AylorB_Unit10a1_ContingencyLeadershipPresentation
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AylorB_Unit10a1_ContingencyLeadershipPresentation
- 1. Contingency Leadership A Case Example of Siemens AG By: Bonnie R R Aylor For: BMGT8610 Spring 2015
- 2. What’s the Aim of this Study? • Use a specific case study to inform participants about leadership theory. • To illustrate the constructs of the leadership contingency model. • To demonstrate the dynamics of leadership in a multi-cultural atmosphere. • To represent multicultural leadership in a contingency model paradigm.
- 3. Introduction • In March, 2007 confession of the Argentine Bribery Scam (Calgary, 2007). • Out with CEO Kluase Klienfelder in with Paul Leoscher (Webb, 2013). • Six years later - Joe Keaser stepped in (Webb, 2013). • Leadership contingency model at Siemens AG
- 4. Company Overview • Siemens AG began doing business in 1847 (Siemens, 2015). • This case begins with the introduction of Joe Kaeser (Economist, 2015). • Dresser-Rand products compared to Siemens AG products. • Structural changes announced by Joe Kaeser (Larson, 2015). • Egypt and the EEDC (Larson, 2015).
- 5. What about the Contingency Model? • Connect small pieces to the whole (Mandanipour, 2012; Van de Van, 1985). • Dealing with high stress (Dunphy & Stace, 1988; Fielder, 1971). • Goals and Tasks (Mandanipour, 2012). • Example – EEDC agreement (Economist, 2015). • Task Structure and Kaeser’s goals
- 6. Current Situation • Feature Webpage – rotary motor built from used parts (Siemen’s, 2015). • Institutional display of knowledge perceptions (Beccara-Fernande & Saberwhal, 2001). • Technological representation of change (Mandanipour, 2012). • Technological Breakthrough and Rapid changes in Technology (Dunphy & Stace, 1988).
- 7. Current Financial Situation • Dresser-Rand displays a steady growth • Siemen’s shows a roller-coaster ride of growth • (Dresser-Rand, 2015) http://www.msn.com/en-us/money/stockdetails?symbol=DE:SIE
- 8. Incentives for Acquisition • Increased ability to undergo growth related risk (Dedman & Filachov, 2008; Husted, 2000). • Contingency theories of budget and change (Dunphy & Stace, 1988). • Egypt (PM Egypt, 2015)
- 9. Closing the Acquisition • Siemen’s has started depositing towards the Acquisition (Dresser-Rand, 2015) • Siemen’s had begun contributing to a Jr Stock for Dresser-Rand (2015). • Switching departmental CEO (Siemens, Press, 2015). • Contingency model aspects of leadership change (Dedman & Filachov, 2008; Drazin & Van de Van, 1985; Dunphy & Stace, 1988).
- 10. Specific Problem • Integrating Company Cultures • Budgetary Concerns • Cross-Cultural Comparison
- 11. Siemen’s Historical Change Agents Program • Operated during transition of Siemen’s Nixdorf into Siemen’s AG (Dover, 2002). • Were chosen to learn tactics for encouraging change within their departments (Dover, 2002). • Were regular employees, creating positional ambiguities (Dover, 2002).
- 12. Leadership Failure • Path-Goal Theory • Obscurities with the program • Conflict with Contingency Theory • Merger & Entrepreneurship
- 13. The New Program • Mentors & On-the-job training • Path-Goal & Leader Exchange • Contingency model of followership • Similarities between the two • Final Outcome
- 14. Current Needs • Importance of cultural syncrocity • Followers perceptions (Bryman, 1996; DeRue & Ashford, 2010). • Cultural Alignment (Mulkzyc & Holt, 2008).
- 15. Culture at Siemen’s • Kaeser – autocratic, masculine, task structured (Diskenson, et al, 2002; Fiedler, 1971; Larson, 2014; Gerber et al, 2011). • Power distance relationship (Dickenson et al, 2002). • Uncertainty Avoidance – education & planning (Dickenson et al, 2002; Larson, 2014; Siemen’s, 2015; Mandanipour, 2010). • Collectivism and individualism (Dickenson et al, 2002; Gerber et al, 2011). • Vertical collectivism, horizontal individualism (Dickenson et al, 2002).
