Case: Siemens AG: Global Development Strategy (A) 1. How would you characterize Siemens’ global development strategy? Why does it have regional development centers (RDCs) around the world? Over the years, however, Siemens had followed a strategy of shifting more autonomy to its regional centers to strengthen its global presence. First, because of local labor shortages, ICN could simply not centralize all product development at Munich. Second, having regionally-based managers, engineers and technicians facilitated rapid response to local needs such as EWSD customization. 2. What are the differences between RDCs in India, Germany and the U.
S.? How are these issues managed and resolved? Typically, German managers ran newly formed RDCs, but in later stages local managers gained more control. An ongoing tension was how much independence to provide each center. How much direction to provide developers working on subsystems in different RDCs also proved an ongoing issue. Munich headquarters typically coordinated cooperation between RDC’s through formal channels, including annual technical conferences at Munich involving representatives from different RDCs, as well as through facilitating informal, often serendipitous encounters between different RDC members at Munich. . What has gone wrong with the ADMOSS and NetManager projects? Please consider the Bangalore and Munich perspectives. As it turned out, subsystems were far more interdependent than had been assumed. Since Bangalore developers worked thousands of kilometers away from then Munich test beds, testing of newly integrated system turned out to be a major obstacle. Bangalore didn’t think of asking what loads to test with, but Munich was also fault for not telling them. 4. Decision point: What should senior management respond to the NetManager project crisis? ) Let Bangalore solve it; b) Move all decision-making to Europe; or c) Move entire project to Europe. As a result, some German executives had already suggested that NetManager development and project management should be moved to Austria, Belgium, or Portugal. In the shorter term, they argued that further delays were inevitable even if the project remained in Bangalore and that decisive action was long overdue. In the longer term, this would also bring the system developers and programmers closer to Siemens’s major customers and smooth out coordination problems with India.
