Siemens Corporation Leadership Challenges

Subject: Company Analysis
Pages: 9
Words: 2248
Reading time:
8 min
Study level: College

Today’s business world is dynamic and keeps on changing due to changes in consumer demands and developing markets. This requires old and emerging organizations to have effective, adaptable, and committed leadership to face the challenges that follow market dynamics. Without proper leadership, the challenges are likely to cripple the organization’s functionality and/or render it obsolete (Lewis, 2002). Organizational challenges largely depend on the organization’s operational strategies. Therefore, developing a diverse and a more universal way of identifying focused leaders with a range of attributes and skills to succeed in complex situations is necessary for an organization seeking to succeed (Lewis, 2002). Managing and promoting organization-wide diversity has got challenges that need to be overcome for an organization to realize the benefits that diversity brings. This essay discusses an organizational leadership challenge facing Siemens limited organization. It explains how the leadership of the organization addressed the challenge and provides recommendations to address the challenge, and help the organization to avoid similar challenges in the future.

Significant Organizational Challenge

Successful strategic plans begin with a clear understanding of the organizational challenges. Usually, the challenges arise from within and outside the organization. Therefore, understanding the challenges helps an organization to devise tactics to enable it to get rid of the obstacles, as well as identify the underlying opportunities within the challenges (Kundu, 2002). Leaders need to address the challenges proactively for the organization to have a promising future. The leadership challenge facing Siemens organization is cultural diversity. This challenge requires a strong and tactical leadership to address diversity issues for the organization to benefit from the opportunities diversity brings. Lack of diversity can deprive of the organization worldwide megatrends opportunities (Lewis, 2002). Therefore, recognizing the importance and the value of diversity can compel Siemens leadership to support activities promoting cultural diversity, which reflects the individuals and markets the company serves (Siemens, 2007).

Brief Description of the Company

Siemens Corporation started in 1957 as a private limited company (Siemens, 2006). It was named Siemens engineering and manufacturing Ltd Company by the founders. Siemens Ltd Company manufactures electrical facilities including switchboard, switch gear, several kinds of motors, generators, transformers, and X-rays to mention but just a few. The company merged with Siemens Halske AG and Siemens-Schuckertwerke AG foreign companies immediately after its founding to expand its areas of operation. Later, in 1959, Siemens bought all the assets of these mergers (Siemens, 2007). The company’s vision is to be a leading global company as well as be a local partner of choice in the global dynamic progress. Moreover, Siemens aims at delivering high quality products to its customers enabling them to realize their needs and create long-lasting solutions. The company’s mission statement is to continually maximize its customers’ business through top-notch solutions and products. The major focus of the organization is to continually satisfy its customers, shareholders, and employees (Siemens, 2008).

The company has over 400,000 employees in 190 countries across the world. This large number of employees is bounded by the company’s core values, which makes them to achieve success in their operations within the company (Siemens, 2007). The company’s core values include: being innovative; excellent; and responsible. Employees are encouraged to be innovative to create sustainable results, and achieve high performance excellent results. Moreover, they are to be responsible by committing their efforts to ethical and responsible actions. Siemens’ employees practice those values. As a result, they become charismatic, enthusiastic and reliable in answering the world’s toughest questions in technology (Siemens, 2006). Siemens activities affect many people directly or indirectly. Thus, the company takes its stakeholders’ need for information seriously to ensure that they are valued and given the best services. Siemens (2007) provides that the organization’s stakeholders include:

  • Analysts and investors
  • Customers
  • Employees and suppliers
  • Public authorities
  • Universities and research institutions
  • NGOs

The company’s corporate culture is to inform both the internal and external stakeholders at all levels of the company to make them aware of the company’s new developments and products. It constantly interacts with relevant and diverse social groups globally. However, the corporate culture lacks an organized and centrally harmonized stakeholder dialogue that arranges the employee’s ideas and opinions. This leads to cultural diversity leadership challenge, which the company has not managed to address effectively. This challenge hinders the organization from achieving its megatrend opportunities (Siemens, 2007).