- 16. Culture Across Regions • Comparison of USA and Germany • High power distance in Germany (Dickenson et al, 2002), low in USA. • Complimentary participative styles of leadership (Dickenson et al, 2002). • Germany has high uncertainty avoidance (Dickenson Et aa, 2002), USA has mixed features of uncertainty avoidance. • Dresser-Rand Stock (Dresser-Rand, 2015).
- 17. Action Alternatives • The two main requirements for smooth transition of change at Siemen’s AG are knowledge integration and Cultural assimilation. The next couple of slides will introduce these action alternatives.
- 18. Knowledge Integration • Restructuring for automation and technology (Larson, 2014). • Process of restructuring (Drazin & Van de Van, 1985). • Cross cultural comparison of knowledge (Drazin & Van de Van, 1985). • Barcoding and automation (Dunphy & Stace, 1988). • Tacit to explicit form using automation (Beccara-Fernandez & Saberwhal, 2008). • Teamwork and A to B (Mandanipour, 2010).
- 19. Cultural Assimilation • Comparison between US and German Contingencies • Sales and Teamwork • Final Plan – Teamwork through Egypt project
- 20. © Bonnie Renee Reagan Aylor 2015 Sunday, June 14, 2015 20 Conclusion • Company is taking the right steps. • Contingency model of knowledge. • Teamwork and automation. • Tacit to explicit knowledge. • Research needs: • Organizational change to override cultural differences. • Social performance to create cultural integration. • Model of connectivity to enhance cultural assimilation performance.
- 21. © Bonnie Renee Reagan Aylor 2015 Sunday, June 14, 2015 21 Future Thinking • Learn aspects of contingency model, including: • Task-goal structure • Organizational restructuring • Change in leadership • Knowledge integration methods • Followership theories • Cross-cultural differences • Cultural integration methods • Learned differences between path-goal and contingency models. • How to discover organizational conflicts. • Analysis of multinational cultures and their differences. • Development of a plan to facilitate cultural ambiguities. • Development of a plan to lead change. • Recognize agendas for evolving leadership theory for future implementation.
- 22. © Bonnie Renee Reagan Aylor 2015 Sunday, June 14, 2015 22 References: (April 16, 2015 ). PM Meets Siemens CEO. Egypt State Information Service. Retrieved from www.lexisnexis.com/hottopics/lnacademic Becerra-Fernandez, I., & Sabherwal, R. (2001). Organizational knowledge Management: A contingency perspective . Journal of Management Information Systems, 18(1), 23-55. Retrieved from http://search.proquest.com.library.capella.edu/docview/218928929?accountid=27965 Bjugstad, K., Thach, E. C., Thompson, K. J., & Morris, A. (2006). A Fresh Look at Followership: A Model for Matching Followership and Leadership Styles. Journal of Behavioral and Applied Management, 7(3), 304-311,313-319. Retrieved from http://search.proquest.com.library.capella.edu/docview/196732400?accountid=27965 Bryman, A, Stephens, M, à Campo, C. (1996). The Importance of Context: Qualitative Research and the Study of Leadership. The Leadership Quarterly, Volume 7, Issue 3, Autumn 1996, Pages 353-370, ISSN 1048-9843 , http://dx.doi.org/10.1016/S1048-9843(96)90025-9. (http://www.sciencedirect.com/science/article/pii/S1048984396900259) Day, D. V., Antonakis, J. (2012). The Nature of Leadership, 2nd Edition. Thousand Oaks, Ca, Sage Publications Inc. ISBN: 978-1-4129-8020-3. Dedman, E., & Filatotchev, I. (2008). Corporate Governance Research: A Contingency Framework. International Journal of Managerial Finance, 4(4), 248-258. doi:http://dx.doi.org/10.1108/17439130810902778 Retrieved from: http://search.proquest.com.library.capella.edu/docview/228359695?pq- origsite=summon&http://library.capella.edu/login?url=accountid=27965 DeRue, D. S., & Ashford, S. J. (2010). Who Will Lead and Who Will Follow? A Social Process of Leadership Identity Construction in Organizations. Academy of Management Review, 35(4), 627-647. doi:10.5465/AMR.2010.53503267 Retrieved from: