Chapter 3: THE MANAGERS ROLE IN STRATEGIC HUMAN RESOURCE MANAGEMENT Application Case: Siemens Builds a Strategy-Oriented HR System

Overview of the company: Siemens was founded by Werner Von Siemens on the 12th of October 1847. It is a German engineering company, the largest in Europe. The company has three main business sectors: Industry, Energy and Healthcare; with a total of 15 divisions. Siemens international headquarters are located in Berlin, Munich and Erlangen, company. Worldwide Siemens and its subsidiaries employ approximately 400,000 people in nearly 190 countries and reported global revenue of 76.651 billion Euros for the year of 2009. The company provides customers with technology solutions in six business segments: information and communications, automation and control, power, transportation, medical, and lighting. Siemens markets a range of products, including computers, digital medical equipment, light rail transportation components, light bulbs, household appliances, and more. .In other words, Siemens became a world leader by pursuing a corporate strategy that emphasized diversifying into high-tech products and services, and doing so on a global basis. Moreover, its top competitors are ABB, GE, and Schneider Electronics. Human resource management plays a big role at Siemens. It depends heavily on HR especially on employee selection, training, and compensation than in the other firm, and globalization requires delivering these services globally. However, Siemens has basic themes of its HR strategy which we can summarize in the following section: Employees must be able to learn on a continuing basis. That means Siemens employees must be able to understand the needs and the requirements of their customers in time to identify and take advantage of growth opportunities.

Excellent education and professional training is Siemens global aspiration. When it comes to their employees educational background, their standards are high. Because according to Siemens, only well-educated and highly motivated individuals can create the leading edge technologies and innovations. In addition to that, well-trained technical employees are also vital

to the companys success. That is why they are currently involved in developing training programs for a variety of occupational profiles. The training programs now focus on not only on technical expertise but also on methods of competence and soft skills.

The last theme for Siemens is mutual respect and integrity. They respect personal dignity, privacy, and personal rights of every person in the company. Siemens works together with men and women of various nationalities, cultures, religions and races. They tolerate no discrimination and no harassment or offence. Furthermore, they are open and honest and stand by responsibilities they are obligated to fulfill. These principles apply to both, internal cooperation and conduct towards external partners.

Question 1: Based on the information in this case, provide examples, for Siemens, of at least four strategically required organizational outcomes, and four required workforce competencies and behaviours. ANSWER: Strategically Required Organizational Outcomes: Strategically required outcomes refer to those company goals that involve long term benefits to the businesss profits and operational processes. In other words, strategic objectives are aimed at fulfilling all possible opportunities available to the business in the future, which are the desired outcomes. These can be in terms of internal and external expansion, a growth in the businesss share of the market and the ways in which such objectives will be achieved. There are essentially three levels of strategic planning; corporate-wide strategic planning, competitive strategic planning and functional strategic planning. On a corporate level of strategy, a company such as Siemens has successfully maintained a related diversification strategy. The company maintains its core competency by specializing in electronic products and machinery while catering to different sectors such as hospitals, construction firms and individuals. In order for Siemens to continue with this current strategy, the company needs to consider these four main strategically required organizational outcomes: 1. Deliverance of quality products and services to customers 2. Expansion of products and services in different countries 3. Perception of brand image

4. Streamlining their strategic objectives successfully with the organization structure and culture. These four outcomes can be achieved only when corporate, competitive and functional outcomes have been established. Based on the information derived from the case, it seems that, what Siemens aims to concentrate most on is geographical expansion. This would involve expanding their global reach to countries that the company has yet to start catering to. The business may also be considering forward vertical integration by opening retail stores around the world so as to increase brand awareness and improve their brand image worldwide. These strategies would help Siemens achieve strategic outcomes such as to be recognized globally on a greater level and to be able to increase their customer base and market share in every country they are capable of selling their products in. In order to be recognized globally as a reliable and high quality brand, Siemens may aim to fulfill these corporate strategies by implementing competitive tasks such as a production and marketing strategy that involves differentiating their product from those of other giant firms within the same industry. By influencing consumers to believe that their products are truly different than others in terms of the way they are manufactured (quality of parts used, method of production and assembly) this will increase the rate at which customers, including businesses and individuals, value the Siemens brand name worldwide. Competitive outcomes can only be achieved if functional outcomes have been implemented successfully. Examples of functional strategic outcomes are successful cultural training of employees, efficient and timely recruitment of employees who possess multi-lingual and multi cultural skills while having the required technical knowledge of electronic machinery. By focusing on the language proficiency and cultural knowledge of its employees, the business recognizes how important it is for employees to be able to understand consumer psychology and implement it while communicating with customers to influence their buying decisions. Workforce Competencies: Competence can be defined as a standardized requirement for an individual to properly perform a specific job. It encompasses a combination of knowledge, skills and behavior utilized to improve performance. More generally, competence is the state or quality of being adequately or well qualified, having the ability to perform a specific role. Siemens requires that employees have the ability to learn on a continuing basis so that they have the ability to deal with different tasks since Siemens HR strategy states that a living company is a learning company. The high-tech nature of Siemens business means that employees must be willing to develop

and enhance their job performance through training programs, whether on a technical level or with the motive to learn more about other cultures and cultural ethics. Besides this the ability to adapt to different, nationalities, cultures, and languages is a required competency for Siemens as this will allow their employees to perform well when it comes to expanding the company globally.

