Conflict &

Negotiation at

Siemens PK

An Organizational

Behavior Study

1

TABLE OF CONTENTS

PAGE

CHAPTER 1 ARTICLE SYNOPSIS

1.1 ARTICLE 1 “BASICS OF CONFLICT MANAGEMENT”

SYNOPSIS 1

1.2 ARTICLE 2 “CONFLICT DEFINED….” SYNOPSIS 2

1.3 ARTICLE 3 “DEALING WITH CONFLICT” SYNOPSIS 2

1.4 ARTICLE 4 “MANAGING CNFLICT” SYNOPSIS 3

1.5 ARTICLE 5 “HOW TO NEGOTIATE EFFECTIVELY

SYNOPSIS 5

1.6 ARTICLE 6 “NEGOTIATION SKILLS, MANAGING CONFLICT

AND HANDLING DIFFICULT PEOPLE” SYNOPSIS 5

1.7 ESSAY 6

CHAPTER 2 THE ORGANIZATION: (SIEMENS ENGG. CO) 9-20

2.1 SIEMENS’ VISION 9

2.2 SIEMENS’ MISSION 9

2.3 HISTORY 9

2.4 CORPORATE INFORMATION 10

2.4.1 BOARD OF DIRECTORS 10

2.4.2 MANAGEMENT 10

2.4.3 BANKERS 11

2.4.4 AUDITORS 11

2.5 SIEMENS FINANCIAL STATUS 11

2.6 PREVIUOS PROJECTS OF SIEMENS 12

2.7 RECENT AND CURRENT PROJECTS OF SIEMENS 13

2.8 SPECIAL HOSPITAL PROJECTS OF SIEMENS 14

2.9 SIEMENS BUSINESS AREA/UNITS

2

15 2.10 SIEMENS SAP TRAINING PROGRAMS

15

2.11 SIEMENS CUSTOMER’S PROFILE 15

2.12 OTHER CONTRIBUTIONS 16

2.12.1 FINANCIAL OVERVIEW 16

2.12.2 SIEMENS COMPLIANCE PROGRAM 18

2.12.3 EXECUTIVE MANEGEMENT COMMITTEE 18

2.12.4 ACTIVE INTERACTION OF TOP MGT 18

2.12.5 HUMAN RESOURCE 18

2.12.6 STANDARD AND QUALITY 18

2.12.7 LIST OF AWARDS 19

CHAPTER 3 KEY ISSUE: CONFLICT AND NEGOTIATION AT

SIEMENS 21-22

CHAPTER 4 OBSERVATION, CONCLUSION AND

RECOMMENDATION 23-24

APPENDIX A THE INTERVIEW

APPENDIX B RAW MATERIAL

APPENDIX C FINANCIAL STATEMENTS

REFERNCES

CHAPTER 1

3

ARTICLE SYNOPSIS

1.1 ARTICLE 1 “BASICS OF CONFLICT MANAGEMENT”

SYNOPSIS

A conflict occurs when two or more values or opinions are contradictory in nature. It

occurs when values and opinions are threatened or there is discomfort from fear of the

unknown. Conflict is needed where there is a need to address a main issue or problem

and there is a need to boost work to proper issues. A conflict becomes a problem when it

lowers the morale, slows down productivity, causes more conflicts and causes inapt

behaviors.

Typical managerial actions that can cause workplace conflicts are:-

Lack of communication

Insufficient amount of resources

Conflicts in values among managers and employees

Leadership problems

Managerial actions or strategies to resolve conflicts are:-

To review jobs regularly to make sure that there is no role or task conflict.

To build relationships with all subordinates, meet them once in a month and ask

about challenges.

To get regular status reports including accomplishments, current issues and needs

from management.

To conduct basic training about interpersonal communication and conflict

management.

To develop procedures for routine tasks.

To regularly hold management meetings.

There are different ways to deal with a conflict. But there is no best way to deal with a

conflict. It depends on the situation. The ways are to avoid the conflict, accommodate it,

compete, collaborate and compromise.

4

There is a way to manage a conflict within an individual. The best way is to identify it,

identifying its importance, identifying some courses of action for resolving it and then

taking a proper action.

