Siemens Organizational Structure: The Hard Task of Restructuring

...

When the organization is not performing well and its operation is costly, the management usually decide to downsize. Downsizing is basically decreasing the size of the organization and its costs by firing underperforming employees to improve efficiency, productivity and effectiveness. Employees are the key of an organization, that’s why any organization should consider the well-being of employees when it comes to downsizing because there are many negative impacts that will harm the organization and its management. These disadvantages could be low productivity from the remaining employees, they will hold on to their ideas with a fear of being let go. Also, these employees will be stressed doing more than their job requires to make up for the missing employees and keep the same level of productivity. They might not be paid extra for their efforts and this will cause their morale to decrease. Furthermore, this will result in trust loss from employees where they will feel that their careers are threatened. The organization’s management should be open with their employees and communicate their decisions to them, also, they must explain to the remaining employees why they are downsizing in order to maintain their trust and to ease their fears.

We can conclude from this case that change is not easy to implement, we must take lots of factors into consideration and see whether it is possible to be attained based on our environment. Kleinfeld failed to keep the German culture in mind when he proceeded in making changes and that resulted in catastrophic outcomes for him and the organization. He wanted to go from a European structure to an American one but employees were not ready to accept it yet. The only way Kleinfeld could have succeeded was by making changes step by step and realizing that there is no need to rush into it. Nevertheless, Löscher might not have had taken the perfect steps to change but at least he managed to make the organization profitable again.

References

Advantages and Disadvantages of Downsizing Employees - WiseStep. WiseStep. Retrieved 5 December 2016, from http://content.wisestep.com/advantages-disadvantages-downsizing-employees/

Managing Organizational Change. Inc.com. Retrieved 5 December 2016, from http://www.inc.com/encyclopedia/managing-organizational-change.html

Richards, L. Why Is Change Important in an Organization?. Smallbusiness.chron.com. Retrieved 5 December 2016, from http://smallbusiness.chron.com/change-important-organization-728.html

Rick, T. (2011). Top 12 reasons why people resist change. Torben Rick. Retrieved 5 December 2016, from https://www.torbenrick.eu/blog/change-management/12-reasons-why-people-resist-change/