http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=53503267&site=ehost-live&scope=site Drazin, R., & Van De Ven, A. H. (1985). Alternative Forms of Fit in Contingency Theory. Administrative Science Quarterly, 30(4), 514-539. http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bah&AN=4013921&site=ehost-live&scope=site Dresser-Rand. (2015). Investor Relations. Retrieved from: http://investor.dresser-rand.com/stockquote.cfm Dover, P. (2002). Change Agents at Works: Lessons from Siemens Nixdorf. Journal of Change Management, 3(3), 243-. ISSN:14697017 / DOI:10.1080/714042535 http://www.tandfonline.com/doi/abs/10.1080/714042535# Dunphy, D. C., & Stace, D. A. (1988). Transformational and Coercive Strategies for Planned Organizational Change: Beyond the OD Model. Organization Studies,9(3), 317- 334. Retrieved from: http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bah&AN=5994762&site=ehost-live&scope=site Dunphy, D., & Stace, D. (1993). The Strategic Management of Corporate Change. Human Relations, 46(8), 905. Retrieved from http://search.proquest.com.library.capella.edu/docview/231460107?accountid=27965
- 23. © Bonnie Renee Reagan Aylor 2015 Sunday, June 14, 2015 23 References (cont’d): The Economist, 412, 53-54. Retrieved from http://search.proquest.com.library.capella.edu/docview/1548682134?accountid=27965 The Economist (Online), Retrieved from http://search.proquest.com.library.capella.edu/docview/1417053935?accountid=27965 Etsy, A. (2009). An Interview with Jared Diamond. Sigma XI: The Scientific Research Society. Retrieved from: http://www.americanscientist.org/bookshelf/pub/jared- diamond Evans, M. G. (1974). Extensions of a Path-Goal Theory of Motivation. Journal Of Applied Psychology, 59(2), 172-178. doi:10.1037/h0036516 http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=pdh&AN=1974-31094-001&site=ehost-live&scope=site Fiedler, F. E. (1971). Validation and Extension of the Contingency Model of Leadership Effectiveness: A Review of Empirical Findings. Psychological Bulletin, 76(2), 128- 148. doi:10.1037/h0031454 http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=pdh&AN=1972-02829-001&site=ehost- live&scope=site Graen, G. B., & Uhl-Bien, M. (1995). Relationship-Based Approach to Leadership: Development of Leader-Member Exchange (LMX) Theory of Leadership over 25 Years: Applying a Multi-Level Multi-Domain Perspective. The Leadership Quarterly, 6(2), 219-247. doi:10.1016/1048-9843(95)90036-5 Retrieved from http://www.sciencedirect.com/science/article/pii/1048984395900365 House, R. J. (1971). A Path Goal Theory of Leader Effectiveness. Administrative Science Quarterly, 16(3), 321-339. http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bah&AN=4010081&site=ehost-live&scope=site Husted, B. W. (2000). A Contingency Theory of Corporate Social Performance. Business and Society, 39(1), 24-48. Retrieved from http://search.proquest.com.library.capella.edu/docview/199340170?accountid=27965 Ju, T. L., Shu-Hui, C., Chia-Ying, L., & Tien-Shiang, L. (2005). A Strategic Contingency Model for Technology Alliance. Industrial Management & Data Systems, 105(5), 623-644. Retrieved from http://search.proquest.com.library.capella.edu/docview/234907392?accountid=27965 Larson, A. Siemens and GE Ink Big Orders with Egypt. Electric Power, Power Magazine. Powermag.com. Retrieved from: http://www.powermag.com/siemens-and-ge-ink- big-orders-with-egypt/ Madanipour, A. (2010). Connectivity and Contingency in Planning. Planning Theory. Retrieved from: http://plt.sagepub.com.library.capella.edu/content/9/4/351.full.pdf+html Mahadevan, N. (2015, Mar 14). Siemens Signs $4.2 Billion Power Deals in Egypt; German Conglomerate Agrees to Build Power Plant in North African Country. Wall Street Journal (Online). Retrieved from http://search.proquest.com.library.capella.edu/docview/1663358529?accountid=27965
