Case 9 ABB

1. Identify these ideals and discuss the factors; which caused key areas to go awry and affect the performance of the business. * Development of a group wide umbrella culture: ABB had to established a common set of values, policies, and operational guidelines to promote culture. Corporate culture had to respect each national culture. * Development of core technologies and core competencies. Lower operating costs and wider profits margins in the long run faster than competitors. * Development and use of multinational teams. It is the solution to cut across cultural differences and become more efficient. * Development of effective global managers. He understands that to become an effective manager, it takes patience, cultural understanding and the ability to communicate. * Building a multi-domestic/federal organization. * Development of effective communication, understanding and patience. (2 ways communication, face to face as well as technology) * Development of a customer focus program. Improve company’s value system and direct employees towards the customers. 2. Identify and discuss the key strategic initiatives implemented by the various CEOs appointed after Barnevik’s tenure to take the company out of the crumbling mess within which it found itself in 2001. In your opinion which CEO performed the better and why? * Jurgen Centerman - believes the way to reduce costs and fix balance sheet would be through restructuring. (7 divisions). Left ABB $4 billion in debt and near bankruptcy. Failed and had to layoff 12,000 workers. * Jurgen Dormann – focused on 2 main strengths of ABB: power and automation technologies. Introduced the step change program. ABB had $18.795 billion in revenue with a net loss of $767 million. He focused on long term changes * Fred Kindle – Concentrating on improving operation excellence and margins via organic growth. * Joseph Hogan – increased revenue of ABB to $34.9 billion * Jurgen Dormann is the best because he focused on power and automation technologies. This lead to massive increases in revenue. He saved a valuable business venture. He lay out the foundation for ABB. 3. CEO Percy laid great store in the use of a matrix structure. Discuss the pros and cons of matrix structure and compare and contrast with those of so-called product/market structures and divisional structures. * Matrix structure: hybrid organization of overlapping responsibilities, two different lines of authority, no one person has sole decision making power. * Pros: align close to customers’ needs, improve communication with customers, improve customer responsiveness, decrease operating cycles. * Cons: