Siemens: Building a Structure to Drive Performance and Responsibility (A)

Case Solution

Jesper Sorensen, Sara Gaviser Leslie
Stanford Graduate School of Business ()

Peter Löscher became CEO of Siemens in July 2007. It was one of the most tumultuous moments in the company’s history when the company stumbled upon a compliance scandal involving alleged bribes of hundreds of millions of euros and billions of euros. in fines and fees to clear his name. Furthermore, the company’s operating groups have lagged behind their peers in terms of profitability, and have been for some time. Aside from the challenges, Lscher was the first outsider to head Siemens since the company was founded in 1847, generating more than $ 66.487 million in sales and $ 3.345 million in net profit. Klaus Kleinfeld, the former CEO, had improved the company’s performance, propelled the company toward a stronger global approach, and sold underperforming and nonessential assets. However, his tenure was interrupted by the bribery scandal. When he arrived at Löscher, he found the company to be too complex, people lacked responsibility and there were considerable tensions between headquarters and the regions. Lscher used the crisis to restructure the company from 10 operating groups to 3 sectors, introduce regional clusters to allow smaller markets to focus on sales, establish the right of way for global business, simplify financial reporting and increase efforts. of sales to market vertical markets. In addition to the changes that he Löscher made in the corporate structure, he changed the attitude of the employees and renewed the entrepreneurial and innovative spirit of the managers of the company.

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