ABB's CASE

ABB: Strategic Rise, Decline, and Renewal



ABB: Strategic Rise, Decline, and Renewal

Introduction

CEO Percy Barneviks, accounts for much criticism, but the fact remains intact that it was his management style, due to which ABB saw the strategic expansion over the years. His management philosophy draws its roots from his childhood, where he worked, the conditions around him managed to influence him greatly. The core objective, of CEO Percy Barneviks like any other CEO who wants to seek success for his/her business, thought the company should be able to do business in each of the major markets of the world. In order to achieve his goal he based his policy on the ideals such as Umbrella Culture, where he wanted to bring operations of a company under one umbrella, for which he intended to use Dollar as the indispensable tool.

Since ABB had deep roots in different countries, the culture of those countries was also very visible to ABB. Therefore; he tried to knit every culture into ABB and count on it to tap other markets. This saw, as a rise to form muti-national teams, which would work, closely to understand the each other's markets better and introduce the concepts, which were not, familiar in one market but the other in order to stand on a different level altogether.

Steps and Failures

Moreover, the concept of developing core technology and core competencies intends to bring the operational costs much lower level, which would give, rise to profits. This was did in order to take preventive measures and combat the attacks of the competitors on their existing customer base. Another initiative of the CEO was to divide the businesses that would cater to the local markets and the ones who would cater to the global markets. This action took to its eradicate its customer base rather understand the markets more closely and provide solutions as per the needs of that market. In order, for any business to make it to the true sense of multinationals, an effective communication strategy is very necessary so that the consumers all around the world can be attracted towards the company after company understanding their needs and ideals.These plans, CEO Percy Barneviks, had in mind in the end, his initiatives turned out to be a serious disaster, and he resigned in 2001 as CEO of the company. His initiatives filed because of the problems in financial services which resulted in lack of quality check in Power generation, Problems with Combustion Engineering USA, moreover, ABB in that year accounted for a loss of $729 million and the share price fell to two-third of the price in that year only as opposed to its progress in the preceding years.

CEO & It's Steps

In my opinion, many CEO's took crucial steps in order to bring ABB out of the but the steps taken by Fred Kindle who worked as CEO from September 2004-February 2005) were the best in my perspective. In his tenure, he categorized the areas business was operating in which provided ...