There is a way to manage a conflict with another individual. This can be achieved by

being calm, listening to other person’s opinion, giving him/her time to think and to put an

open ended discussion. Also, it can be achieved by mediating a third party person if the

conflict becomes too serious.

1.2 ARTICLE 2 “CONFLICT DEFINED……” SYNOPSIS

It is defined as a “struggle to resist overcome; a contest of opposing forces battle, clash or

collision. It is there in our lives: in our homes, workplaces, shops and organizations. It

may play a positive as well as a negative role. It usually arises when there is a difference

in our personality, thinking, ideology, values, race, culture and religion.

Misunderstandings are also another reason for conflicts. The costs of a conflict may be

direct, productivity, continuity or emotional cost. Direct costs involve fees of lawyers.

Productivity costs are costs of lost time. Continuity cost is the eventual end of

relationships and emotional cost reflects the pain of focusing on. Conflicts can be

resolved by developing an attitude of resolution, negotiating, listening to other party,

seeking agreements, and making resolution a reality.

1.3 ARTICLE 3 “DEALING WITH CONFLICT” SYNOPSIS

Conflict occurs when individuals and groups are not getting their needs and wants and are

seeking their self interest. Conflict is foreseeable and resolvable. It occurs because we are

dealing with jobs, pride, self-concept and ego. A conflict begins where there is lack of

communication, seeking power, dissatisfaction, lack of openness and changed leadership.

A conflict is better indicated by body language, discrepancies, strong public statements,

disagreement in value system, open disagreement and lack of clear goals and objectives.

A conflict can be destructive as well as constructive in nature. It is destructive when it

increases differences, reduces cooperation and demoralizes morale. It is also destructive

when it distracts the attention from other important activities and leads to detrimental

behavior like fighting and name-calling.

5

A conflict is constructive when it results in identification of work problems and solutions

to these. It is also constructive when it causes valid communication, helps removing

stress and builds cooperation among individuals.

The different techniques for resolving conflict are:-

To meet conflicts

To set goals

To communicate effectively

To be honest about issues

To discuss differences openly

To communicate honestly

To develop a sound management system

Powerful strategies for resolving conflict are:-

To avoid arguing over individual position

To avoid win-lose statements

To keep a healthy attitude while resolving a conflict

To ignore the opinion that someone has to win in the end.

1.4 ARTICLE 4 “MANAGING CONFLICT” SYNOPSIS

Due to disagreements, conflicts happen. Conflicts occur at home or at work. The main

reason behind conflict where there is a difference between an individual’s values and

needs from those of others. A conflict needs to be resolved whenever it happens. A leader

is often required to manage a conflict. A conflict occurs among individuals, groups and

organizations. When it is constructive, it enhances team productivity and satisfaction.

Changing one’s behavior in a conflict is often helpful. Changing the way one acts often

the way others react. At work places, disagreements can lead to serious problems. If

handled tactlessly, or without a regard for other’s people’s feelings can lead to minor

discrepancies. There are certain ways to deal with a conflict.

These include avoidance, accommodation, compromise, competition and collaboration.

Avoidance is appropriate when conflicts small and less timely. It is most inappropriate

when the issue is very critical and a quick decision is needed. Accommodation is a fair

6

strategy to resolve a conflict. It is helpful when a group needs to review its common

purpose in the midst of conflict. It should not be used when an important issue needs to

be addressed quickly. A compromise is appropriate when all parties are willing to be

flexible. All parties need to give up something. It is ideal when both the groups are

willing to reduce some demands. It does not work when there is no way to compromise.

Competition technique works when there is a need to exercise power. It is governed by

the fact that a party has to win and the other has to lose. However, it reduces cooperation.

The last strategy is collaboration. It is best when individuals trust and respect each other

and there is a time for all parties to share their views and feelings. It should not be used

when there is less time and less trust or respect among the groups.

There are some creative ways for managing conflict. They are:-

To accept the fact that conflict is going to happen

To deal with one issue at a time

To select the right time for the conflict

To avoid reacting to provocative remarks

To agree to disagree

Not to insist on being right

Humor can help reduce conflicts. Laughing together can help individuals accept

differences. Humor can be public or private. Public humor is shared at the moment it

happens. Private humor occurs when something funny occurs but it is inappropriate to

laugh at that moment.

