ABB case study
1. General presentation of the case study (Structured summary)
ABB (ASEA BROWN BOVERI) group is a high-tech engineering MNC headquartered in Zurich, Switzerland. The group was formed in 1988, when Asea AB of Västerås, Sweden and BBC Brown Boveri Limited of Baden, Switzerland merged their operations, with each company holding 50 percent of the new entity. Nevertheless, the merger was highly rated by the media because of Europe’s 1992 economic integration. ABB group has a history of over 115 years, dating back to the late 1800s. On the one hand, Ludvig Fredholm founded, in 1883, Elektriska Aktiebolaget in Stockholm which merged with Wenstroms and Granstroms Elektriska Kraftbolag to form ASEA. On the other hand, Charles Brown and Walter Boveri founded BBC in Baden,Switzerland. Throughout the years, both companies became famous for their transmission lines, transformers, power plants and locomotives, having expanded their operations across Europe. Under the tenure of Percy Barnevik, between 1993 and 2001, the company engaged in an aggressive global expansion program due to increasing demand. ABB continued to expand in Europe, Asia and Latin America by seeking acquisitions, alliances and joint ventures that helped the company to consolidate its position in the global markets. The company was famous for its unique matrix structure at the global level. These proved to be good choices for ABB as it became the global leader in the areas of power and automation technologies in 2004. However, Barnevik’s business actions or lack of reaction to the global changes led to huge financial losses and important corporate organizational problems because of neglecting macroeconomic issues such as the East Asian crisis, weaker demand from other parts of the world, the increasing competition in the industry and emphasizing too much on designing and implanting the matrix management structure. In this regard, a new corporate strategy was needed for ABB’s global
ABB (ASEA BROWN BOVERI) group is a high-tech engineering MNC headquartered in Zurich, Switzerland. The group was formed in 1988, when Asea AB of Västerås, Sweden and BBC Brown Boveri Limited of Baden, Switzerland merged their operations, with each company holding 50 percent of the new entity. Nevertheless, the merger was highly rated by the media because of Europe’s 1992 economic integration. ABB group has a history of over 115 years, dating back to the late 1800s. On the one hand, Ludvig Fredholm founded, in 1883, Elektriska Aktiebolaget in Stockholm which merged with Wenstroms and Granstroms Elektriska Kraftbolag to form ASEA. On the other hand, Charles Brown and Walter Boveri founded BBC in Baden,Switzerland. Throughout the years, both companies became famous for their transmission lines, transformers, power plants and locomotives, having expanded their operations across Europe. Under the tenure of Percy Barnevik, between 1993 and 2001, the company engaged in an aggressive global expansion program due to increasing demand. ABB continued to expand in Europe, Asia and Latin America by seeking acquisitions, alliances and joint ventures that helped the company to consolidate its position in the global markets. The company was famous for its unique matrix structure at the global level. These proved to be good choices for ABB as it became the global leader in the areas of power and automation technologies in 2004. However, Barnevik’s business actions or lack of reaction to the global changes led to huge financial losses and important corporate organizational problems because of neglecting macroeconomic issues such as the East Asian crisis, weaker demand from other parts of the world, the increasing competition in the industry and emphasizing too much on designing and implanting the matrix management structure. In this regard, a new corporate strategy was needed for ABB’s global