ABB Case Study Formed by the 1988 merger between ASEA of Sweden and Brown Boveri of Switzerland, ABB

grew rapidly through acquisitions of several well-known companies, some not related to industrial automation. In the year 2001, the CEO Mr. Barnevik introduced matrix

structure to integrate worldwide activities of ABB. Decentralization with central control was ABBs matrix structure. Consequently, it was successful in improved proximity with the customers. And also making faster and effective decision process. Q1. After reading the case, do you think matrix organization structure can always bring success? The matrix structure followed by ABB groups the employees across the business segments and the business regions. Such a structure mainly focuses on decentralization with central control. This structure was a success in the case of ABB due to the following reasons: 1. ABB electrical equipment private limited is a very diversified business. It operates in 28 regions. It is in 8 lines of business. It operated in a decentralized way. For such a firm matrix organizational structure is best. 2. The ABB groups executive management devised global strategies which were checked by periodic reviews. This was done with the objective to see that individual business/unit where in line with the super ordinate goals of the group. 3. There was a efficient flow of information between the regional and functional manager. This enabled efficient monitoring of the individual companies. Besides the above factors an aggressive integration of the regional and functional units would ensure a success of the matrix structure. Q2. Identify some companies, which have failed subsequent to introduction of matrix structure. List the reasons for failure and suggest what could be the appropriate structure for them? Shell Enterprise followed the matrix organization structure. There existed a lack of coordination between the various regional and functional groups in Europe, which led to inefficient selling in Spain. This lack of integration existed because of the Scandinavian divide. A mixed or hybrid structure could be a better option. The subsidiary companies may operate independently and the service driven industries could be centrally managed.

Abhisek Mohanty Roll no: 3 Sec A