1.5 ARTICLE 5 “HOW TO NEGOTIATE EFFECTIVELY”

SYNOPSIS

7

An individual has to know himself when he or she enters into a negotiation. He or she

also has to know the reason for negotiation and with whom he or she is negotiating.

Therefore, he must know a little bit of what the other party thinks of him. He also has to

know about the intentions of the other party. Trust and communication are two important

aspects of negotiating effectively. So an individual has to build trust and maintain

respect. One has to listen carefully while negotiating with the other party, so that he or

she does not miss any facial expression or nonverbal message. One needs to develop a

supporting environment and move beyond positions. The negotiating parties must

exercise power balancing. Power may be external or internal. A negotiator needs to know

BATNA (Best Alternative to a Negotiable Agreement). That means one needs to know

his options well before negotiating. He or she also has to know what a win and a loss is.

Lastly, the negotiation process must be enjoyed by the individuals or parties.

1.6 ARTICLE 6 “NEGOTIATION SKILLS, MANAGING CONFLICT

AND HANDLING DIFFICULT PEOPLE” SYNOPSIS

The term negotiation is defined as “to confer with a view to agreement”. The difference

between conflict and negotiation is that level of tension is high in a conflict. Every

negotiation can lead to a conflict. Relationships are damaged in conflict and neither party

wins. A conflict can occur at different levels. The first step in conflict resolution is to

look for clues. If clues are identified well, the conflict can be resolved. The first clue is

distress and a feeling that something is going wrong. Another clue is a minor conflict

incident. Something minor happening that leaves an individual upset or irritated. If

similar incidents happen again, a major conflict can arise.

The next level of conflict is misunderstanding. It occurs due to lack of communication, or

bad rapport. Sometimes misunderstandings arise due to assumptions about a person’s

motives. Another clear clue for conflict is tension. A crisis can result from unresolved

tension. A crisis can lead to abusive behavior. A crisis can break relationships.

There are certain responses to resolve a conflict. When a party wins at another person’s

expense, this can break relationships. Similarly, losing can also leave a person feel

powerless or angry. Compromising is a better way to resolve a conflict. At times both the

8

parties feel that they have lost something. Withdrawal is another way to resolve a

conflict. When a person resolves, he or she no longer have a say in what happens. It can

also leave the other person angry or helpless. Suppression is another technique. It is

positive when it gives time to think about how a person will react to the matter. It is

destructive when an individual does not discuss the main issues. Win or Lose strategy is

the one where one person comes on the top. Compromise is the fairest strategy, where

every one gains something. This leaves everyone feeling at least a bit satisfied. A

win/win strategy believes to have loser and a winner.

1.7 ESSAY

A conflict occurs when two or more values or opinions are contradictory in nature. It

occurs when values and opinions are threatened or there is discomfort from fear of the

unknown. Conflict is needed where there is a need to address a main issue or problem

and there is a need to boost work to proper issues. A conflict becomes a problem when it

lowers the morale, slows down productivity, causes more conflicts and causes inapt

behaviors. Conflict occurs when individuals and groups are not getting their needs and

wants and are seeking their self interest. Conflict is foreseeable and resolvable. It occurs

because we are dealing with jobs, pride, self-concept and ego. A conflict begins where

there is lack of communication, seeking power, dissatisfaction, lack of openness and

changed leadership.

A conflict is better indicated by body language, discrepancies, strong public statements,

disagreement in value system, open disagreement and lack of clear goals and objectives.

A conflict can be destructive as well as constructive in nature. It is destructive when it

increases differences, reduces cooperation and demoralizes morale. It is also destructive

when it distracts the attention from other important activities and leads to detrimental

behavior like fighting and name-calling.

There are different ways to deal with a conflict. But there is no best way to deal with a

conflict. It depends on the situation. The ways are to avoid the conflict, accommodate it,

compete, collaborate and compromise. There is a way to manage a conflict with another

individual. This can be achieved by being calm, listening to other person’s opinion,

giving him/her time to think and to put an open ended discussion. Also, it can be

achieved by mediating a third party person if the conflict becomes too serious.