The Challenge Facing Siemens Leadership

Siemens Corporation is a large organization operating in many countries across the world. Its employees come from different cultural backgrounds, status, class, and religions. Therefore, coordinating this large team to work together productively is the responsibility of the leadership of the company. Leaders should ensure that the organizational behavior is in harmony with the organizational culture. This enables the organization to overcome the challenge of cultural and ethnic differences, and have the employees interacting and working together as a team. As earlier stated, the Siemens organization faces the challenge of overcoming ethnic and cultural diversity among its employees. The company has over 427,000 employees in around 190 countries that have different beliefs, opinions, and ways of working (Siemens, 2006). Thus, it is difficult to have those employees work together productively because of their differences.

Diversity in an organization improves employee satisfaction, enables the organization to employ competent staff, improves customer relations, and drives creativity. Therefore, overcoming diversity issues such as beliefs, religions, culture, and specific ways of operation is a critical success factor that Siemens seeks to achieve. In fact, diversity is crucial for Siemens Ltd Company because of its wide market across the world. Research provides that, heterogeneous teams work more productively and succeed more because diversity leads to creativity, which in turn spearheads innovation (Kundu, 2002).

Efforts to overcome the Diversity Challenge

Being aware of the benefits of overcoming the issues of cultural and ethnic diversity, Siemens organizational leadership employed people from various cultures to optimize their creative potential to remain competitive in the future (Siemens, 2006). In addition, the company’s top management decided to instigate the Siemens Diversity Initiative. This was to act as a fundamental component of the company’s strategy. In 2008, the organization appointed a chief diversity officer, who would be responsible for managing diversity issues within the Siemens organization across the globe. The diversity initiative was to ensure that competent employees across the world are recruited as well as initiate processes that foster diversity throughout the organization (Siemens, 2006).

The chief diversity officer’s responsibility was to look for qualified individuals across the globe and recruit them irrespective of their cultural or ethnic background (Kundu, 2002). Communication, compositions, and connection comprise the levers Siemens leaders are using to foster diversity and overcome the monster of cultural differences and discrimination. Having a diverse workforce connected by a wide variety of talents, and strengthened through communication is believed to promote diversity (Siemens, 2006). However, the organization faced challenges as a result of changing consumer preferences and developing global markets. This challenged the Siemens leadership when selecting qualified experts and managers globally. To meet the challenge of market dynamics, the Siemens management took an initiative to employ experienced workers from various backgrounds and with different experiences.

The company management decided to link young talents both locally and internationally to overcome the challenge of diversity. This was meant to promote the contribution of each individual worker, and enable lively exchange of employees throughout the organization (Kundu, 2002). In addition, the diversity initiative helped to integrate the existing groups and assign them specific purposes. The Siemens leaders emphasized the importance of communication in enhancing the diversity initiative strategy. They believed that communication would raise the awareness of the diversity initiative and its purpose among employees within the organization (Siemens, 2006). All those efforts were aimed at overcoming the challenge of cultural and ethnic diversity within the organizations. The efforts have helped Siemens to become a diverse organization that values employees across the world. However, this challenge could be addressed more effectively to enable the organization to reap the benefits of diversity (Siemens, 2006).

Strategy to overcome the Challenge

Promoting and managing diversity within an organization requires the leaders to use holistic strategies that will enhance cooperation and teamwork. This is because diversity encompasses different aspects including gender, disability, and employees from different regions with various social structures: homogenous and diverse (Lewis, 2002). Therefore, the strategy to overcome the challenge of diversity should be universal. The following leadership strategies would help Siemens to overcome the challenge of diversity among its employees.

Aligning Diversity Goals with Core Business Values

This process integrates diversity issues into the organization’s core structure. Basically, diversity issues within public and private organizations entails issues related to management. As a result, the management should address diversity issues with the intent and make adjustments to enable the organization to function effectively and efficiently (Kundu, 2002). Managers or organizational leaders may have various ways to manage diversity issues, but the process should be seen as dynamic because it incorporates various aspects. Organizational leaders should assess the diversity climate to identify diversity concerns and determine whether the organization needs diversity training.

