Reference no: EM131356373

Assignment: Strategic Management

Part 1

Organizational Structure and Strategic Leadership

The business firm is no longer just a place where people come to work. For most of the employees, the firm confers on them that sense of belonging and identity-the firm has become their "village", their community. The business firm of the twenty-first century is not just a hierarchy, which ensures maximum efficiency and profit; it is also the community where people belong to and grow together-where their affective and innovative needs are met (Lim, Griffiths, &Sambrook, 2010).

Reference:

Lim, M., Griffiths G., &Sambrook, S. (2010). Organizational structure. Mind Map Route.

Discuss the following questions in relation to organizational structure and strategic leadership:

•How important it is to be able to identify and distinguish between the organizational structures used to implement business-level, corporate-level, and international strategies? Give examples of various organizational structures and how they are used to develop strategies.

•What is the relationship between organizational structure and organizational controls? Are they always interrelated? What will happen to a company's competitive advantage if one or the other isn't in place?

•What are the attributes of an effective strategic leader? Discuss the value that person brings to the strategic management process.

Part 2

Case Study-Siemens(Posted at bottom)

Read the case study located in the section titled Case Studies in your textbook and prepare a 5- to 6-page report in a Microsoft Word document concerning the following situation:

Siemens is a leading global electrical engineering and electronics firm headquartered in Munich, Germany. Profiling a highly diversified company, this case addresses the issue of optimizing the business portfolio through a coherent corporate strategy. An in-depth look at the programs designed and implemented at Siemens to spur management innovation provides a unique opportunity to study an organization's efforts to facilitate the transfer corporate-level core competencies across business divisions in order to strengthen competitive position and performance.

The case opens with an introduction and a profile of the company. Management innovation activity at Siemens is then thoroughly reviewed, including the context, evolution, purpose, content, implementation, capability development, and performance measurement of the company's top+ program.

This case study demonstrates how the principles of strategic management apply to Siemens' structured and systematic approach to management innovation and business excellence. It also provides a framework for assessing the effectiveness of the company's corporate management tools and programs.

•Describe Siemens' corporate-level strategy and characterize its level of diversification. Discuss the advantages and disadvantages of the company's matrix organizational structure. Does the organizational design effectively support the needs of Siemens' corporate-level strategy?

•Describe how the company structured the top+ program. Who was responsible for oversight and coordination of the business excellence initiatives? How does the management innovation activity at Siemen's facilitate achievement of the company's corporate objectives?

•Using a balanced scorecard framework, outline the financial and strategic organizational controls used by Siemens to drive management behavior and firm performance. Are the corporate criteria balanced? Are they yielding desired outcomes for the company?

•Conduct a financial analysis using Siemens' financial performance results from 1998 to 2007 to assess the effectiveness or success of the top+ program. What recommendations would you make to improve either the design or implementation of the company's management innovation efforts?

Support your responses with examples.

Cite any sources in APA format.

Case Study Siemens

CASE 15: Siemens: Management Innovation at the Corporate Level

Markus Menz

Günter Müller-Stewens

Institute of Management, University of St. Gallen

Introduction

At the Annual Shareholders' Meeting in February 1998, Siemens announced disappointing overall results for fiscal 1997. While the firm's sales growth met shareholder expectations, net income remained largely stable. During the following weeks and months, Siemens' top management not only faced increased pressure from its shareholders, but also higher environmental uncertainty and stronger global competition than during the early and mid-1990s. The challenge for the top management team was to optimize the business portfolio in a way that promised to add substantial shareholder value over the next years. Hence, the need was to develop and implement a revised and more coherent corporate strategy.

In response to the developments in 1997 and early 1998 and to facilitate the implementation of the corporate strategy, Siemens launched its first comprehensive corporate program in July 1998. A critical part of the so-called Ten-Point Program was the top+ program, which exclusively addressed issues of business excellence and management innovation. How did Siemens design and implement the top+ program and its management innovations? To what extent and how did Siemens benefit from these efforts? These and other related issues will be illustrated in the following.

Company Profile of Siemens

Founded in 1847, Siemens developed into one of the leading global electrical engineering and electronics firms over the past 160 years. At the end of fiscal 2007 (September 30, 2007), Siemens employed nearly 400,000 people at 1,698 locations all over the world. From 1998 to 2007, firm revenues and profits increased almost every year, resulting in revenues of 72.448 billion EUR and net income of 4.038 billion EUR. Headquartered in Munich, Germany, Siemens is publicly listed in Germany at the Frankfurt Stock Exchange and in the US at the New York Stock Exchange (NYSE). By the end of fiscal 2007, Siemens' market capitalization had reached 88.147 billion EUR.1

During the period from 1998 to 2007, the business portfolio was frequently adjusted (see Exhibits 1 and 2). Examples include the spin-off of the semiconductor business under the name Infineon Technologies by an initial public offering (IPO) in 1999. At the end of 2007, the firm's portfolio consisted of the following operating groups: Automation & Drives (A&D), Industrial Solutions and Services (I&S), Siemens Building Technologies (SBT), Osram, Transportation Systems (TS), Power Generation (PG), Power Transmission and Distribution (PTD), Medical Solutions (Med), and Siemens IT Solutions and Services (SIS). In addition, Siemens Financial Services (SFS) and Siemens Real Estate Services (SRE) were part of the portfolio.

Exhibit 1: Siemens Corporate Structure 1998

Source: Siemens Annual Report 1998.

Exhibit 2: Siemens Corporate Structure 2007

Source: Siemens Annual Report 2007.

Together with about 180 regional companies in five regions (Germany, Europe other than Germany, Americas, Asia-Pacific, and Africa, Near and Middle and Commonwealth of Independent States), the operating groups were part of a matrix organizational structure (see Exhibit 2). Although the operating groups had profit-and-loss responsibility and were largely autonomous regarding their operative business activities, some influence from the central top management and central organizational functions existed. First, the group presidents were frequently also members of the overall firm's managing board. Second, although the central entity primarily exercised financial control over the operating groups, some strategic measures that affected the way the businesses operate also existed. For example, the centrally controlled operational excellence initiatives were mandatory for all operating groups.

Attachment:- Exhibit_1_and_2.pdf