9

Due to disagreements, conflicts happen. Conflicts occur at home or at work. The main

reason behind conflict where there is a difference between an individual’s values and

needs from those of others. A conflict needs to be resolved whenever it happens. A leader

is often required to manage a conflict. A conflict occurs among individuals, groups and

organizations. When it is constructive, it enhances team productivity and satisfaction.

Changing one’s behavior in a conflict is often helpful. Changing the way one acts often

the way others react. At work places, disagreements can lead to serious problems. If

handled tactlessly, or without a regard for other’s people’s feelings can lead to minor

discrepancies. There are certain ways to deal with a conflict. These include avoidance,

accommodation, compromise, competition and collaboration. Avoidance is appropriate

when conflicts small and less timely. It is most inappropriate when the issue is very

critical and a quick decision is needed. Accommodation is a fair strategy to resolve a

conflict. It is helpful when a group needs to review its common purpose in the midst of

conflict. It should not be used when an important issue needs to be addressed quickly. A

compromise is appropriate when all parties are willing to be flexible. All parties need to

give up something. It is ideal when both the groups are willing to reduce some demands.

It does not work when there is no way to compromise. Competition technique works

when there is a need to exercise power. It is governed by the fact that a party has to win

and the other has to lose. However, it reduces cooperation. The last strategy is

collaboration. It is best when individuals trust and respect each other and there is a time

for all parties to share their views and feelings. It should not be used when there is less

time and less trust or respect among the groups.

The human relations view of conflict says that it is natural and inevitable outcome of any

group. The interactionist view of conflict says that it is not only a positive force in a

group but is necessary for a group to perform effectively. A conflict may be categorized

as:

a) Functional conflict – that supports goals of the group to increase performance

b) Dysfunctional conflict—that hinders group performance

c) Task conflict—over goals on content of work

e) Relationship conflict –that is based on interpersonal relationships

f) Process conflict –conflict over how work gets done

10

The term negotiation is defined as “to confer with a view to agreement”. The difference

between conflict and negotiation is that level of tension is high in a conflict. Every

negotiation can lead to a conflict. Relationships are damaged in conflict and neither party

wins. A conflict can occur at different levels. The first step in conflict resolution is to

look for clues. If clues are identified well, the conflict can be resolved. The first clue is

distress and a feeling that something is going wrong. Another clue is a minor conflict

incident. Something minor happening that leaves an individual upset or irritated. If

similar incidents happen again, a major conflict can arise.

Distributive bargaining is a negotiation that seeks to divide a fixed amount of resources.

Interactive bargaining is a negotiation that seeks one or more settlements that can crate a

win -win situation. BATNA is defined as a best alternative to a negotiated agreement. It

means the lowest acceptable value to an individual for a negotiated agreement.

Personality traits mean that a person can negotiate more effectively if some of the

attributes of the personality of the second party are known. This is not true. Men and

women do not negotiate differently but gender affect negotiation outcomes. Third parry

negotiations include a mediator, arbitrator, conciliator and a consultant. A negotiator

facilitates a solution by using reasoning, persuasion and suggestions. An arbitrator has an

n authority to dictate an agreement. A conciliator provides an informal link between

negotiator and second party. A consultant solves the problem through communication and

analysis.

CHAPTER 2

THE ORGANIZATION:

11

(SIEMENS ENGG. CO. LTD.)

2.1 SIEMENS’ VISION

“To remain market leader and technology pace setter in the engineering and electronics

industry, by utilizing the high-tech engineering expertise of the Siemens Group

worldwide. To maintain our strong and prominent local presence”.

2.2 SIEMENS’ MISSION

To realize vision by:

- Providing quality for customers at competitive prices, to their complete satisfaction.

- Generating earnings sufficient to ensure a secure future for the company and to protect

and increase shareholders’ investment.

- To enhance creativity and job satisfaction of employees by providing opportunities for

personal development, limited only by their own ability and drive.

- To contribute to the national economy, whilst realizing a strong sense of responsibility

to society and the environment.

- To enhance the investment of customers through Human Excellence, Technology, our

Processes, High Standards of Quality and Financial Strength.