- 24. © Bonnie Renee Reagan Aylor 2015 Sunday, June 14, 2015 24 Referecens (cont’d) Miller, R. L., Butler, J., & Cosentino, C. J. (2004). Followership Effectiveness: An Extension of Fiedler's Contingency Model. Leadership & Organization Development Journal, 25(3), 362-368. Retrieved from http://search.proquest.com.library.capella.edu/docview/226926753?accountid=27965 MSN Money. (2015). Retrieved from: http://www.msn.com/en-us/money/stockdetails?symbol=DE:SIE Mumford, M. D., Friedrich, T. L., Caughron, J. J., and Byrne, C. L. (2007). Leader Cognition in Real-World Settings: How do Leaders Think About Crises?. The Leadership Quarterly, Volume 18, Issue 6, December 2007, Pages 515-543, ISSN 1048-9843, http://dx.doi.org/10.1016/j.leaqua.2007.09.002. (http://www.sciencedirect.com/science/article/pii/S104898430700118X) Muczyk, J. P., & Holt, D. T. (2008). Toward a Cultural Contingency Model of Leadership. Journal of Leadership & Organizational Studies, 14(4), 277-286. Retrieved from: http://jlo.sagepub.com.library.capella.edu/content/14/4/277.full.pdf+html Pennings, J. M. (1975). The Relevance of the Structural-Contingency Model for Organizational Effectiveness. Administrative Science Quarterly, 20(3), 393-410. http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bah&AN=4013873&site=ehost-live&scope=site PR, N. (2014, September 21). Dresser-Rand Signs Agreement to Sell to Siemens for Approximately $7.6 Billion in an all Cash Transition. PR Newswire US, September 21, Regional Business News, ESBSCO Host. http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bwh&AN=201409211952PR.NEWS.USPR.DA17842&site=ehost- live&scope=site Siemens. (2015). Siemens Global Website: Features. Siemens Corporation. Retrieved from: http://www.siemens.com/press/en/index.php Siemens. (2015). Siemens Global Website: Jobs & Careers. Siemens Corporation. Retrieved from: http://www.siemens.com/jobs/en/ Siemens. (2015). Siemens Global Website: Press. Siemens Corporation. Retrieved from: http://www.siemens.com/press/en/pressrelease/index.php Siemens. (2015). Siemens Global Website: Siemens Worldwide. Siemens Corporation. Retrieved from: http://www.siemens.com/entry/cc/en/ Sousa, R., & Voss, C. A. (2008). Contingency Research in Operations Management Practices. Journal of Operations Management, 26(6), 697-713. Retrieved from: http://www.sciencedirect.com.library.capella.edu/science/article/pii/S0272696308000405?np=y
Editor's Notes
- As noted on slides.
- In March, 2007 officials of German engineering firm Siemens AG came forth in admittance of their involvement in the Argentine Bribery Scam (Calgary, 2007). Then current CEO Kluase Klienfelder stepped down and Siemen’s hired a business leader from Argentina – Paul Leoscher (Webb, 2013). Six years later, the company realized he wasn’t working out and long time employee and chairman of the finance board Joe Keaser stepped in (Webb, 2013). This presentation will describe how Joe Keaser displays the leadership contingency model through his choices as CEO, and how the firm also display the same model.
- Siemens AG has been around since 1847, specializing in the engineering and manufacture of energy, mobility, construction, and software products and stretching services worldwide. The case study appears to begin in October, 2014 with acquisition of American owned Dresser-Rand (Economist, 2015), but it really begins when Joe Keaser stepped into office as CEO. Dresser-Rand specializes in rotary motors and after market parts (Dresser-Rand, 2015) – a perfect compliment to Siemen’s energy engineering products. According to contingency theorists – high stress periods create a need for strategizing (Dunphy & Stace, 1988; Fielder, 1971) in order to create mergers, acquisitions (Mandanipour, 2012) and restructuring (Van de Van, 1985; Pennings, 1975). Upon first stepping into office, Joe Kaeser had a new business structure in mind for Siemens – including the vision of becoming “electrified” (Economist, para 1, 2015), and becoming more automated and technological. Less than a year after the deal with Dresser-Rand, employees from Siemens, including Keaser, attended the Egypt Energy Development Conference (EEDC) and agreed to supply energy development projects in Beni Suif – this is aside from the competition of GE, who promised wind energy designs (Larson, 2015).
