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ABB Transformers

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ABB Transformers originally created a matrix organizational structure for its international operations that places control of business activities such as global strategy and research and development under the control of a Business Area (BA) manager and operational control of facilities within each nation under control of a Country Manager (CM). In this structural paradigm, the BA managers and CMs were envisioned as coequal in authority, both reporting directly to the Executive Committee that oversees company operations as a whole. As a result, there were occasional conflicts between the two managerial segments as to the optimum methods to achieve long-term strategic goals, the resolution of which requires negotiation. 


Primary Challenge for ABB Transformers

ABB Transformers

The effect was to reduce the firm's flexibility in responding to emerging challenges and opportunities in the global marketplace.  As a result, the firm abandoned this management structure in 1998, dividing the BA managerial functions between corporate headquarters and the individual CMs.  The primary challenge for ABB Transformers created by this change was:

  1. To a decentralized management structure lies in maintaining similar product quality
  2. Technological information transfer between the various divisions and geographic regions in which the firm does business and in maintaining a consistent transnational corporate culture.

ABB Group Structure

The old ABB group structure was a matrix in nature with the decision-making process requiring concurrence between the two managerial branches and is commonly used by multinational conglomerates.  The new structure has ended the matrix organizational system and is more decentralized, with more efficient communication links between the firm's central management and the various CMs in the nations where the firm operates.  The new structure is more likely to increase the ability of the firm to rapidly respond to local conditions in the diverse global business environment, enabling it to achieve greater efficiency in its use of resources within the local operating environment of each CM.

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