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8/10/2019 ABB Case Analysis Illustration
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Evolution of Organizations : A Case Study on
Presentation on
Evolution of Organizations
A Case study on
8/10/2019 ABB Case Analysis Illustration
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Evolution of Organizations : A Case Study on
Adapted from presentation by:
Mr. Satyandra Vadavalli (EMP15/A/42) Mr. Sanjay Patil (EMP15/A/26)
Mr. Amitabh Srivastava (EMP15/A/40) Mr. Shilan Shah (EMP15/A/33) Mr. Abnish Singh (EMP15/A/36)
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Evolution of Organizations : A Case Study on
Model of Organization Functioning
SITUATION VARIABLE
External Environment Constraints Opportunities Threats
STRATEGIC VARIABLES
Organizations Goals Top Management Ideology Org strategy for Growth & Survival Gen POLICY VARIABLES
PERFORMANCE VARIABLES
Evaluating Perforormance Within & Outside Reference to Standards
PATTERN VARIABLES
Effect of Situational,Structural, Strategic and
Behavioral variables incombination onperformance
STRUCTURAL VARIABLES
Organization structure Superstructure of Orgzn - Relationships Infrastructure of Orgzn - Controls
BEHAVIOURIAL VARIABLES
Actual Behavior Represents struggle to meet demands Conflicts, Cooperation, morale
fields of forc eswhich shape
the working ofOrganization in
Long Run
fields of forceswhich commit
theorganization aswhole to course
action
Organizationstructure,
reporting and
controls
Represents thehuman, social
&psychological
forces
Measures theEfficiency,
Profitability,Rate of growth,
Marketacceptance
When handledproperly, with a
visionarymanagement,
leads to SuperiorPerformance
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Evolution of Organizations : A Case Study on
Evolution of ABB
SITUATION VARIABLE ASEA - Slow Growth BROWN BOVERI Lowsales, Returns,
Management Problems Merger and birth of AB B
STRATEGIC VARIABLES Focus on Electrical Power Efficiency and responsiveness tocustomers Alliances and AcquisitionsGlobal scale, World ClassTechnology Orgn with Local roots
PERFORMANCE VARIABLES
Efficiency in operation lines Global growth
Performance monitoring by ABACUS
PATTERN VARIABLES
Effect of Situational,Structural, Strategic andBehavioral variables incombination onperformance
STRUCTURAL VARIABLES
Matrix organization structure Accountability & Ownership
BEHAVIOURIAL VARIABLES
Multiple reporting Conflicts due to varied interests
Merger of ASEAand B ROWN
BOVERI
To evolve as aGlobally Local
company
Functioning withClear
Responsibilityand
Accountab il it yUn alignedtargets andCONFLICTS
Efficient, GrowGlobally and
strategizebusinesses
Deficiency toproduceGLOBAL
MANAGERS
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Evolution of Organizations : A Case Study on
Origins of ABB1988
ASEA Slow Growth Rate and Low Profitability New CEO Percy Barnevik Redesign of the Company Increased Sales and Profitability
BROWN BOVERI Reduction of sales, Returns, Management problems
National subsidiaries constraining the growth of BBC Intense local competition Resistance to rationalization of production and cross-border co-
ordination by subsidiaries
Merger of ASEA and BROWN BOVERI to form ABB CEO - Percy Barnevik
Formation of an Organization 140 countries Coordinates 2,10,000 employees
Working in 300 companies and 5000 Profit centers
SITUATION VARIABLE
ASEA - Slow Growth BROWN BOVERI Lowsales, Returns,Management Problems
Merger and birth of AB B
Merger of ASEAand BROWN
BOVERI
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Evolution of Organizations : A Case Study on
Strategy ofABB
Locally responsive Maintain credible local presence in each of
its markets Be very efficient and cost effectiveness Alliances and Acquisitions
AEGs steam turbine business Westinghouses power distribution and
transmission Integration of these companies to ABB
To be a Big Global player with strongLocal roots
Efficiency in product lines and globaloperations
Retained earnings shall be 30 to 40 % ofTotal Earnings
STRATEGIC VARIABLES Focus on Electrical Power Efficiency and responsiveness to
customers Alliances and AcquisitionsGlobal scale, World ClassTechnology Orgn with Local roots
fields of forceswhich commit the
organization aswhole to course
action
Percy Barnevik, CEO
Be global alongwith being local,Big and small ,Centralized anddecentralized
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Evolution of Organizations : A Case Study on
Structure of ABB
STRUCTURAL VARIABLES
Organization structure Superstructure of Orgzn -Relationships Infrastructure of Orgzn -Controls
