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open system (2) (1) - NUST BUSINESS SCHOOL Principles of...

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NUST BUSINESS SCHOOL Principles of Management GMT 204 Assignment No. 3 BBA 2K9F Section-B Submitted to: Dr. Hina Jawaid Kalyal Page | 1
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From: Syeda Masooma Raza Umaima Azhar Cheema Javeria Munir Isra Elahi Haris Bin Saqib Date of Submission: March 1 st , 2010 Siemens Siemens AG (Berlin and Munich) is a global powerhouse in electronics and electrical engineering, operating in the industry, energy and healthcare sectors. The company has around 400,000 employees (in continuing operations) working to develop and manufacture products, design and install complex systems and projects, and tailor a wide range of solutions for individual requirements. (Siemens.com, 2007) Vision: “Industrial productivity”
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Q1) Explain how Siemens is changing to an open system. What is an Open System? An open system in simple words is a system which interacts with its environment. It is a system that exchanges feedback with its external environment. The organization analyzes that feedback and adjusts their internal systems to achieve their respective goals. The basic working of an open system in an organization is shown in the diagram below: (Robbins & Coulter, Ninth Edition) According to the diagram an organization takes in input from the environment, transforms it into outputs which is then transferred back into the environment. No organization can survive without applying this system as it would become very difficult for the organization to exist in the economy if it ignores government policies, supplier reactions, economic conditions of the country etc. Open system at Siemens The beginning of change in Siemens was started in 1990s when they decided to reorganize themselves by hiring a new team of managers who are oriented to change. Siemens slowly and gradually changed its system to an open system. The company created smaller business units in order to cut the reaction time and jump ahead of competitors (ABB and GE). As according to Hermann Franz, “European companies take longer to react”. Instead of just relying on its advanced technology that has been a major strength of Siemens, this group of managers was expected to emphasis on marketing and sales. This is also considered as an important factor for a company to achieve its goals. For example if the marketing department does not look forward to changes in customers’ tastes and preferences and if they do not cooperate with the product development department the organization’s overall performance will Page | 3
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suffer (Robbins & Coulter, ninth edition ) . The new mangers were given a global focus, which will help them in managing foreign companies. The credit of bringing this slow and easy change goes to Heinrich von Pierer (Head of the Siemens). According to von Pierer, “The changes are all part of a ‘ cultural revolution’ .
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