Reorganizing ABBFrom Matrix to Customercentric Organization
Reorganizing ABB
From Matrix to Customer-centric Organization Structure
©BMAN72631 Cohort 1 Group 3
Xu Anyue; Zhao Shuyi; Zhou Tianxiang; Li Mengdie; Qu Yang
Contents
Background Introduction
Discussion Questions
1. What were the stages of transformation of ABB’s organisational structure?
2.What triggered the changes and to what extent were these organisational structures appropriate for the purpose?
3.How did these changes affect the autonomy of subsidiaries?
4.In what ways did the changes affect the ways the head office controlled the subsidiaries? 5.What are the major problems in managing such a complex and differentiated multinational company and how would you restructure the company to deal with these?
Sources
Questions and Comments
1. What were the stages of transformation of ABB’s organisational structure?
Sweden-based engineering group
Asea AB
Switzerland-based
1988.01.05
Asea Brown Boveri Ltd
Brown Boveri Limited
Financial Performance of ABB
40000
35000
30000
25000
$ Million
20000
Revenue($ Million ）
Net Income($ Million)
15000
10000
5000
0
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
-5000
Source: ABB Annual Report
1. What were the stages of transformation of ABB’s organisational structure?
TIMELINE CEO
1988
Percy Barnevik
top level: Group Executive Management (GEM)
Executive Vice President
Matrix Structure
1997
Goran Lindahl
middle level
Business Area Managers
(BAMs)
Country Managers
lower level:
Front Line Operating Companies
(FLOCs)
2001
Jorgen Centermann
(Company Heads)
(Company Heads)
……
2002
Jurgen Dormann
……
lowest level: profit centers managers
Executive Vice President
Source: Beyond the M-Form: Toward a Managerial Theory of the firm
Matrix Structure
GEM
Group Executive Management
5 Geographic Groups
BR1 BR2
BR3
……
BR28
28 Business Regions
BA1 BA2 BA3
8 Business Segments
BA4
50 Business Areas
BA5
BA6
……
BA50
1300
FLOCs
Front Line Operating
Companies
3500 Profit Centers
From Matrix to Customer-centric Organization Structure
©BMAN72631 Cohort 1 Group 3
Xu Anyue; Zhao Shuyi; Zhou Tianxiang; Li Mengdie; Qu Yang
Contents
Background Introduction
Discussion Questions
1. What were the stages of transformation of ABB’s organisational structure?
2.What triggered the changes and to what extent were these organisational structures appropriate for the purpose?
3.How did these changes affect the autonomy of subsidiaries?
4.In what ways did the changes affect the ways the head office controlled the subsidiaries? 5.What are the major problems in managing such a complex and differentiated multinational company and how would you restructure the company to deal with these?
Sources
Questions and Comments
1. What were the stages of transformation of ABB’s organisational structure?
Sweden-based engineering group
Asea AB
Switzerland-based
1988.01.05
Asea Brown Boveri Ltd
Brown Boveri Limited
Financial Performance of ABB
40000
35000
30000
25000
$ Million
20000
Revenue($ Million ）
Net Income($ Million)
15000
10000
5000
0
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
-5000
Source: ABB Annual Report
1. What were the stages of transformation of ABB’s organisational structure?
TIMELINE CEO
1988
Percy Barnevik
top level: Group Executive Management (GEM)
Executive Vice President
Matrix Structure
1997
Goran Lindahl
middle level
Business Area Managers
(BAMs)
Country Managers
lower level:
Front Line Operating Companies
(FLOCs)
2001
Jorgen Centermann
(Company Heads)
(Company Heads)
……
2002
Jurgen Dormann
……
lowest level: profit centers managers
Executive Vice President
Source: Beyond the M-Form: Toward a Managerial Theory of the firm
Matrix Structure
GEM
Group Executive Management
5 Geographic Groups
BR1 BR2
BR3
……
BR28
28 Business Regions
BA1 BA2 BA3
8 Business Segments
BA4
50 Business Areas
BA5
BA6
……
BA50
1300
FLOCs
Front Line Operating
Companies
3500 Profit Centers