Abb's Key Successful

  Firstly, ABB’s model focused on two principles: decentralized responsibility and individual accountability with the foundation of 1,300 front-line companies. In addition, by implementing “30/30/30 rules”, ABB could get rid of bureaucracy in its system. Besides, to ensure the accountability, Barnevik assigned a team to develop a new transparent reporting system which aimed at “democratizing information”.

Secondly, the managers were responsible for the assets and liabilities they were given control and therefore, they were expected to act “better roughly and quickly than carefully and slowly”. In ABB matrix model, responsibilities of managers were clearly defined (Exhibit 1 and 2) and well communicated through the organization (Exhibit 5). “The company’s broad philosophies were translated into specific task requirements for managers at all level. While BA management was responsible for setting worldwide strategy and overall objectives, local company managers controlled operations and responsible for profits. The integration of different interests took place through a rigorous planning and budgeting process, the assurance of appropriate implementation through a sophisticated set of formal and informal controls”.

Thirdly, in creating the management team, the managers were chosen not only on experience background but also their personality which were their flexibility, integrity, and statesmanship. Those people could work effectively in highly intensive and uncertain environment. The BA board was comprised of only four people, who displayed requisite personal characteristics and still could ensure the coordination and integration.

The fourth key element of ABB’s success was its ability to integrate all front-line companies. The company was not centralized but built integratively. For example, Gundemark was the Sweden’s relay company manager but also the relay global BA’s head. In addition, a clear global relays strategy was developed which proposed a broad...