Germany global company Siemens AG had a turnover of almost €76 billion in 2010, recording a profit after taxes of €4 billion, according to its annual report. The company operates globally, with 405 000 employees at 1640 locations in 190 countries. Siemens is a diverse organization. Looking at the home page of the company’s website (www.siemens.com), we get an idea of how diverse. The web page presents 11 ‘product groups’:

•Automation

•Building technologies

•Communication networks

•Consumer products

•Drive technology

•Energy

•Financial solutions

•Healthcare

•IT solutions and services

•Lighting

•Mobility 

Each product group is further broken down. For example, the automation product group includes sub-products such as operator control and monitoring systems, industrial control, industrial communication and sensor systems. These products and subproducts are suggesting a quite detailed organizational structure. Looking at the ‘about’ page of the website, the company is portrayed as serving three ‘sectors’: industry, energy and healthcare. While the website does not tell us the exact internal structures, we could expect that these three sectors are subdivided into a divisional structure, given the diverse nature of the product groups above. Some activities (e.g. financial solutions) may be cross-sector and/or cross divisional too.

Questions 

1 What advantages does a divisionalized structure have for decision-making at Siemens?

2 Would a divisionalized structure be suited to fast-food giant McDonalds?