- To support and strive for technology transfer to Pakistan through global resources and

local presence

2.3 HISTORY

For over 150 years, Siemens has been a technology powerhouse in the area electrical

engineering and electronics. The factors driving success at the history-making company

include innovative prowess, a clear portfolio policy, long-range financial planning, an

international setup and strong employee orientation. The history of Siemens goes like:

1847-1865 Beginnings and early development

1865-1890 Company policy and intrnational projects

1890-1918 Second generation

12

1918-1933 A period of transition

1933-1945 Socialist war

1945-1966 Postwar reconstruction and emergence

     as a global player

1966-1989 United under a single roof

1989-2003 Third Millenuim

2.4 CORPORATE INFORMATION

2.4.1 BOARD OF DIRECTORS

The boards of directors include:

Syed Babar Ali, Lahore Chairman

Sohail Wajahat H. Siddiqui, Karachi Managing Director

Tajammal Hussain Bokharee, Lahore Director

Andrew Hall, Munich Director

Tariq Iqbal Khan,Karachi Director

Joachim Moeller, Erlangen Director

Javaid Anwar, Karachi Director

Patrick de Royer, Munich Director

Gerhard Wilcke, Karachi Director

Mohammad Rafi Company Secretary

2.4.2 MANAGEMENT

The management team comprises:

Sohail Wajahat H. Siddiqui Chief Executive Officer

Gerhard Wilcke Chief Financial Officer

Parvez Iftikhar Communication

Mohammad Ilyas Power Transmission & Distribution

Nasim A. Siddiqui Industrial Solutions and Power Generation

S.Nadeem Ali Kazmi Automation & Drives

Sohail Wajahat H. Siddiqui Medical Solutions, Home Appliances

2.4.3 BANKERS

13

ABN Amro Bank

Citibank NA

Crescent Bank

Deutsche Bank AG

Habib Bank Limited

Hongkong & Shanghai Banking Corporation Limited

Meezan Bank Limited

Muslim Commercial Bank Limited

Standard Chartered Bank

Union Bank Limited

2.4.4 AUDITORS

KPMG Taseer Hadi & Co., Karachi

2.5 SIEMENS FINANCIAL STATUS

New orders of Rs. 19.6 billion have been received during the first nine months of the

current business year. Major contributions include project of GSM phase III for Telenor,

project for New Murree Bulk water supply scheme for Public Health Engineering,

contract for operations and management of KESC, various projects for supply and

installation of grid stations in Dubai, various projects for the supply of distribution

transformers and projects in Telecommunication sector mainly mobile phone networks.

14

Sales increased by 42% as compared to the corresponding nine months period to just

over Rs. 13 billion due to the projects being undertaken in energy and

telecommunication sectors.

Earnings after taxes increased by 17% and 14% respectively as compared to the

corresponding nine months period but decreased in terms of percentage of sales due to

some of the projects which are being executed at very low margins and in some cases at a

loss.

New foreign as well as domestic order position as at the end of the third quarter of the

business year depicts a healthy outlook.

2.6 PREVIOUS PROJECTS OF SIEMENS

YEARS PROJECTS

1953 Siemens Pakistan Engineering Company

founded

1955 Establishment of repair workshop.

1963 Established second factory for production

of Motors and Transformers

1969 Joint Venture with Government Carrier

Telephone Industries

1976 Diesel Generating sets are introduced

1978 Company converted into Public Limited

Company

1981 Start production of Power Transformers up

to 132Kv, 30 Mva

1983 Start local production of Single Phase

Motors and Fan Motors

1984 Local assembly of electrical control

cubicles

1985 Railway Signaling equipment

1986 Assembly/Manufacture of Medium Voltage

15

Vacuum Circuit Breakers starts

1988 Extension in manufacture of Mobile X-Ray

Unit up to 300 mA.

1991 Manufacture of Fiber Optic Transmission

System started at Carrier Telephone

Industries

1992 Successful installation of fiber optic

1993 Contract for supply, installation and

commissioning of Combined Cycle Power

1995 Siemens ISDN Network

in Karachi, Lahore and

Rawalpindi/Islamabad

1996 Rousch LTP (Long Term Program)

Maintenance Contract

1998 Siemens Pakistan appointed as the first SAP

Value Added Reseller for Pakistan.

