He has been equally tough on some sacred pieces of the Siemens empire. Founder Werner von Siemens…

He has been
equally tough on some sacred pieces of the Siemens empire. Founder Werner von
Siemens made his name laying intercontinental telegraph lines in the mid-1800s,
but that didn’t stop Kleinfeld from getting rid of communications businesses.
He paid Taiwan’s BenQ Corp. to take the money-losing mobile-phone division off
his hands at a total cost to Siemens of $1.4 billion. And he put most of
Siemens’ telecommunications-equipment business into a joint venture run by
Finland’s Nokia Corp. But the Nokia deal has been delayed until questions about
the bribery scandal are cleared up. In
»

He has been
equally tough on some sacred pieces of the Siemens empire. Founder Werner von
Siemens made his name laying intercontinental telegraph lines in the mid-1800s,
but that didn’t stop Kleinfeld from getting rid of communications businesses.
He paid Taiwan’s BenQ Corp. to take the money-losing mobile-phone division off
his hands at a total cost to Siemens of $1.4 billion. And he put most of
Siemens’ telecommunications-equipment business into a joint venture run by
Finland’s Nokia Corp. But the Nokia deal has been delayed until questions about
the bribery scandal are cleared up. In September 2006, BenQ declared the German
handset unit insolvent. Although Kleinfeld insists he thought it had a future
under BenQ, workers have charged that he should have foreseen the disaster. In
the face of pressure from labor leaders and German politicians, Siemens
ultimately coughed up $46 million to aid workers who lost their jobs. Some
Siemens watchers say Kleinfeld has become more cautious following the bribery
investigation and the uproar over his restructuring moves. Those controversies
clearly rob him of political capital, and plenty of people both inside and
outside Siemens would surely love to see Kleinfeld fail. Says a consultant who
has worked closely with Siemens: “Some people are betting that he doesn’t
survive and that they can go on in the normal way.” Kleinfeld, though, has no plans
to give up, and he is pressing to reshape the “normal” ways in which the giant
company operates even as the investigations continue. Says Kleinfeld: “We are
fitter than ever.”

1. What are
the industry forces that dominate Siemens’ industries?

2. What are
the different types of responsibility that Kleinfeld shoulders in his job as
CEO? Do you consider them to be strategic responsibilities?

3. Do you
think that the level of strategic turbulence and restructuring that Kleinfeld
faces is common in business? Do you believe that Kleinfeld helps to create this
turmoil?

4. How do
you see the U.S. and German business environments as different?

5. To what
degree do you believe Kleinfeld must simply react to his environments as
opposed to “creating” them?

»

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