly representing Siemens' employees in Germany elects the employee representatives. The two-tier system provides a strict separation of management and supervision and responsibilities are well defined by law.


A company like siemens with so many people, production sites, products...