Friday, 14 December 2012


By Jackie, Researcher
Topic: Education
Area of discussion: Management
Chapter: Leadership: Transformational Leadership

The objective of this posting is to share a real-life example of transformational leadership. This example is based on Siemens (German multinational heavy engineering and electronics conglomerate) and its previous leader, Von Pierer (CEO of the company from 1992-2005). This posting emphasizes more on practical application as compared to theoretical concept. Ideally, leadership is extremely important in determining a company’s survival ability nowadays. It is a process by which a person exerts influence over other people and inspires, motivates, and directs their activities to help achieve group or organizational goals.

      Siemens was in a hard time during 1992 because of rising worldwide competition, having an inflexible hierarchy as well as practising conservative culture which greatly reduced decision making speed, stifled creativity and innovation (Jones & George 2003, p.459). Fortunately, Siemens’ Chairman, Von Pierer has taken a ‘shift-in-style’ approach by utilising transformational leadership. He removed two layers of middle management, downsized workforce by 7.5% through early retirement and sold slow-growing businesses at $2 billion (Miller 1995, p.53). Decision making processes were also speed up through the creation of new management boards (Boddy 2005, p.385). At the new Siemens, subordinates were given chances to critique their managers, who were in return receiving training to be more democratic and participative while employees were given ample ‘speaking freedom’ to express their thoughts.
      Jones and George (2003, p.460) highlight that Von Pierer has successfully transformed his subordinates in three essential ways. Firstly, he has ‘brainwashed’ his employees’ passive mindset and increased their awareness about the importance of their jobs as well as high performance to attain Siemens’ goals. For instance, upon realising that microprocessor sales managers were not acting on their best as they thought that their job are unimportant, he called Siemens’ top customers like Opel, Ford and Sony to critic and express their dissatisfaction for receiving lousy service and unreliable delivery schedule. Secondly, his subordinates are aware of their own needs for growth, development, and accomplishment. For example, Von Pierer has organised numerous workshop and training session as well as developing fast track career programs like TOP (Time-optimized processes) and launched a high-profile educational campaign for all level of employees. Thirdly, he also motivated his workers to work for the good of the company, not just for their personal gain or benefit. This can be seen when he tried to make all employees to think in the similar manner by inserting self-addressed postcards in the company magazine, urging them to send their ideas for improvement purposes directly to him.

      He also engaged in development consideration such as providing counselling sessions with a psychologist for managers who face difficulties in adapting to Siemens’ changes and sponsoring hiking trips to stimulate employees’ thinking and work in new ways (Miller 1995, p.52). One of the greatest outcome is a team of Siemens’ engineers working in jeans in a rented house has developed a machine-tool control system by just using one-third of the time and cost as compared to previous system. The effectiveness of Von Pierer has been portrayed in GLOBE research related to German leaders, where “tough on the issue, soft on the person” strategy seems to be the ultimate recipe for success in Siemens (Brodbeck, Frese & Javidan 2002, pp.21-24).



 Boddy, D 2005, Management: An Introduction, 3rd edn, Prentice Hall, Harlow, p.385.

 Brodbeck, FC, Frese, M & Javidan, M 2002, ‘Leadership made in Germany: Low on compassion, high on performance’, Academy of Management Executive, vol.16, no.1, pp.21-24, viewed 24 September 2012,

Jones, GR & George, JM 2003, Contemporary Management, 3rd edn, McGraw-Hill, New York, pp.459-462.

Miller, KL 1995, ‘Siemens Shapes Up’, Business Week, 30 April, pp.52-53, viewed 12 October 2012,

1 comment:

  1. "Leadership is extremely important in determining a company’s survival ability nowadays" - my friend who works at say this is essential point to the company success