Siemens 2010 Annual Report Download - page 116

6 To our shareholders 21 Corporate Governance 49 Combined management’s discussion and analysis
50 Business and operating environment
78 Fiscal  – Financial summary
81 Results of operations
98 Financial position
110 Net assets position
113 Overall assessment of the economic position
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Business and operating environment
THE SIEMENS GROUP – ORGANIZATION
AND BASIS OF PRESENTATION
We are a globally operating, integrated technology company
with core activities in the fields of industry, energy and health-
care, and we occupy leading market positions worldwide in the
majority of our businesses. We can look back on a successful
history spanning more than  years, with groundbreaking
and revolutionary innovations such as the invention of the
dynamo, the first commercial light bulb, the first electric
streetcar, the construction of the first public power plant, and
the first images of the inside of the human body. We have
more than , employees and business activities in
around  countries, and reported consolidated revenue of
€. billion in fiscal . Our production capacity is distrib-
uted across more than  production and manufacturing
plants worldwide. In addition, we have office buildings, ware-
houses, research and development facilities or sales offices in
almost every country in the world.
Siemens comprises Siemens AG, a stock corporation under the
Federal laws of Germany, as the parent company and a total of
about , legal entities, including minority investments. Our
Company, is incorporated in Germany, with our corporate
headquarters situated in Munich. Siemens operates under the
leadership of its Managing Board, which comprises the Chief
Executive Officer (CEO) and Chief Financial Officer (CFO) of
Siemens as well as the heads of selected corporate functions
and the CEOs of the three Sectors.
Our fundamental organizational principles are:
> the CEO principle,
> end-to-end business responsibility of the Sectors, Divisions
and Business Units and
> the unrestricted right of selected corporate functions to
issue instructions in relation to a function as far as legally
possible.
The Siemens Managing Board is the sole management body
and has overall business responsibility in accordance with the
German Stock Corporation Act (Aktiengesetz, AktG). At all
other organizational levels within our Company, management
responsibility is assigned to individuals who make decisions
and assume personal responsibility (CEO principle). This prin-
ciple establishes clear and direct responsibilities and fosters
efficient decision-making.
Our Sectors, Divisions, Business Units and Cross-Sector Busi-
nesses are “global entrepreneurs“ and have end-to-end busi-
ness responsibility worldwide, including with regard to their
operating results. They therefore have “right of way” over the
Clusters and Countries in business matters. The regional units
(Clusters and Countries) are responsible for the local Customer
Relationship Management and for implementing the business
strategies of the Sectors and Cross-Sector Businesses as well as
the requirements set by the corporate functions.
In addition to their particular authority to issue binding com-
pany-wide guidelines and to their monitoring and coordinating
responsibilities, the heads of selected corporate functions
(Finance and Controlling, Legal and Compliance, Human Re-
sources and Supply Chain Management, for example) have an
unrestricted right to issue instructions in relation to a function
across all parts of the company as far as legally possible.
Below the Managing Board, Siemens is structured organiza-
tionally into three Sectors, two Cross-Sector Businesses that
act as business partners for the Sectors and also conduct their
own business with external customers, Cross-Sector Services
that support other Siemens units, Corporate Units with spe-
cific corporate functions, and Regional Clusters. The Sectors
are broken down into Divisions and these in turn into Business
Units.
Our business activities focus on our three Sectors, Industry,
Energy and Healthcare, which form three of our reportable
segments. In addition to our three Sectors, we have three ad-
ditional reportable segments: Equity Investments and our two
Cross-Sector Businesses Siemens IT Solutions and Services and
Siemens Financial Services (SFS).
During fiscal , Siemens initiated a change in the organiza-
tional structure of its Healthcare Sector which became effec-
tive October ,  as described below. Financial reporting for
fiscal  continued to be based on the organizational struc-
ture effective until September , . The Diagnostics Divi-
sion was not affected by the reorganization.
Our Industry Sector offers a complete spectrum of products,
services and solutions for the efficient use of resources and
energy, and improvements of productivity in industry and in-
frastructure. Its integrated technologies and holistic solutions
address primarily industrial customers, such as process and
manufacturing industries, and infrastructure customers, espe-
cially in the areas of transport, buildings and utilities. The
Combined management’s discussion and analysis