From on the previous Real World View, you know that Siemens operates in many countries and has quite a diverse product offering. With such complex and broad operations, there are many factors which can affect the performance of a business sector or division. In their 2010 Annual Report, Siemens refer to their performance under a number of headings derived from their One Siemens performance measurement system and their Fit42010 strategy. The One Siemens framework reports performance measures under four headings; sustainable value creation, innovationdriven growth, get closer to customers and use the power of Siemens. Throughout the 2010 Annual Report, the targets set under One Siemens and the Fit42010 strategy programme as well as actual performance, are referred to with reference to the global economic recession. For example, on p. 54, the report states: ‘These targets were established with normal business cycles in mind, i.e., without taking into account the global recession caused by the financial crisis and its after-effects on our business over the past two fiscal years.’ Another example is on p. 100: ‘The target range for our capital structure ratio is 0.8–1.0 for fiscal 2010. We set this target based on normal business cycles, before global recessionary conditions and the adverse effects of the financial crisis.’

Questions 

1 If the performance of a divisional manager at Siemens falls short of target due an economic recession, should the manager be held accountable?

2 How might the actual assessment of divisional performance differ in recessionary times?