- According to research theorists – the contingency model shows that leaders will react to high stress through the engagement of restructuring (Dunphy & Stace, 1988; Fielder, 1971) that comes from the evaluation of all of the small parts of the organization (Drazin & Van de Van; 1985) and finding ways to show their connectedness with the whole organization (Mandanipour, 2012). Mandanipour (2012) also explains how leaders of the contingency model will create alternative tasks that will allow followers to reach a primary goal through the completion of the alternative task. An example of this in action would be the deal with Egypt at the EEDC. With such high stress indicators in place, task structure is a predominant form of leadership (Fielder, 1971) that involves cross analysis, monitoring, fiscal analysis (Drazin & Vand de Van, 1985), and knowledge management – including the consideration of tacit knowledge into explicit knowledge (Beccara-Fernandez & Saberwhal, 2001). All of this can be formed into example by the commitment to the energy development project in Beni Siuf, Egypt after acquisition of Dresser-Rand (Economist, 2015). Dresser-Rand is an establish most able to assist with the type of energy designs needed to adequately supply Beni Suif with energy (Economist, 2015). Contingency theorists focus much energy into task structure (Drazin & Vand de Van, 1985), an action model derived from research and analysis that closely relates to the way that Joe Keaser introduced himself into office at Siemens.
- Currently exposed on Siemen’s features page on the website is a record breaking electric rotary motor made entirely from used parts (Siemens, 2015). Dresser-Rand is a manufacturer of rotary motors and after market parts (Dresser-Rand, 2015). Beccara-Fernandez & Saberwhal (2012) discuss how the contingency model often displays knowledge management during change through institutional displays of knowledge perceptions. Mandanipour (2012) mention the way in which companies will often create a technological representation of internal change. Likewise, Dunphy & Stace (1988) mention the way that change created through the contingency model usually results in technological breakthrough and rapid changes in technology. Siemen’s celebration of Dresser-Rand is a clear example of this phenomenon in action.
- The Dresser-Rand (2015) company currently closes stock at 86.87 points, with an opening stock in 2010 at 42.59 points and a rate of 81.50 in 2014 – this growth has been steady with no price drops. Siemens currently closes it’s stock at 102.22 points with an up and down growth over the last five years, seeing an all time low of 70.35 points in 2012 and a high of 115.87 in April 2015 (Dresser-Rand, 2015).
- Dedman & Filachov (2008) find that when structural changes occur, firms with a low ability to handle risk need to lean on external partners in order to survive. Husted (2000) found that when the conflict between social needs and market performance creates conflict between the firm and it’s stakeholders, the use of partners and alliances can help decrease those conflicts and allow necessary change to occur. Furthermore, Diamond (2009) finds that the biggest obstacle that firms have is in the belief that they are strong enough to overcome risk. The sell out to Siemen’s will allow Dress-Rand to manage risk related to growth. Drazin & Van de Van (1985) found that firms undergoing change during crisis will undergo budgeting that creates a restructuring event that helps manage finances. Dunphy & Stace (1988) expand this by stating that firms will take on new ventures to overcome budgetary challenge that stunt innovation during crisis. This is backed by Ju et al (2005) and also by Husted (2000) who notices that firms compensate for budgetary concerns during crisis through optimization. Finally, Egypt’s very own Prime Minister, Ibriham Mahlib, asked Joe Keaser himself if he would stick to a particular budget in fulfilling his promise (PM Egypt, 2015). This proves that Siemen’s AG has clear incentive for acquisition of Dresser-Rand.
- Siemen’s will be depositing towards the acquisition until it closes in the summer of 2015 (Dresser-Rand, 2015). Siemen’s has already opened a Jr stock for Dresser-Rand and has contributed monthly funds towards the stock (Dresser-Rand, 2015). The CEO of the former power and gas department has recently been replaced with a new CEO – Willi Miexner (Siemens, Press, 2015). Replacement of CEO’s and other leadership personnel during times of crisis and restructuring is a common theme of the contingency model (Dedman & Filachov, 2008; Drazin & Van de Van, 1985; Dunphy & Stace, 1988) Drazin & Van de Van (1985) found that during times of crisis firms will reorganize and restructure their leadership to find better fits. Dunphy & Stace (1988) back this by showing how firms will attempt to optimize their leadership organization. Dedman & Filachov (2008) added to this the tendency for firms to use leadership change to optimize their leadership boards. Since the business of Dresser-Rand fits so closely with the new re-structuring plan, leadership context related to the acquisition holds major importance.
