Abb Case Analysis

914 words 4 pages
Power and Productivity for a Better World

ABB (Asea Brown Boveri) was formed in 1988 by the merger of two companies: the Swedish company ASEA and the Brown Boveri of Switzerland to create a global electrical engineering giant. Percy Barnevik (of ASEA) was the chief executive and master mind of the restructuring process that integrated both the companies.

* In your opinion, was the organization structure chosen for Asea Brown Boveri by Barnevick appropriate?
The Organisation structure chosen for Asea Brown Boveri is the Matrix form of organisation structure. This form of organisation structure creates dual lines of authority and combines functional and product departmentalization.

Advantages provided by this model:
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ABB is restructuring in an effort to settle such issues. * What are the key requirements for the success of an organizations structure?
The key requirements for the success of an organization structure are as follows: * Communication:
The organization structure should be designed to ensure that individuals and departments that need to coordinate their efforts have lines of communication that are built into the structure. E.g. ABB used the Abacus software for the financial analysis and accurate data reporting between the Company management, Regional management and Company management at the Business area level.

* Reporting Relationships:
Reporting relationships must be clear so all members of the organization understand what their responsibilities are and know to whom they are accountable. These clear relationships make it easier for managers to supervise those in lower organization levels. Each employee benefits by knowing whom they can turn to for direction or help. In addition, managers are aware of who is outside the scope of their authority, so they do not overstep their bounds and interfere with another manager’s responsibilities.

* Right People in the Right Positions:
Once the organization structure is in place, then the right people need to take responsibilities of the respective posts. Every person needs to play his role well to ensure smooth running of the


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