Siemens Case Report

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The main issue drawn from the case, “Siemens AG: Global Development Strategy,” focuses on choosing the appropriate organizational design. To organize a business for innovation, it must first be determined whether an innovation is autonomous or systemic. It must also be determined whether the capabilities needed to produce the innovation can be obtained easily or must be created. Siemens focus was on an international development strategy, rather than a domestic one. This strategy resulted from three main factors. The first was the likelihood of labor shortages in the event all product development was centralized in Munich. Secondly, exceedingly customized solutions are often required for telecommunications customers and must be completed as quickly as possible. Lastly, in theory time zone differences could be used to conduct a continuous development strategy, although this idea fails in practice due to the remarkably high level of coordination required between overseas counterparts.
As discussed in the article, “Organizing for Innovation: When is Virtual Virtuous?” global development network carries many prospective benefits, such as the potential to gather the top researchers from around the world, increase in the scope of research with increased resources and knowledge, save money by building in cheaper countries, and improve research quality and standards through internal competition and collaboration. Likewise, there are also many potential risks, such as large inconsistencies between different centers, difficulty in coordinating international efforts, tensions between centralized and global centers, and slow troubleshooting processes. Yet, one of the more obvious problems encountered by Siemens was the cultural differences between developers. This is most clearly seen between the Indians and Germans working in the Bangalore center. The German employees were…...

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