Abb Study Case Study: ABB

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1. General presentation of the ABB study case
ABB is a multinational corporation headquartered in Zurich, Switzerland, operating mainly in robotics and the power and automation technology areas. ABB is one of the largest engineering companies as well as one of the largest conglomerates in the world. ABB has operations in around 100 countries, with approximately 150,000 employees in November 2013.
ABB is one of the few large companies that have successfully implemented the matrix structure in their organization, by merging Swedish ASEA and Swiss Brown Boveri into one joint entity, reducing the head office role, implementing a global management development policy, and developing a highly effective international organization. When ASEA and
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2.3 Causes that led to the appearance of these problems
a. External Factors: The basis of both ASEA’s restructuring over the early 1980s and BBC’s willingness to merge with its former arch-rival was a company crisis, leading to slowing growth and performance rates, exposing problems at the business segment and country level.
b. Internal Factors: In addition to these external factors, there were a number of internal drivers for change at ABB, often resulting from the inherent weaknesses of the ABB matrix. Misunderstanding the matrix: Despite a range of instruments to enhance internal transparency, and despite the numerous efforts to explain the ABB structure, many employees (as well as numerous external partners) still felt that they did not understand the matrix. Moreover, the internal negotiations between the small profit centres were occasionally difficult and frequently resulted in micro-politics.

3. Alternative solutions: advantages and disadvantages
1) The matrix
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The business segments have become the dominant dimension within the company and by focusing on segments instead of regions, the new matrix aimed to strengthen ABB’s product orientation. The first change is that ABB now has seven business segments as the dominant structure. This product- oriented organization aims at promoting growth in areas where ABB has technology advantages and unique capabilities, and to cut internal competition. The newly added financial services business segment is to help ABB provide complete solutions, including financing packages, to newly privatized customers and those in emerging markets. The second change is the removal of the regional layer. As a result, country organizations now report directly to Zurich. ABB expected to achieve shorter decision-making processes and greater responsiveness to deregulation and

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