PRESENTED BY-

Rahul Jain
Munmun Chakravarty
Richa Singh
Rohit kushwaha
Varnika Tripathi
ABB is a Swiss-Swedish \multinational corporation
headquartered in Zürich, Switzerland, operating
mainly in the power and automation technology areas.
ABB is one of the largest engineering companies as
well as one of the largest conglomerates in the world.
ABB has operations in around 100 countries, with
approximately 124,000 employees, and reported global
revenue of $31.6 billion for 2010.
It ranked 143rd in Forbes Ranking (2010).

ABB is traded on the SIX Swiss Exchange in Zürich

and the Stockholm Stock Exchange in Sweden since
1999, and the New York Stock exchange in the United
States since 2001.
• Consisted of Group Executive Management-President & CEO, Deputy
CEO, 11 EVP
• Assist audit, corporate control, corporate development, corporate
finance, information, insurance & risk management, investor relations,
legal affairs, management resources, marketing, public finance,
purchasing & export control, real estate, taxes, customs & technology.
• Task was to devise global strategies & periodically review
performance of ABB’s 8 business segments.
• Consisted of business area managers & country managers.
• BAMs provide logistics-related support to front line-operating companies.
• Business Area Managers formulate the global strategy for allotted business
area.
• BAMs ensure the maintenance of required quality & cost standards in ABB.
• Facilitate transfer of unique technical know-how & focus on R&D.
• Country managers headed the NHCs of ABB & were responsible to
implement ABB’s global strategy by taking local conditions into consideration
& were also responsible for formulating & implementing HR policies within
the country.
• Consisted of heads of the front line operating companies of ABB.
• Create real balance sheets with real responsibility for cash flow & dividends.
• Inherit results from year to year through changes in equity.
• Generate their own financial statements & sourced their own debt requirements.
• Reported to concerned area managers & reported to the managers where company
was located.
• Create more effective tools to recruit and motivate managers.
• These managers represented closest link to ABB’s customers
• These managers generated their own profit & loss statements,
were made accountable for their financial & operating
performance.
The challenge for Barnveik was to create a structural
framework into which its worldwide activities could
be integrated barnveik intented ABB to be “ global
and local, big, & small ,radically decentralized
but with central control". In order to attain this
objective he created a matrix structure.
 When top management wants to reduce
communication work then decentralization is
undertaken .

 when there is a need to take quick decisions on the

spot to take advantage of the situation then power
is delegated to the level where it is needed.
 When growth and diversification takes place then
decentralization is necessary for bringing flexibility in
operations are reducing burden on top executives .
 The company’s product or market may require
decentralization of decision making to give emphasis
to product or market.
 Operations of frontline operating companies
were integrated with ABB’s worldwide operations
& these companies got international identity
(exports increased, access to worldwide
distribution network).
 Economies of large scale operations in
international markets.
 ABB reaped significant financial benefits, reaped
rich dividends.

 Decentralized matrix structure enabled ABB to

respond quickly to changes in market conditions.
 Difficult for managers at the top to monitor the
activities due to the large number of
regions/companies that had to be supervised or
handled by them.

 Company had to encounter huge & severe

resistance from the local employee unions,
governments & press.
 Conflicting interests of country managers &
business area managers.