1998 First CEO Sohail Wajahat Siddiqui

2000 Bagh-e-Quaid project & SAP introduced,

and home appliances

2.7 RECENT AND CURRENT PROJECTS OF SIEMENS

YEAR PROJECTS

2001 Performed complete electrification of MCB

Tower, the tallest building of Pakistan

2002 Siemens enters the Mobile Phone Market

2003 Kohat Tunnel Project completed ahead of

Schedule

2004 Siemens starts manufacturing of new line of

16

Low Voltage Switchgear System of family

SIVACON 8PT; Siemens and Telenor signs

agreement for deployment of Cellular

network of Telenor in Pakistan.

2005 Siemens and Telenor finalized phase 2 for

the expansion of Telenor cellular network in

Pakistan

2006 Siemens Pakistan’s 40 MVA Power

Transformer

2006 First Industrial Call Centre established in

Pakistan

2.8 SPECIAL HOSPITAL PROJECTS OF SIEMENS

Siemens is providing radiology and operation theatre appliances to these hospitals. Some

of the local clients of Siemens are:

Pakistan Institute of Medical Sciences

Shaukat  Khanum  Memorial  Trust  Cancer  Research  Hospital, Lahore 

Punjab Institute of Cardiology

ParkViewHospital, Lahore

SheikhZayedHospital, Rahimyar Khan

Lahore General Hospital, Lahore

Armed Forces Institute of Cardiology/NIHD Rawalpindi

KRLGeneralHospital, Islamabad

Hayatabad Medical Complex, Peshawar

Atomic Energy Commission centers all over the country

2.9 SIEMENS BUSINESS AREA/UNITS

Siemens is conducting business in the following units.

AUTOMATION & CONTROL COMMUNICATION TRANSPORTATION

17

Engineering & Construction Communication networks Automotive

Motors & Generating sets Communication services Transportation

Process Industries Information

technology

POWER MEDICAL ENERGY SERVICES

Power generation Hospitals Industrial services

Power Transmission &

distribution

Energy services

Training & Maintenance

2.10 SIEMENS LATEST_ SAP TRAINING PROGRAMS

SAP’s Authorized Training Center at Siemens Pakistan offers the SAP Academy

Programs. SAP is the leading provider of Enterprise Resource Management (ERP)

solutions in the world. These training and certification programs follow an international

curriculum to provide SAP partners, customers and individuals with the highest degree of

SAP knowledge.

2.11 SIEMENS’ CUSTOMERS PROFILE

        Oil & Gas

      Petrochemical

      Process Plants

      Airports

      Traffic Control Systems

       Terminals & Jetties

     Housing Complexes

      Commercial Buildings

2.12 OTHER CONTRIBUTIONS

2.12.1 FINANCIAL OVERVIEW

18

The company’s record performance during the year under review is yet another addition

to its success in all spheres of its activities that validates corporate and management

strategies of the company. Following are some of the highlights of company’s financial

performance:

The company has just received new orders of Rs. 18 million from different clients. These

include high voltage grid stations and some orders in the telecom sectors. In the area of

industrial solutions and power generation, they have received orders for building power

and desalination plant at DHA site and for electrification work at Punjab industrial state.

The increase in sales is a result of orders from telecom companies like Ufone, mobilink

and Telenor. Profit before tax increased by 62% compared with last year showing an all

time high value of Rs. 1.2 billion. The major contributors are higher sales volume and

higher commission income. The snapshot on the next page shows a 6 year summary.

19

2.12.2 SIEMENS COMPLIANCE PROGRAM

Siemens has a compliance system that covers all measures required for the effective

prevention and detection of violations against business conduct guidelines of Siemens.

2.12.3 EXECUTIVE MANAGEMENT COMMITTEE

Executive Management Committee comprising the Chief Executive Officer, the Chief

Financial Officer and the Executive Directors of the operating divisions remained active

during the year. The committee meets at least every quarter to review the result of

operations, to formulate strategic plans of marketing, production, investments, to finalize

annual and seasonal budgets and to take corrective and preventive measures for

mitigation of risks and for getting business opportunities. The committee places before

the Board of Directors all such matters which are required to be approved by it under the

law as well as other matters of importance.

2.12.4 ACTIVE INTERACTION OF TOP MANAGEMENT

The management believes in active interaction with different levels of management and

different categories of employees, in order to involve them in the achievement of its

overall goal and to get their valuable comments and recommendations for improvement

20

in various areas of the organization. MD also has a yearly open session with all the

engineers who have worked with Siemens for at least two years. There is also an open

session with trainees of the company.

