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siemens case study

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Siemens Case Analysis Introduction: Siemens Company is a well-known firm that operates in more than 160 countries in the world. Headquarters are located in Munich and branches called Research & Development Center (RDC) are strategically located world wide. The company specializes in many domains such as telecommunications, space probe technologies, data systems, heavy electrical equipments, nuclear plants, medical technologies and railroad equipment. There is presently a strong competition in these fields with players like Alcatel, Lucent and Ericsson. On more precise market like cell phones, Siemens also has big competitors such as Nokia. Over the decades, the company has been recognized for its business philosophy: "Second is best". They therefore have a tendency to take someone else's idea and try to improve it the best they can. Siemens is also conservative on many points like its credit rating. In 2000, Siemens was supporting 120,000 patents, employing 53,000 persons and investing 10 billions $ in research and development. Siemens was also known to be quite conservative. Either for their business strategy or their economical status, they always tried to be really safe. On another side, the company had developed a legendary ability to manage large, complex projects and prided itself on quality and durability. Siemens was using since its beginning a traditional German consensus-building style management but slowly change it to a more US-Style management mainly based on General Electric model. Following this change, Siemens introduce a ten-point plan that includes many elements like divesting poor-performing units in favour of strengthening remaining businesses with the potential to become world's leader in their field, setter tougher profit targets for managers, trying ...read more.


For example, the product the Indians worked on was considered as inappropriate as the interfaces where too flashy for the markets it targeted. On a same basis, RDC in United States also had problems. Communication was a big problem; Indian workers never say no at first sight but can call you back four days later to tell you that they cannot manage to do what you asked them. These delays might cost a lot of money to Siemens. 2. Research and development The Indian and American situation show a lack in management in the development of research and development. It is one of Siemens main priorities to invest in research and development. Siemens spent over 10 billion $ in 2000 in research and development and employed 57 000 employees worldwide just for that purpose. As telecommunication markets are very volatile and products get outdated very fast, it is important to stay on top. Competition is increasing with Internet communications becoming more and more accessible; Siemens has to improve products very fast. This is why slow product delivery and delays can't be acceptable. The fact that highly-specialized people are involved makes it even harder to manage; managers have to trust specialists sometimes as they can't take their place, lacking the knowledge. As American economist and Nobel laureate Kenneth J. Arrow stated, "The central economic fact about the processes of invention and research is that they are devoted to the production of information." R & D outcome can never be predicted 100% accurately; there are always unplanned problems that are encountered. ...read more.


The requirements where given only partially to Bangalore's workers and kept on coming gradually during the project. Making sure that the clients requirements are met during the project is a crucial part of such a project. Munich and Bangalore's managers should have talked to the client in order to make it clear for both parties what are the goals to be achieved in the project. For globally dispersed teams, it is even harder to make requirements clear because of language differences, as people do not use the same technical jargon in every country. We believe that if a greater effort had been put to communicating the specifications, less problems would have been encountered during the project. Communication should also be the key to good projects. The more communication between parties, the less misunderstanding, the more effective the work will be. We do not think that relocating the project would be a good idea. It would cause very big delays and high costs. Working on somebody else's project can very difficult, the specialist who have created the software know it inside out and can more easily detect its faults. Conclusion Siemens encountered many problems in its Indo-German relationship due to cultural difference, R & D management and global projects. To solve these problems, we suggested many solutions: cultural sensitivity training, giving more independence to Bangalore, adaptation, structural intervention, managerial interventions and pr�cising the project specifications earlier in the project and directly with the client. We think these solutions will solve the problem. 1http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml;jsessionid=QBDYL3XJ3YG0UAKRGWCB5VQBKE0YOISW?id=R0611D&referral=2341 2http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml;jsessionid=QBDYL3XJ3YG0UAKRGWCB5VQBKE0YOISW?id=R0611D&referral=2341 ?? ?? ?? ?? Global Management Strategy Siemens Case Adem-B�gin, Bouchard, Gendron, Riopel-Par� May 31st, 2007 ...read more.

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