Subject category:
Strategy and General Management
Published by:
IBS Case Development Center
Length: 9 pages
Data source: Published sources
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Abstract
In January 2005, Klaus Kleinfeld succeeded Heinrich von Pierer as the 11th Chief Executive Officer of Siemens AG. Although under the tenure of Heinrich von Pierer, Siemens had achieved significant sales and profits, the operating profit margin of the company was only 5% as compared to 11% achieved by its competitor, General Electric. Also, the increasing unemployment and labour costs in Germany, coupled with several loss making units in Siemens, were also among the major problems being faced by the company. Kleinfeld, known for his successful turnaround of the ailing Siemens unit in the US, was expected to restructure Siemens AG. However, analysts were skeptical about Kleinfeld''s US style of management. This case study provides scope to discuss the problems faced by Siemens AG, as well as the restructuring strategies adopted by Klaus Kleinfeld being amongst the challenges, owing to his American style of functioning.
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Abstract
In January 2005, Klaus Kleinfeld succeeded Heinrich von Pierer as the 11th Chief Executive Officer of Siemens AG. Although under the tenure of Heinrich von Pierer, Siemens had achieved significant sales and profits, the operating profit margin of the company was only 5% as compared to 11% achieved by its competitor, General Electric. Also, the increasing unemployment and labour costs in Germany, coupled with several loss making units in Siemens, were also among the major problems being faced by the company. Kleinfeld, known for his successful turnaround of the ailing Siemens unit in the US, was expected to restructure Siemens AG. However, analysts were skeptical about Kleinfeld''s US style of management. This case study provides scope to discuss the problems faced by Siemens AG, as well as the restructuring strategies adopted by Klaus Kleinfeld being amongst the challenges, owing to his American style of functioning.