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Organisational Change pattern at

Siemens, Bangalore

Krithika Rajendran

1PI11MBA74

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History of Siemens in India

• Siemens’ heritage in India dates right back to 1867when it began laying the world’s first undersea cable

from London to Kolkata. Siemens set up a branch inIndia as early as 1922, in Mumbai and Kolkata. Thoughthe company’s assets were confiscated during WorldWar II as enemy property forcing it to shut operations,Siemens re-entered India after the war. It startedoperations as the “Siemens Division” of “ProtosEngineering", a local contracting company. Siemens wasengaged in sales and service of its own brand of switchgear and switchboards. Its first workshop waslocated under the bridge of, what is today, theMahalaxmi Railway Station in Mumbai.

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History of Siemens in India• In 1957, Siemens was incorporated as a company under the

Indian Companies Act as Siemens Engineering & ManufacturingCo. of India Pvt. Ltd. In 1961, Siemens became a public limitedcompany with restricted external shareholding and was listedin the Bombay Stock Exchange a decade later.

• The Siemens Group in India comprises of 17 companies,providing direct employment to over 18,000 persons. Currently,

the group has 21 manufacturing plants, a wide network of Salesand Service offices across the country as well as over 500channel partners. It operates in the core business areas of Industry, Infrastructure & Cities, Energy and Healthcare.

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Sectors operating

• Energy 

• Healthcare

•

Industry 

• Infrastructure & Cities

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Organizational Change

• A concerted, planned effort to increaseorganizational effectiveness and health throughchanges in the organization’s dynamics usingbehavioral science knowledge.” 

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Kurt Lewin’s 3 step Model of Organizational Change

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Nature of organizational change

• Affects whole organisation

• A continuous process

• Reactive or proactive

• Perceptual and Behavioral

• Incremental or transformational

Linear and sequential

Singularly or parallel processed

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Levels of Organisational change

Level 1: Shaping and

Anticipating the Future

Level 2: Defining Businesses/

Core Competencies

Level 3:Reengineering(structurally 

changing)

Level 4: Incrementally 

changing

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Organisational Level of Siemens

• On the basis of these four levels of organisationalchange, the organisation in which I interned is inthe Level 4. In this level, the organisation has amanagement that perceives only a modest need forchange, is relatively risk-avoidant, has many 

constraints on its actions and only has a modestconsensus among them on what to do. Theorganisation’s strategic planning solely focuses on

refining an existing mission statement.

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New organisation structure in 2007

• Announcement of the planned reorganization of Siemens in early October

• ƒSet up work groups to define and plan the 3 Sectorsin mid October

• ƒPublish new margin target range for Healthcare

Sector in early November• ƒAnnounce 3 Sectors and their CEOs and Division

structure at end of November

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Cont..

• ƒAppoint and announce Division CEOs in early December

• ƒImplement new organizational structure beginning of  January 2008

• ƒLaunch project to reduce SG&A costs early in January 2008

•

ƒAnnounce new margin target bands for Sector levels• at Annual Shareholders’ Meeting on January 24, 2008 • ƒPro-forma financial reporting based on new 

organizational structure as of Q3 in fiscal 2008

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Resistance to change

• Fear of the unknown

• Economic threat

•  Job security : Unemployment

• Resource allocation

• Structural changes

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Overcoming change

Education And Communication

Participation

Facilitation And Support

Negotiation Manipulation

Coercion

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