- Problems relate to the reorganization of the firm, transition ownership of Dresser-Rand, and management of the new acquisition through the EEDC project fulfillment (Larson, 2014). Some problems described by Dresser-Rand are: differences in operation practices, differences in monitoring and safety programs, and possibly complications with the smoothness of the transition, to include company cultures (Dresser-Rand, 2015). One of the major problems, as is consensus among author’s of the contingency model, is the ability to share knowledge, including facilitation and shared modeling practices (Beccara-Fernandex & Sabherwal, 2001; Dunphy & Stace, 1988; Ju et al, 2005; razin & Van de Van, 1985). Keaser has already recognized this need through his goal towards automation and technological transformation (Larson, 2015). As is a common theme of the contingency model – budgetary concerns may also be a part of the transition.
- The Change Agents program is a form of change management operated by Siemen’s Nixdorf during their transition to Siemen’s AG (Dover, 2002). The program is a success in that it trained departmental representatives how to encourage their peers about change, and how to recognize specific characteristics dealing with change in order to more adequately help lead the transition (Dover, 2002). Unfortunately, these were regular employees and it caused a conflict in the program due to the inability to understand their position in relation to their job as a change agent (Dover, 2002).
- This program inhabits many of the path-goal theories described by House (1971) and Evans (1974). The program included initiation into the program, mentorship along the program, and guidance towards the right goals (House, 1971). The change agents were also given closer access to mentors and leaders that had access to higher level executives, and who could serve as advocates to them (Evans, 1974). However, Evans (1974) also noted that it is important for the success of the model that employees understand exactly what their position is. As DeRue & Ashford (2010) contend, in order for a leader’s claim of leadership to be true, the follower has to grant that claim. Even in the frame of contingency theory, Fiedler (1971) finds that one cause of stress that weakens leadership is the inability to recognize leadership or power. The program ceased to exist and change agents that remained at the firm were switched into entrepreneurship positons and new hires took previous positions (Dover, 2002).
- After the change agents program dissolved, Siemen’s changed to a new kind of leadership – they began using a program that included mentorships and on the job training (Siemens, 2015). This mentorship program was able to utilize Graen & Uhl-Bien’s (1995) leadership exchange theory to resolve the leader-member exchange issues with the first plan, and explain the leadership position. Miller et al (2004) find that the contingency model of followership perfectly matches the leadership model, except that followers need a relational style of leadership during low stress periods. This new program resolves the need for the relational style by using mentors and interaction through on the job training. This relationship with the mentor, and ability to understand the leader’s position throughout the workday, resolves the need to create respect towards the leader by the follower found in Fiedler’s (1971) contingency model.
- Leaders of both firms need to cross-compare cultures in order to find points of conflict and convergence in order to create social order, knowledge integration, and intellectual perceptions. Bryman (1996) found that employee perceptions of leadership need to match the leadership style in order for the firm to be effective. DeRue & Ashford (2001) found that not only do followers need to accept the leadership claim for the leader to be valid, but followers also need to agree with the leadership culture in order to grant the claim. Mulkzyc & Holt (2008) also found that culture attributes of the leader need to align with the rest of the firm in order for that leadership to be effective. Siemen’s needs to align leadership style, leadership preferences, and leadership cultures between both firms to make a smoother transition.
- Siemen’s CEO Joe Keaser displays an autocratic culture of leadership in his structure of hierarchy (Dickenson et al, 2002) and shows characteristics of masculinity in his separation from the rest of the firm, focus on information and budgetary concerns, and his power structure. Keaser also displays clear evidence of a task structure style of leadership according to Fiedler’s (1971) model of contingency theory. There is a slight power distance structure at the firm in that leaders exercise separate position and are more mobile while regular employees remain static (Dickenson et al, 2002), however this distance is filled through employee positions on the management board and mentorships during leadership training (Siemens, 2015). Siemen’s also exercises an uncertainty avoidant culture in that leadership and other personnel are required to received higher levels of education (Dickenson et al, 2002; Siemens, 2015) and CEO Joe Keaser clearly articulates a researched plan that he provides incentive and consequences regarding employees willingness to follow the program (Siemens, 2015). Part of those incentives include aspects of Mandanipour’s (2010) B path to A attainment model, and threats that if fusion into the new business models does not prevail, departments will be merged into the major portion of the firm and employees let go (Larson, 2014). There is also a mixed culture of individualism and collectivism in that teams display collectivism by working together form a common goal (Dickenson et al, 2002), however these teams are led by leaders that are to implement individual programs that are separate from agendas of the rest of the firm (Gerber et al, 2011). Viewing the relationship on the multi-dimensional frame represented by House et al (2003), it is realized that the relationship is an authoritative style of the vertical collective (Dikenson et al, 2002). The culture of the rest of the firm displays signs of the same aspects of masculinity as Keaser, accept for the desire of followers for the relational style of management during low stress situations (Miller et al, 2004).
