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Is ABB’s worldwide reputation justified?
Introduction
ABB Ltd. ... ABB provides products and systems for industrial, commercial customers, and financial services using the most advanced technologies and applications. The ABB Group was formed in 1987 through the merger of the Swedish company Asea with the Swiss company Brown Bovery. ... Back in 1996, the National Electrical Manufacturers Association (NEMA) recognized Barnevik as an “innovative inspirational leadership in the electro industry and his role as a chief architect of a global company that recognizes no national borders and vigilantly protects the spirit of entrepreneurship” (ABB, 1996).
Through his new management style and through delegating responsibilities to its managers, ABB became a predominant player in the Industrial electrical equipment industry competing with companies such us: Emerson Electric, GE, ITT Industries and Nidec Co. ...
Transnational Framework
In order to determine ABB’s overall position in the multinational arena we must address the main characteristics that describe this organization. ... When Percy Barnevik stepped up as the ABB’s CEO, his main purpose was to create an organization that could obtain at the same time the greatest level of forces of integration and also the highest level of national responsiveness.
Barnevik’s new management style predominated in this early stage and was fundamental to develop ABB, in a four-year period, into a “$29 billion company with over 200. ... ABB clearly represents the optimal distinctiveness of a transnational company. ... In that sense the company is flexible, ABB is able to adapt to the local market where it operates.
Global Localization
One of Barnevik’s requirements was to make sure that ABB was able “to manage three contradictions – to be global and local, big and small, radically decentralized with central control” (Bartlett et al. ... Even though ABB was a global company, each time ABB penetrated a different market, the local company managers would be responsible of the overall management of each center.
The fact that ABB’s top management level was given such levels of responsibility to the local managers and the fact that ABB’s top management team was delegating responsibilities to levels which were unthinkable at that time, allowed ABB not only to become an insider but also helped the organization to become a global player with a local touch. ...
The ABB Management Chart shows that BA management was responsible for setting worldwide strategy and overall operating objectives, while local company managers controlled operations and were responsible for profits. ...
At ABB, there were overlaps in the primary value chain activities. ... As a transnational company, ABB applied both competitive advantages: Low cost in upstream primary activities and differentiation of downstream primary activities.
Other ways of looking at EPG
ABB’s core business has developed from the date the two following companies: Asea and Brown Boveri, which formed an alliance back in 1987. ABB becomes a predominant and leading player in the power equipment industry, competing directly with General Electric. Percy Barnevik, Asea’s CEO, became the new CEO of ABB. ... The key to the success of ABB’s management philosophy was delegating responsibilities among the different centers and to give them the authority to manage them independently. ... ABB was under a major corporate restructure. ... This allowed ABB to focus more on their local consumers and to respond appropriately to the demands of their customers. ... In 1987 ABB merged with Asea (Sweden) and Brown Boveri (Switzerland). Through continued acquisition and rejuvenated internal growth, ABB grew to a $29 billion company with over 200. ... In 1989, after 15 acquisitions in 1988, ABB acquired Westinghouse.
The Business Area management was responsible for setting worldwide strategies and overall operating objectives, while local company managers controlled operations and were responsible for profits, which was organized according to ABB’s decentralization philosophy. ...
In 1991, ABB heavily expanded into the Eastern Europe Market followed by further expansion in 1993-1999 into the Asia and USA market.
The Organizational Structure
ABB chose a Matrix structure in order to balance the global business focus of the organization. ... In each major country or region, these companies are administered through a national holding company, which is responsible for ensuring effective performance of ABB’s total market presence.
Approximate Word count = 3341
Approximate Pages = 13.4
(250 words per page double spaced)
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