Siemen AG: Global Development Strategy Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Siemen AG: Global Development Strategy Case Study Solution

In 1847, Siemens, a German-based multinational organization, established a telecommunication-based industry mainly focusing its operations on the technologically driven sector, Siemens with the passage of time expanded its operations towards generating heavy electrical generators & deployment of telecommunication infrastructure development. Siemens divided its structure into several subdivisions, it has a strong footprint backup with a well-established brand and having its global presence in around 170 countries with 17 Regional Development Centers, all having well-maintained research & development facilities. In the case below they are facing some issues relating to their operating activities, in particular to the development of an IT software, Information & Communications Network (ICN), they are also facing some cultural issues due to RDCs established at different locations around the world. The issue arises due to lack of competence of the personnel at the Bangalore RDCs who were not able to anticipate the problem on a timely basis.

The senior management at Siemens, Munich Headquarter were confident that they would resolve these issues. Making a way for a smoother research & development facility for the future also this will enable the RDCs to conduct research activities more independently from their regional location.

Characteristics of Siemens Global Development Strategy

Siemens positioned itself as a Multinational organization at an early stage of its establishment. It has opted a decentralization strategy giving powers down the stream to its regional centers.

As there was clear evidence, around 20 projects per year out of60-70 projects, local companies were responsible for preparing sales budgets and also funding the development of these projects independently from their own resources. In some cases, the regional managers started taking recommendations from their local customers prior the launch of the new projects. This exercise appeared to be very useful as the customers provided very valuable recommendation for the features to be added to the new project. This could rightly be said as an idea bank for researchers and developers,as it gave them a direction to move forward.

However, practically only a few of these ideas were usually considered.It is true that innovation is very important in a high-tech industry like Siemens, but it is also not possible to do so all the time, as there are various limiting factors that provide resistance.The starting point of projects was to split into sub projects and get assigned to managers in regional centers who were responsible for reporting to Project Manager based in Munich.

Siemen AG Global Development Strategy Harvard Case Solution & Analysis

This was usually done to ensure a high level of quality of the project, but this also reduced the regional control and affected their willingness to change. But this always seemed to be an issue of tension between the two that how much independency would be provided to the regional centers.

Coordination to increase corporation between the Head Office based in Munich and the RDC’s is done via formal channels of communication and through technologically based conferences conducted each year at Munich. In extending corporations, many challenges also arise that impacted the project cost and at a time reached to 15% of its budget.

Siemens current coordinating infrastructure is based upon Matrix Structure employed at Munich. Individuals are conducting activities in different groups known as ‘Centers of Competence’ (COC), these are further subdivided into technical lines. This structure enables the individuals to carry on their research and development activities relating to the new product,also providing a framework for continued troubleshooting of the existing products irrespective of how much old they might be.

Reasons for maintaining Regional Development Centers (RDCs)

Siemens is maintaining various Regional Development Centers to carry its research and development activities across several regions around the world. The core reason behind the idea of establishing RDCs at different locations is to maintain its research and development expenditure and due to in sufficient availability of human resource at Munich. RDCs also proved to be useful as it provides prompt support to local customers through regional technical staff, especially for providing technical support for it'sbest-selling& most reliable product EWSD.

Differences among RDCs in India, Germany & the United States

RDCs operating in India

The RDCs based in South India was developed back in 1994 in Bangalore, almost a decade old but considered to be relatively new in the context of Siemens which itself had established along history, Bangalore is considered to be the Silicon Valley of India. Siemens Bangalore RDCs shows a rapid growth within a short span of time, by increasing its workforce starting from 20 individuals, out of these 12 were German expatriates in 1994, to over 600 employees and became the fourth largest RDCs of ICN in the world. They had earned an excellent reputation for Siemens over the years, though their work. Most of them were highly talented and possessed expertise in software development and excellent communication skills. Moreover, the labor cost was also 20% lower as compared to Munich. This reduced the development expenditure of new project.

The design of individual cubicles was based on American-style for employees & separate offices of managers. Siemens corporate culture at Bangalore was mostly informal, with minimum bureaucratic controls the tiers of management here were also less in number than at Munich which enabled faster decision making and was relatively independent of their Munich Head office and muchless interested in knowing any changes made related to Munich Headquarter...............

This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.