Siemens Case Study
EVALUATING THE CHANGE AGENT PROGRAM AT SIEMENS NIXDORF (A)
Siemens Nixdorf Informationssysteme (SNI) was the largest European-owned computer manufacturer and information technology vender in 1994. The company was created by 1990 merger between Nixdorf Computer, an entrepreneurial minicomputer firm and the mainframe computer division of Siemens AG, the German electronics giant. The company offered a broad range of computer product, from personal computer and mainframes to software and support services. In 1994, the company posted $8 billion in revenues and employed 39,000 employees worldwide. Despite its size and a strong market presence in Europe SNI has not posted a profitable quarter since merger. The company lost over $350 million in fiscal 1994. Over 65% of its products were sold in the Germany, and the company has a weak base in the growing Asian and North American Markets. While the organization has a strong technological focus, SNI was slow to respond to market changes requiring more customer responsiveness and market shifts away from large mainframe systems. In Addition, SNI’s efforts to trim high labor costs were hampered by strong union pressure and strict German layoff regulations. Industry analyst observed that the company was constrained by rigid corporate culture established during the merger. The organizational structure was considered too bureaucratic in its approach to decision making for rapidly evolving market.
In mid 1994, in the search for profitability a decision was made by the Chairman of Siemens AG (100% Shareholder of SNI) to bring in the new CEO for Siemens Nixdorf. Gerhard Schulmeyer, President and CEO of the American Division Asea Brown Boveri (ABB), a Swedish-Swiss engineering company, was chosen. Schulmeyer wanted to SNI to become more customers driven and responsive to the market, and he was convinced that the major adjustment necessary to recreate SNI could only occur alongside a radical change in the corporate
Siemens Nixdorf Informationssysteme (SNI) was the largest European-owned computer manufacturer and information technology vender in 1994. The company was created by 1990 merger between Nixdorf Computer, an entrepreneurial minicomputer firm and the mainframe computer division of Siemens AG, the German electronics giant. The company offered a broad range of computer product, from personal computer and mainframes to software and support services. In 1994, the company posted $8 billion in revenues and employed 39,000 employees worldwide. Despite its size and a strong market presence in Europe SNI has not posted a profitable quarter since merger. The company lost over $350 million in fiscal 1994. Over 65% of its products were sold in the Germany, and the company has a weak base in the growing Asian and North American Markets. While the organization has a strong technological focus, SNI was slow to respond to market changes requiring more customer responsiveness and market shifts away from large mainframe systems. In Addition, SNI’s efforts to trim high labor costs were hampered by strong union pressure and strict German layoff regulations. Industry analyst observed that the company was constrained by rigid corporate culture established during the merger. The organizational structure was considered too bureaucratic in its approach to decision making for rapidly evolving market.
In mid 1994, in the search for profitability a decision was made by the Chairman of Siemens AG (100% Shareholder of SNI) to bring in the new CEO for Siemens Nixdorf. Gerhard Schulmeyer, President and CEO of the American Division Asea Brown Boveri (ABB), a Swedish-Swiss engineering company, was chosen. Schulmeyer wanted to SNI to become more customers driven and responsive to the market, and he was convinced that the major adjustment necessary to recreate SNI could only occur alongside a radical change in the corporate