Managing Complexity: A System Approach - Essay Example

Topic: Managing complexity: A system approach Managing Complexity: A System Approach Question Siemens is a multinational corporation with its operations in more than 190 countries around the world. It experiences challenges due to complexity of its operations, different geographical locations, different culture orientations, different economic variable like exchange rates, a varied business environments and other challenges which hinder its smooth operations of value creation for its shareholders. However, amidst these challenges it has to stay focused on its missions and visions and stay competitive in the industry characterized by stiff competition, speed and information technology superiority, which wanes the market share for each of its firm. It has remained resilient in conducting its businesses around the world due to its robust management expertise, utilization of information technology; creativity and innovativeness in product development and matching its strategy to the local cultures, that each of its subsidiaries is located. It integrates different tools and techniques in its management practices, which has become part of its culture in conducting its business around the world. Widely known is the Human Safety Manual technique (HSM) and Soft Skill Methodology (SSM) methodologies. Human safety manual (HSM) is science-based industrial advance that takes the presumption out the protection analysis. It provides the tools to conduct the analyses, allowing for safety to be quantitatively evaluated alongside the transportation performance measures such as traffic operations, ecological impacts and constructions overheads. In addition, the methodology provides a skill to quantify changes in risks mathematically to ensure that precedence is given to those risky-related areas (HSM).It provides effective roadway and safety management evaluation programs, for instance, it emphasizes on the use of analytical tools to quantify the safety effects of decisions on planning, design, operations and maintenance. It also covers driver education, law enforcement and vehicle safety among other essential realms. Similarly, Siemens applies this methodology is minimizing its problems and addressing its future challenges. First, it applies HSM methods in identifying firms with the most potential threats to their survival, growth and profitability that may be triggered by different socioeconomic problems, management or volatility of exchange rates and pinpoints ways of dealing with them. It applies the control function in identifying which firms needs what at what time. It can then mobilize and allocate the resources appropriately so that its value is maximized. Siemens applies the HSM where is perceives each of its firms as strategic business units, operating on its own, with each of its components responsible for its own operations. Every firm is exposed to varied and unique business environment-political, economic, legal, technological, social, and ecological and each of these remote environments poses either a threat or an opportunity thus creating different economic performances by the firms. Through HSM, Siemens is able to view each of ties firm as mere competitors thus putting pressure on the expertise, skill and methodology by its senior management. (Midgley, 2000) It also identifies factors that contribute to crashes, associated potentials and their specific countermeasures enacted to prevent these problems from occurring in future. As a multinational corporation, it faces a chain of challenges and issues highlighted above. It uses cost control technique derived from HSM method in hedging risks associated with fluctuating exchange rates spread the risk from low risk-averse areas to the high risk-averse areas, for instance, Siemens firm in USA dropped in sales due to a dismal economic performance felt in USA as contrasted to those firms in other locations which were experiencing business expansions and booms due to economic growth and prosperity, for instance, in Kenya. Siemens employs hedging techniques derived from the HSM manual in mitigating such risks to ensure that each firm is supportive to the seems system as a whole. The parent firm has delegated power in making decisions based on both ethnocentricity and geocentricity orientations. However, the parent firm remains final decision maker in terms of strategic decisions and intentions in each of these firms. Through a strategic planning and forecasting derived from the HSM method, Siemens identifies factors that contribute to high sales and profits, and concerns to expand the multi-national firm in future. Siemens as a multinational faces stiff competition and tighter legislation in countries where each of its firm is operating, which slashes the potential profits from its sales volume. This makes Siemens to constantly adapt to these environments by constantly appraising its economic situations of each and every form to ensure that potential risks are mitigated. It carries out these programs through a well and informed team established to look into its problems as relates to their normal business operations (Subramanian, 2000). HSM methods is applies in all its projects, including its research and development, (R&D), marketing, production engineering and product design and Human resource factors are considered. These methods are applied in planning, project and performance appraisals, program evaluation and control to justify the meaningful of the project before resources can be employed to accomplish tasks by senior managers. In human resource section, every stakeholder is viewed as inputs into the Siemens system with a sole intention of enhancing their business operations of creating value and meeting the expectations of every stakeholder. The company values its employees as they are its key resource behind their success factors and story. There are well- instituted programs aimed at training and retraining of employees to remain competitive in service delivery to ensure that the firms gain a better competitive position in its industry. Integration of HSM methods enables Siemens