- It is important to recognize the differences and similarities between cultural regions when implementing multicultural leadership programs. Researchers find that while German businesses exercise attributes of high power distance, US firms show attributes of low power distance, however both regions display a participative leadership style due to the vertical collectivism of the authoritarian nature exercised at Siemens (Disckenson et al, 2002; Siemens, 2015). Researchers have also found that there is a high uncertainty avoidance culture in Germany and a mixed culture in the US (Dickenson et al, 2002; Gerber et al, 2011), while Dresser-Rand displays signs of uncertainty avoidance in constant growth of the stock, with no evidence of spenditures that reduce growth statistics (Dresser-Rand, 2015). Since the differences are already covered by different aspects of the cultural style, there is not much that needs to be done moving forward to integrate the cultures besides some teamwork – Dresser-Rand can benefit from the uncertainty avoidance culture commonly exercised by Dresser-Rand firms and exhibited at Siemen’s AG.
- The two main requirements for smooth transition of change at Siemen’s AG are knowledge integration and cultural assimilation. The next couple of slides will introduce these action alternatives.
- The first challenge of the new program deals with the integration of knowledge between the two firms. One helpful aspect of the program is that Keaser has already required a firm transition to automation and technology (Larson, 2014). Beccara-Fernandez & Saberwhal (2008) and Dunphy & Stace (1988) discuss the importance of managing knowledge during high stress or task structured situations within the contingency model organization. Drazin & Van de Van (1985) show that the process of restructuring involves knowledge integration and a cross cultural comparison of knowledge between departments and external partners. Dunphy & Stace (1988) mention the important of barcoding and automation in assisting the knowledge integration process for a task structured culture. Beccara-Fernandez & Saberwhal (2008) also mention the importance of changing tacit knowledge into explicit knowledge when interacting with the external environment of the immediate organization. Finally, Mandanipour (2010) mentions the ideal of teamwork in completing task B that leads to A and how this facilitates change management learning. Clearly it is important to work in teams, generate data while on the tasks, and to use barcoding and automation to organize data into a repository of information sharing between the two firms.
- Since Siemens operates under the contingency model of leadership, it is important to compare the cultural aspects of this model between the two regions to define a leadership agenda that will help to smooth the transition. Muczyk & Holt (2008) find that US firms exercise a participative style regarding decision making and goal setting behaviors, they also exercise a high requirement for monitoring. Muczyk & Holt (2008) also find that Eastern European cultures, such as Germany, utilize characteristics such as power-distance, collectivism, uncertainty avoidance, an external environmental orientation, and a concern for production among various short term projects. Bujstad et al (2006) also find that leadership styles do not match between the US and Germany, but introduce a method for reconciling the differences – the selling style that recognizes differences through bargaining and negotiation techniques using interactivity in a teamwork environment. Dunphy & Stace (1988) also find that teamwork, goal setting and management development are good methods for integrating differences within the contingency model. Even Mandanipour (2010) contends that the use of teamwork in administration of the B to achieve A model is a viable form of cultural assimilation. Siemen’s should take a sales and teamwork approach t0 their cultural assimilation, using the development project in Egypt to induce teamwork and encourage cultural melding.
- After much research, it is determined that Seimen’s is already administering the right steps per the contingency methods. The company should make consideration of the contingency model of knowledge integration to induce teamwork methods of knowledge generation and recording, and systems of automation to save and disseminate knowledge. This method will help team members to change tacit knowledge gained while working into explicit knowledge that can be shared with the external environment. However future research will need to focus on the ability for organizational change management to override cultural differences, for social performance model’s to create cultural integration, and for the model of connectivity to be utilized as a method to enhance cultural integration performance.
- These are the lesson that learners will be taking away from this case study presentation.