2.12.5 HUMAN RESOURCE

The HRM at Siemens is effective. The employees are highly paid and provided all sorts

of benefits. Training to employees is provided and foreign assignments are also included

in the employees’ job.

2.12.6 STANDARD AND QUALITY

Siemens believes in FIT4MORE. They have quality managers to ensure that good quality

products are being developed. It is also making use of personnel quality using best

trained and motivated employees. Siemens develops its products under ISO certification.

Business processes improvement activities are constantly undertaken by top+ program.

Siemens has a well established apprentice training center where young men are exposed

to latest technology and trained for the industry.

The three year course imparts knowledge in electrical and mechanical trades during

which period the apprentices get payments paid by the company. The trained apprentices

are much sought after not only by the local engineering industry but also by this sector in

the region. Siemens has a policy of helping institutions which work for collective benefit

to the society. During the year under review Siemens helped many organizations with

their fund raising efforts. It has participated in a fund raising event for Aga Khan

Hospital, Medical College Foundation and also contributed towards sponsorship of health

sciences education symposium by Aga Khan University Foundation. Other sponsorships

included conference on safe blood, gold medal for student of Central Institute of Arts and

Craft, Indus Valley School fund raising efforts, Rotary Club of Karachi for their Charity

Gala, Organization for the under privileged, Zindagi Trust, Oncology Department CMH

etc. In the field of sports a 200 KVA pad mounted transformer was donated for the

floodlit system at WAPDA sports complex Lahore.

2.12.7 LIST OF AWARDS

1) Siemens again qualified for the top 25 companies Award of the Karachi Stock

Exchange.

21

2) Siemens received Export Trophy Awards from both FPCCI and KCCI in export of

electrical goods

3) Siemens Pakistan was given the “Strategic Leadership Award” instituted jointly by

Allama Iqbal Open University Islamabad

4) Siemens Pakistan received the second award in the Engineering sector for its Annual

Report.

5) CQ (Corporate Quality) at Siemens Pakistan was selected as Best Practice Example of

the communication

6) Siemens Pakistan was awarded the Environment Excellence Award 2005 by the

National Forum for Environment and Health.

7) Siemens Pakistan was awarded a certificate recognizing its Corporate Excellence at the

22nd Excellence Award Ceremony of Management Association of Pakistan

8) Siemens Pakistan Project “T –Mangoes “selected from amongst 15 projects submitted

at Siemens advanced Management

9) The “Outstanding Value Added Reseller (VAR) Award 2004” was awarded to

Siemens Pakistan by SAP Malaysia.

10) The EN Award instituted by Siemens AG was awarded to Siemens Pakistan in the

category “Sales Performance Award-Direct Channel”

22

CHAPTER 3

KEY ISSUE: CONFLICT AND NEGOTIATION AT SIEMENS

Teams at Siemens usually comprise 250+ members. They have project managers. Project

directors lie above project managers in hierarchy. They have area managers and above

area managers lay regional managers. The regional manager has a responsibility of

controlling the whole region. In case if conflict arises, it is reported directly to the project

director. The individual or a group of individuals are asked to put the reasons for

conflicts. The project director tries to resolve these on his own. Even if the individual is

not satisfied, he is then asked to quit the organization. Usually work days are lost due to

conflicts, but they are offset by good technology and resources at Siemens. The conflicts

at Siemens play a destructive role. But it is strange to know that it has never played a

constructive role. If an individual is creating too much problem, he is shifted to the other

department. In this case, a compromise strategy is working where the one party

(Siemens) and the other party (individual) both have to lose something. Gender based

23

conflicts usually do not arise at Siemens. Though women are given some privilege, but

no one creates a conflict. However, departmental conflicts arise at Siemens. The main

reason behind departmental conflicts is Employee Benefits. If employees of one

department are getting some extra benefits, then a conflict arises. These departmental

conflicts are resolved by Mr. Knud and Mr. Adnan Ahmed (Project Director). The second

type of conflicts arises on payments to different contractors. Siemens needs in advance

payment from its contractors in order to proceed for projects. If payments are not made

on time, then the organization can not start working on the projects.