multinational to support the federal government in legislative measures in business goals by promoting corporate governance, taking an ethical perspective in areas like adverting, productions, sales and full disclosure of their financial statements. According to the HSM (part B, P3), Siemens adopts the management measures to monitor and reduce the frequency and severity of risks to its business undertakings. In pursuance to this HSM codes, it initiates creativity and innovative culture in its employees, make improvements in its process and systems, and organize its stakeholders in a strategic intents, for instance, creating better relationship with major stakeholders like customers, suppliers and creditors. It screens its chain of networks, for instance, by careful benchmarking its firm’s operations against its major competitor in the market, diagnosing errors and problems, selecting appropriate countermeasures to mitigate these faults. This is to enable each and every Siemens’ firm to remain competitive and focused towards its mission and visions of being number one in the electronic industry. An economic appraisal is conducted on quarterly basis according to the corporation’s policies of performance reviews. It is noted that in application of HSM tools and techniques, Siemens remain focused on projects that are profitable, those that will reduce costs and maximize shareholder’s value.HSM methods are imperative in helping the corporation remain focused on operational excellence, cost leadership and customers’ intimacy towards their products and services, with an objective of adding value to their customers (citation needed). Question 2 If hired as a consultant, I would rather use Soft Skill Method than adopting the Human Safety Manual methods due t the following reasons: First, it is a systematic approach that deals with real-world problems, encompassing hard and soft problems. It deals with both qualitatively and quantitative aspects of the problems that firms face during their normal business operations, as contrasted to HSM with only points out the quantitative aspects of the problem. Furthermore, SSM provides a different ways of dealing with the problematic situations, for instance, the allocative efficiency that has to be adopted and problem that come as a result of delegation process and procedures (Lipsitz, 1973). Second, it is pointed out the SSM method treats the notion of the problems in terms of epistemological as contrasted to HSM which treats notion of the problems as ontological. It emphasizes a clear mental build-up used for human understanding of the real problem that is facing an organization. It tends to describe an organization as a system like Siemens Multinational Corporation which operates with its many subsidiary firms operating in different countries and each of them having the ultimate goal of making a profit, manufacture of finished products from the raw materials. It is a seven-stage technique that characterizes an organization as a learning system, which utilizes the new and modern management methods , like operational research methods which incorporates scientific tools and procedures in its attempt to solve various problems like those current facing the Siemens corporation. The economic problem of forecasting which type of service to produce is a real challenge due to rapid changes in tastes and preference s of the customers in the UK and the world market. It has to employ soft skills in negotiating contracts with more experienced suppliers, contractors and enter into countries which have better and improved market dynamics. Lastly, a survey carried out on the SSM practice indicates the following a few applications. First and foremost, organizational design which encompasses the strategic roles of structure, culture and their respective roles and responsibilities. In Siemens, its strategic missions have a well articulated role and have matched strategy to their structure to encompass a diverse role. There is a performance evaluation based on indicators financial statements, staff turnover, market share and sales volume. The SSM methods integrate a lot of leaning and training needs and their relationship with outputs. It attempts to focus on the globalization and its effects, in an attempt to keep in tandem with emerging technologies. In summary, SSM is a better approach as it contains a wider view of the organization than the HSM which only looks at the quantitative part of the organization problems. Question 3 In Siemens, the areas which need to be addressed include the following: innovativeness which encompasses product development strategies; market development in terms of diversifying into other area as noted in their annual report; environmental sustainability that need to be reduce the pollution (Coffey, 2009). The firm has employed scientific methods in market research in deterring the needs of the customers, who have diverse cultures due their different segmentation traits. The company needs to carry out further research con the efficiency of the system put n place. The company uses both the systems theory and practice in addressing its challenges of managing diverse employees, procurement with suppliers, how to incorporate brand loyalty of their customers through taking a customer-driven approach in their manufacturing processes.(Siemens, 2010).Through Utilization of SSM skills to manage contracts and address the increasing energy cost as reported in their annual documents. References I. Coffey, G W 2009.A Systems Approach to Leadership: How to Create Sustained High Performance in a Complex and Uncertain Environment: Springer: New York. II. American Association of State, Highway and Transportation www.highwaysafetymanual.org accessed on 24th Nov 2011. III. Lipsitz, L 1973.Introduction to the systems approach Educational Technology: New Jersey IV. Midgley, G, 2000.Systemic intervention: philosophy, methodology, and practice thinking. Springer: New York V. Subramanian, K 2000.The System Approach: A Strategy to Survive and Succeed in the Global Economy. Hanser Gardner: Cincinnati, OH VI. Siemens Financial annual report. accessed on 24th Nov 2011 Read More