Organizationstructure,
reporting andcontrols
BUSINESS SEGEMENT
EXECUTIVE COMMITTEE
NATIONAL COMPANY
LOCAL OPERATING COMPANY
Profit CentreBusiness Geography
Business Segment Business Segment Manager and Member of Executive committee
Power Plants Power Transmission and Power Distribution Industrial & Building systems Transportation Finance
Business Area Business Area Manager
Country Country Manager
Local operating Company / Business Unit Local countryoperating Manager
Profit Centre Profit centre Manager
From the nature of operations, the organization structure need to be was one ofan international matrix of business and geography
Centralized & transparent Company wide information system ABACUS
ABB accounting and communication system
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Evolution of Organizations : A Case Study on
Structure of ABB
STRUCTURAL VARIABLES
Organization structure Superstructure of Orgzn -Relationships Infrastructure of Orgzn -Controls
Organizationstructure,
Reporting andcontrols
Initiatives Lean HQ Identification of managers who are
Flexible Cooperative in multicultural environments Adept for innovation, risk taking Ability to motivate others
People who aspire to become SUPER STARS willing leave old alliancesand capable of thinking in group terms are given responsibilities
Drive entrepreneurship Local companies
Organization Structure has to push Accountabi lity
Decision making Responsibi lity for action, far down the organizational hierarchy
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Evolution of Organizations : A Case Study on
Performance Monitoring in ABB Business Segment - Business Segment Manager, Member of Executive committee
Business Area - Business Area Manager responsible for
Efficiency in the product line
Growth of business globally Supporting Team BA Board Functional councils Controllers and Managers Task Force
Country - Country Manager responsible for
Coordination of various businesses in the country Local operating Company / Business Unit Local country operating Manager
Supporting Team Steering committee with reps from National company and BA
Profit Centre Profit centre Manager
ABA C U S
PERFORMANCE VARIABLES
Efficiency in operation lines Global growth Performance monitoring by
ABACUS
Efficient, GrowGlobally and
strategizebusinesses
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Evolution of Organizations : A Case Study on
Deliverables Business Area Manager
Responsible for the world wide strategy and performance Coordinates technology development Decides transfer prices among local operating companies in BA Transferring expertise within BA Capturing economies of scale Chosen among the LOCAL COMPANY OPERATING MANAGER Dissemination of Best practices Training and development of Managers
Country Manager
Profit & Loss responsibilities for all activities within the country Realize potential synergies across various companies Present Local face for various projects within the country
Provide Legal and political infrastructure for operations Co-ordinate personal development programs Local operating Company / Business Unit
Headed by a President with CEO responsibilities for his operations Implement the plans and objectives of BA Profit Centre
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Evolution of Organizations : A Case Study on
Behavioral traits in ABB Local company heads are reporting to
BA Managers
Country Managers
Priorities of BA Managers and Country Managers are different BA Manager Global Efficiency Country Manager Local responsiveness
Mismatch in expectations in Performance evaluations
OUT COME : CONFLICTS
Joint performance evaluation of LOC Heads
Constant exchange of communication and information
BEHAVIOURIAL VARIABLES
Actual Behavior Represents struggle to meet demands Conflicts, Cooperation, morale
Unalignedtargets and
Conflicts in t hesystem
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Evolution of Organizations : A Case Study on
Pattern Variables in ABB Change in Top Management
ABBs acquisitions necessitated restructuring of Executive committee
Formation of 3 regions Abolition of Deputy CEO Reporting changed from Country level to Regional level
Extensive communication
Constraints in Development of Global Managers due type of operations
PATTERN VARIABLES
Change in Topmanagement Global Managers
Acquis it ion,Change,
Deficiency toproduceGLOBAL
MANAGERS
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Evolution of Organizations : A Case Study on
Satyandra, Sanjay, Amitabh, Shilan, Abnish
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