The types of conflicts that arise at Siemens include functional conflicts, task conflicts,

relationship conflicts and process conflicts. Relationship conflicts are the most common

of all. Relationship conflicts usually arise between employees and boss. It also arises at

Siemens between peers. However, there is no concept of dysfunctional conflicts at

Siemens.

The negotiation is the task of Sales department. Since they have to deal with the clients,

negotiations comes from their side. Clients interact through sales person.

However in case of Employee-boss conflict, the employee is transferred to some other

department. This is not some sort of punishment. Rotation is a simple norm at Siemens.

An employee could be transferred any where, any time. It has recently closed down a

project with Ufone because of lack of skilled people.

Cultural conflicts arise at Siemens due to a multinational culture. Foreigners also work at

Siemens. They think according to their country. But both the parties, (Siemens and

foreign employees) cooperate to resolve cultural conflicts. Some role is played by the

organization and some by foreign employees.

There is no concept of a third party negotiator or a mediator at Siemens. Third party is

auditors. Conflicts are resolved on internal basis. Siemens has consultants and auditors,

but for product and project quality. The main competitor of Siemens was Nokia, with

which Siemens has merged in order to get a market share, share resources and assets.

Siemens is 100-index Company listed on Karachi Stock Exchange. Siemens Dubai is

usually dealing with Asian countries.

24

CHAPTER 4

OBSERVATION, CONCLUSION AND RECOMMENDATION

Siemens is a huge company with many employees and a wide range of customers. Our

conclusion is that whenever interpersonal conflicts arise, the individuals are given a

chance to either improve. If not they are transferred to some other department.

Functional, task and relationship conflicts are common at Siemens. Three strategies were

found. Collaboration, accommodating and compromising strategies are found at Siemens.

Different implications for top level people are to use these strategies effectively and

depending upon the situation. Collaboration should be used by the project director where

both the parties’ issues are too important. Accommodation technique should be used

where the one party’s issues are more important than the other party’s issues. A

compromise technique should be used where there is time pressure or constraint.

However, avoidance and competition technique are not to be used at Siemens.

25

Siemens should go for a third party negotiator for resolving conflicts. The conflicts are

resolved on internal basis. The main drawback of resolving a conflict is that biasness

comes in the solutions. If the negotiators are third party persons, there is going to be less

biasness and a more efficient solution to work or task conflicts.

Siemens is a multinational which started its operations in 1953 in Pakistan. It is

conducting its business in vast units like power and transmission, hospitals equipment,

information and telecom sector as well. Siemens is an incorporated KSE 100 index

company, whose shares are traded on all the stock exchanges of Pakistan. These include

Karachi stock exchange, Islamabad Stock exchange and Lahore Stock exchange. It was

awarded the best KSE Company in 2005. It has worked on tremendous industrial and

telecom projects. Recently it has formed a joint venture with Telenor to enhance the

working of telecom sector. Nokia was amongst one of the competitors of Siemens, but it

has merged with Nokia for capturing a bigger market share and utilizing more resources.

The hiring practices are fair at Siemens and it is an Equal Employment Opportunity

workplace. Hiring is done through a reference so that the company does not get a wrong

person in. Mr. Syed Babar Ali is the chairperson and Mr. Sohail Wajahat Siddiqui is

Managing Director of Siemens. The board of directors comprise foreigners as well which

shows that Siemens has a multinational culture. The financial performance of different

projects of Siemens is hard to depict, since the financial statements provide an over all

view of Siemens. The financial data does not provide the progress on the individual

projects that Siemens is working on. It just gives a snapshot of the overall performance of

Siemens. The upper management plays an important role in the progress of Siemens. The

MD holds regular meeting with the employees to keep him updated.

In order to get the inner organizational knowledge, we conducted an interview from Mr.

Naeem ul Haq on Thursday, 7th Dec, 2006. Usually, the top person responsible for the

project or the project director is informed about the conflicts. He is therefore, responsible

for resolving all the types of conflicts at Siemens.

26

27

28

REFERENCES

Stephen P. Robbins, “Organizational Behavior”, 11th Edition, Prentice Hall of India, 2005 www.siemens.com.pkwww.google.com.pkwww.askjeeves.comwww.yahoo.com

29