Organisational objectives 3 On completing this chapter you should be able to: Know and understand

---

34 
Organisational objectives
1.3
On completing this chapter you 
should be able to:
Know and understand:
• 
Ethical objectives and corporate social 
responsibility (AO1)
Analyse and apply:
• 
Vision statement and mission statement (AO2)
Evaluate:
• 
Aims, objectives, strategies and tactics and 
their relationships (AO3)
• 
The need for organisations to change 
objectives and innovate in response to changes 
in internal and external environments (AO3)
• 
The reasons why organisations set ethical 
objectives and the impact of implementing 
them (AO3)
• 
The evolving role and nature of CSR (AO3)
• 
SWOT analysis of a given organisation (AO3)
• 
Ansoff’s matrix for different growth strategies 
of a given organisation (AO3)
Prepare/construct:
• 
SWOT analysis of a given organisation (AO4)
• 
Ansoff’s matrix for different growth strategies 
of a given organisation (AO4)
Setting the scene
SIEMENS’ STRATEGY FOR HIGHER PROFITABILITY
Poor planning in recent years is blamed for Siemens’ low levels 
of customer orders and a weak share price performance.
Siemens is now targeting a profit margin of at least 12%. 
To
reach this corporate objective, the company plans to reduce 
its costs by 
€
6 billion, increase competitiveness and reorganise 
its structure to become less bureaucratic.
Two stages of this new ‘Siemens 2014’ strategy have already 
been decided upon and are being implemented. First, it has 
acquired LMS International for around 
€
680 million. LMS sells 
simulation software in 15 countries for evaluating mechatronic 
systems in aeroplanes and cars. With the acquisition of LMS, 
Siemens will hold a top position in this software segment and 
can improve the innovative strength of its customers.
Second, Siemens will restructure its water technology business. In the future, the water business 
will focus on Siemens’ core competencies in automation and advanced equipment, while activities 
involved in processing and treating water and wastewater will be sold. Other elements of the new 
strategy include:
• Cost reduction – Cost savings of around 
€
3 billion are expected from the improved integration 
of the key processes of design, development and production. Around 
€
1 billion is to be saved by 
increasing global capacity utilisation.
100
share price, 
€
Siemens’:
order value, 
€
bn
25
20
15
10
5
0
80
60
40
20
2010
2011
2012
0

---

35
• Go-to-market – The sales setup will be more flexibly 
adapted to regional circumstances.
• Optimised structure and management – The company’s 
worldwide structure will be further optimised and 
redundant functions and duplicate processes will 
be eliminated. The complexity of processes and 
regulations will be reduced in order to give the 
company’s business units greater entrepreneurial 
freedom and optimise their work with customers.