This process is known as need assessment. It helps the organization to identify the needs and the value of intervention required to manage diversity issues. After diversity assessment, the management should conduct diversity training within the organization to create an awareness of the importance of diversity in an organization, and the role differences play in individual and group dynamics. Communication between groups is core in diversity training. Issues of diversity can also be addressed by developing a diversity management plan. This strategy involves the creation of diversity management goals or action steps to implement within a specific period to address the diversity challenge gradually (Lewis, 2002). Diversity management goals should be linked with the core company values and strategy so that business values go hand in hand with diversity.

Communicating Diversity-infused Business Goals to Local Regions

This strategy entails managing the differences through business goals. The local regions are incorporated into the workforce and given the same respect and compensation like other employees. This ensures that an environment that fosters openness and candor is created. Therefore, employees are not dissuaded from airing their opinion and ideas concerning any issue within the organization. Furthermore, this strategy requires that every employee be involved in the process of devising and executing diversity initiatives within the organization (Lewis, 2002).

Ignoring the Differences

This strategy works better in a parochial type of organization. Leaders assume that there are no cultural differences within the organization or do not recognize its impact on the organization. The managers or leaders operate according to their set procedures and believe that their way of management and leadership is the best (Lewis, 2002). Thus, they disregard the effect of cultural diversity on the organization’s management. Diversity is considered irrelevant and this precludes effective management of cultural diversity. This also reduces negative effects while increasing the positive effects of cultural diversity. This strategy is the best because leaders are not judged by their cultural background but on the value they bring into the organization.

Minimizing the Differences

Leaders may decide to minimize the difference within the organization to avoid the negative effects of cultural diversity. This strategy works better for ethnocentric organizations. In ethnocentric organizations, diversity is seen as the major source of problems. Thus, managers approach the issue of diversity by minimizing diversity. However, this strategy is not the best because it ignores the value diversity brings into an organization. With this strategy, the advantages accompanying diversity are overlooked, but the strategy achieves the ultimate goal of solving diversity issues. Using this method denies the organization the benefits of having various cultures working together (Lewis, 2002).

Managing the Differences

This strategy enables the managers to use synergistic approach to diversity. Organizational leaders acknowledge cultural differences among employees and give credit to each variation (Lewis, 2002). This helps in minimizing the problem of cultural diversity and not diversity itself. Leaders using this strategy encourage employees to accept cultural differences and use them for the common good of the organization (Kundu, 2002). In addition, this strategy looks for similarities among the individual instead of the differences, this helps in setting up a healthy working environment.

Cross-cultural Training

To address the issue of diversity and benefit from its values, organizational leaders or managers should organize cross-cultural training to sensitize employees about other cultures. Cross-cultural trainings help employees stay and work at ease in other cultures. Furthermore, cross-cultural trainings enable employees to have a multicultural experience. Moreover, these trainings are essential because they enlighten employees how to deal with a complex situation that arise as a result of diversity. Cross-cultural trainings help the organization to eliminate stereotypes and preconceptions. This overcomes the practice of assigning an identity to entire groups instead of judging individual merits (Kundu, 2002). Moreover, cross-cultural trainings helps the employees to interact with various cultures.


The challenge of workplace cultural diversity is real and many organizations suffer from the challenges of diversity, which render them obsolete. However, proper management of diversity can help the organization to achieve and enjoy the benefits that come with diversity (Lewis, 2002). To address the challenge of diversity, an organization should: include all employees during the creation of diversity initiatives; foster an environment of openness; promote diversity in leadership and managerial positions; use cross-cultural training; and implement diversity workplace policies, which encourage diversity and inclusion in the company-wide strategy. Diversity in organizations is an important aspect of change that organizations must understand to do business successfully in the dynamic international market (Lewis, 2002).


Kundu, S. C. (2002). Managing cross-cultural diversity: A challenge for present and future organizations. Delhi Business, 2(2), 6-8.

Lewis, R. (2002).The Diversity Challenge: A Systematic Approach for Addressing Difference in Organizations. Journal of the Texas Association for Marriage and Family Therapy, 7(1), 63-70.

Siemens. (2006). Guiding Principles for Promoting and Managing Diversity. Web.

Siemens. (2007). Corporate responsibility report 2007. Web.

Siemens. (2008). Our Vision and Mission. Web.