Siemens, a multinational German electrical engineering conglomerate, was founded by the German entrepreneur Werner von Siemens in 1847. The company from the outset demonstrated an orientation toward commercialization of inventions and internationalization of operations. From a traditional power engineering and communications engineering business, Siemens AG extended its portfolio to medical and infrastructure businesses. Siemens, by virtue of its transformation from a small workshop to a global player, has become a prominent representative of the “Made in Germany” brand.
In its more than 160-year history, internationalization has been an essential part of Siemens’s corporate business strategy. With a business portfolio encompassing products, systems, and services for the energy, industry, and healthcare sectors, Siemens has positioned itself as a solution provider in more than 190 countries worldwide. The company’s inventor and research concentration is evident in the enormous number of ground-breaking inventions, for example, the new technology of telegraph (1846), a gutta-percha press (1847), the discovery of the dynamo-electric principle (1866), the construction of a telegraph line between London and Calcutta (1870), the building of Europe’s first underground rail line (1896), and the first metropolitan automatic telephone exchange (1909). By early 2008, Siemens had registered a total of 50,750 patents.
The Rise Of A Global Player
Following his invention of a pointer telegraph, Werner von Siemens, together with Johann Georg Halske, formed the Telegraphen-Bauanstalt von Siemens & Halske in 1847. One year later, the newly founded company received a major contract from the Prussian government to build a telegraph line between Berlin and Frankfurt/Main. Despite the success of the early years, the company had a few poor years until new orders from Russia and Britain arrived. In Russia, Siemens & Halske began to install a telegraph network reaching from Finland to the Crimea. In Britain, the company commenced the production and laying of submarine cables. But the overseas activities did not stop here; in the 1860s, Siemens & Halske was contracted to construct a telegraph line between London and Calcutta. The significance of this project lies not only in the prestige of such a large-scale project, but also in the time-space compression of a world that had just begun to globalize. Telegrams between Great Britain and India now took only one hour. In the years that followed, Siemens & Halske opened foreign agencies in all of its focus markets.
World Wars I and II resulted in the expropriation of most of Siemens’s foreign subsidiaries and patent rights, the collapse of its markets, and the loss of capital. The postwar years were dominated by the rebuilding of Siemens’s manufacturing capabilities and its business abroad. As Siemens acknowledges today, the company’s total workforce in late 1944 included approximately 50,000 forced laborers. By the end of the war, four-fifths of the company assets, according to Siemens, had been lost and destroyed.
In 1966 Siemens & Halske AG, Siemens-Schuckertwerke AG, and Siemens-Reiniger-Werke AG merged to form Siemens AG. The new company was divided into six independent operating groups, that is, Components, Data Systems, Power Engineering, Electrical Installations, Medical Engineering, and Telecommunications, plus five central departments. In the early 1990s, further restructuring measures took place. The organization was now split up into 15 smaller operating units.
The following years saw expansion into the Asia-Pacific region, acquisitions in Germany and overseas, and on March 12, 2001, the listing of Siemens on the New York Stock Exchange. Further organizational restructuring into six major business groups was undertaken: Automation & Control, Power, Transportation, Medical, Information & Communication, and Lighting.
In more recent years, Siemens has been shaken by corruption scandals resulting in the reorganization of its business into three sectors (energy products, infrastructure, and healthcare) with a total of 15 divisions, business units, and the reduction of the advisory board. The new Siemens chief executive officer, Peter Löscher, the first president in Siemens’s history to be appointed from outside the company, committed himself on the occasion of the company’s 160th anniversary to the tradition of “the House of Siemens” and to the legacy of Werner von Siemens, which he described as “a tradition of strength.”
- Thomas H. Davenport and Gilbert Probst, Knowledge Management Case Book: Siemens Best Practises (Publicis Corporate, 2002);
- Wilfried Feldenkirchen, Werner von Siemens: Inventor and International Entrepreneur (Ohio State University Press, 1994);
- Great Britain House of Commons—Committee of Public Accounts, BBC Outsourcing: The Contract Between the BBC and Siemens Business Service (The Stationery Office, 2007);
- Great Britain National Audit Office, PPP in Practice: National Savings and Investments Deal With Siemens Business Services Four Years On (The Stationery Office, 2003);
- JYrgen Kocka, Unternehmensverwaltung und Angestelltenschaft am Beispiel Siemens, 1847–1914: Zum Verhältnis von Kapitalismus und Bürokratie in der deutschen Industrialisierung [Organization Management and Employees. A Case Study of Siemens, 1847–1914: About the Relationship of Capitalism and Bureaucracy in the German Industrialization] (KlettCotta, 1969);
- Henry Loewendahl, Bargaining With Multinationals: The Investment of Siemens and Nissan in NorthEast England (Palgrave, 2001);
- Peter Löscher, “‘A Tradition of Strength,’ 160 Years of Siemens,” SiemensWorld, special ed. (2007);
- Alan MacCormack, Siemens Sharnet: Building a Knowledge Network (Harvard Business School Publishing, 2002);
- Van Dorp, Creating New Wealth at Siemens Information and Communication Solutions: A Graduation Thesis About Intrapreneurship and New Business Development (Erasmus Universiteit, 2002).
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