2014: The recent history of changing the Siemens corporate structure clearly demonstrates the general problem large companies face:
– Production: how few production divisions are necessary for efficiently manufacturing large amounts of different products – how many units are necessary for a sustainable customer orientation and relationships?
The new structure of Siemens will have 9 manufacturing divisions; increasing the former 4 sectors to 9 divisions will lead to reduced production efficiency; fewer scaling effects will occur since production units will be smaller however customer orientation will be enhanced; products can be fitted more tightly to customer demands.
– Sales: how much sales work is assigned to production units and how much to regional offices; Siemens has sales offices in about 160 countries, since 9 divisions cannot support sales staff in each country and the sales offices personnel cannot acquire all the necessary knowledge of all the products of the 9 divisions, sales work must be divided between production units and country personnel; that is a weak point which can’t be avoided; a compromise has to be found, how it looks has not been told; how well it works has not be made public. In this regard it is critical who makes the final decisions, production division or sales; since responsibilities for production divisions and for regional units are concentrated in one board member these final decisions might be (very) political.
– Healthcare, March 2018:
production and sales are strictly limited to this division and they do not interfere with other production facilities nor with customers of other divisions, that is optimal for spin off; it was the reason for Healthcare to be put on an Initial Public Offering (IPO), now Siemens Healthineer AG is a joint-stock company.
P. S. These considerations are based on public information in the media. They are to illustrate theoretical findings. If the used assumptions prove to be different, different conclusions might possibly to be taken. – Comments welcome, see impressum.
— More? See: Business Organization System Theory
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