Desirable workforce competencies for Siemens an be summarized into these: Employees, irrelevant of their ethnic background, are made capable of communicating, understanding and catering to customers worldwide effectively, with minimal miscommunication, if any Employees are willing to transfer their work position from one region to another and can easily adapt to a new place because they are knowledgeable of the countrys culture and work ethics Employees of different ethnicities are capable of communicating and working with each other in teams comfortably, while being highly productive in their collaborations and open to learning from each other. Employees are capable of strategizing different sales and marketing techniques based on how each technique will work differently in each region of the world. In other words, they are capable of realizing what goods and services are desired most from Siemens by customers in different parts of the world

Question 2: Identify at least four strategically relevant HR system policies and activities that Siemens has instituted in order to help human resource management contribute to achieving Siemens strategic goals. ANSWER: Siemens needs to plan how they will compete with others in a global market and how they will improve the quality of their services or the products that they are offering. They also need to ensure that customers are stratified with what the company is offering. All these requirements must be fulfilled effectively using their human resource policies.

Firstly, Siemens HR policy includes the provision of learning facilities for their employees to increase their knowledge. This is expected to enhance their skills which will reflect on the way they will represent the products or the services. Involving employees in these workshops will provide them with the required expertise to come up with new solutions for project issues in their respective fields.. Moreover, the employees are likely to remain loyal and dedicated to company goals as a result of Siemens providing knowledge and management development opportunities to them. Secondly, Siemens aims at building openness, transparency, fairness and supporting diversity. This will allow for a friendly environment in the company and reduce the possibility of any hostility amongst the workforce. Also, it will encourage employees to cooperate with the company, which will help in enhancing the companys reputation as employees learn to cooperate with each other resulting in improved products and services and greater customer satisfaction. Thirdly, Siemens aim on utilizing a diversified workforce to meet its globalization needs can be met by using a selective recruitment and dismissal strategy that is based on hiring individuals who meet specific requirements involving a set standard of technical skill as well as soft skills and other criteria. Examples can be language proficiency, past work experience in foreign countries, a confident personality and an efficient work style. Siemens may re- evaluate its current employees to determine whether they match up to their standards thus ensuring that the workforce is capable of providing the outcomes required by the company. Finally, the cross culture policy that Siemens adapted has a great impact on the companys performance and is another of its HR policies being successfully implemented. Since Siemens is operating in 190 countries and have more than 40,000 employees in these countries, it is to be understood that the business wants to focus on employees working in regions all over the world and adapting to these places without any problems. Siemens requires from employees to understand the differences between the cultures of the different counties that they are operating in and know how to avoid any clash of company policies and the employees culture.

Question 3: Provide a brief illustrative outline of a strategy map for Siemens. ANSWER:

Increase global awareness and reach of Siemens, especially in developing economies like China and Russia

Be the leader in technological and energy related innovations by staying ahead of competitors in R&D and being the first to provide ground-breaking solutions for such problems

Invest in R&D for technological solutions, make forecasts of economic changes worldwide and how it will affect the business, keep track of climate changes and the effects on the environment, keep track of advances in technology, maintain a flexible rapid-response organizational culture, maintain cost-effective operations

Hire and train the workforce to be capable of adapting to new situations and is capable of working to achieve innovate solutions to challenges faced in present times

Encourage employees by providing them with monetary incentives as well as opportunities to travel and work abroad so that they are able to perform to the companys standards

Carry out projects to manufacture machinery and products to support energy solutions, expand geographically on a global level

Summary: According to Siemens, this is what they believe to be their visionary goal: Continually tapping new markets with innovative products and solutions requires the kind of pioneering spirit that has made our company strong. Weve always been and always will be a pioneer of our time, focusing on innovationand technology driven growth markets- markets in which we can capture leading positions and set new technology trends- while strengthening our local presence and creating local value worldwide. Because achieving sustainable, profitable growth and outperforming our competitors is not just our time-tested strategy- its also our vision for the future. The company states that market proximity is not something that can be created at company headquarters. It can only be cultivated by maintaining close customer relationships and a strong local presence. Thats why we make sure that were always where our customers and markets are and where growth is strongest. They aim to make a concentrated presence in developing economies, especially the BRIC countries, i.e. Brazil, Russia, India and China. From a HR standpoint, this means that local employees will need to put special emphasis on learning and familiarizing themselves with these countries and their traditions, working practices, languages and type of consumer behaviour in order to achieve the objective of entering new markets successfully and establishing their presence in these markets.