Abb: the Company That Grew Too Big, Too Fast and the Organizational Structure and Strategy Changes to Address the Issues

2385 Words Oct 16th, 2012 10 Pages
ABB: The Company that Grew Too Big, Too Fast and the Organizational Structure and Strategy Changes to Address the Issues

International Management- MGMT 6377

Spring 2012

University of Houston- Victoria

Table of Contents

|Table of Contents |2 |
|Abstract |3 |
|Introduction |4 |
|Barnevik’s Vision for Globalization
…show more content…
Barnevik’s Vision for Globalization

Barnevik’s business philosophy was reflected in his approach to the formation of ABB. He believed in making speedy decisions and avoiding political obstacles. From its inception, ABB was built on instinctive moves by merging the two companies hastily and without informing the public of the merger. In an interview, Barnevik stated that in order for the merger to occur there was “no choice but to do it secretly and to do it quickly, with our eyes open about discovering skeletons in the closet. There were no lawyers, no auditors, no environmental investigations, and no due diligence” (Taylor 1991). Barnevik was a very persuasive and charismatic leader for ABB. He was an excellent communicator and used his influential skills to get people to buy into his vision for globalization and the strategies that he believed would be key to ABB’s success. His concept of a ‘multidomestic’ operation was a giant federation of several national companies all under the umbrella of ABB that leveraged core competencies and global economies of scale. Each company was to a distinct local culture and local customer focus, but still abide by his 21 page corporate policy bible which included his strict rules guidelines for ABB conformity, such as all communications being in English and all financial reporting in US dollars. In order to grow the organization at the speed and level Barnevik desired, ABB made numerous acquisitions in a short period of

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