UTC Case
Case Study Technologies had an “ACE in its Pocket” United Technologies Corporation (UTC), based in Hartford, Connecticut, is a conglomerate, a company that owns a wide variety of other companies that operate in different businesses and industries. Some of the companies in the UTC portfolio are more well known than UTC itself, such as Sikorsky Aircraft Corporation: Pratt & Whitney, the aircraft engine and component maker; Otis Elevator Company; Carrier air conditioning; and Chubb, the security and lock maker that UTC acquired in 2003. George David joined Otis Elevator as an assistant to its CEO in 1975, but within one year Otis was acquired by UTC. The UTC sent David to manage in the South America operation and later gave him responsibility on the Japanese operation. Otis formed an alliance wit Matsushita to develop an elevator for the Japanese market. This alliance did not work well when the elevator broke down more often than other elevators made by other Japanese companies, and customers were concerned about its reliability and safety. Once the elevator was resigned they launched worldwide and had great success. In 1992 David was named president of UTC. He was given responsibility to cut cost across the entire corporation. David decided the best way to increase profitability was to improve efficiency and quality in all its companies. Ito began to develop UTC’s TQM system, which is known as Achieving Competitive Excellence, or ACE. ACE is a set of tasks and producers that are used by employees from the shop floor to top managers to analyze all aspects of the way a product is made. In 1994 profit grew by 25% to 1.4 billion, while sales increased 26% to 18.3 billion. Discussion Questions One benefit UTC realized by pursuing an unrelated diversification strategy is the best practices realized at one company can be applied to other companies. By applying best practices learned from one company across all companies, UTC recognized they could improve