Student Learning from Preparing and Discussing Two Briefing Papers Essay

Student Learning from Preparing and Discussing Two Briefing Papers - Essay Example The products involved the power generation, transmission, distribution, industrial and building systems, and transportation, while the regions consisted of Asia Pacific, Europe and America (Haberberg and Rieple, 2008). For this reason, Bernavik was recognized for creating a fundamentally different model that could be used to organize and manage a large company. Before Bernavik handed over to Goran Lindahl, in 1997, ABB had continued to achieve spectacular results in which its profits had increased nearly four times, its turnover had doubled, and its return and capital employed had also increased from 12% to 20%, from 1988. However, five years later, after Goran took over the management, ABB started experiencing loses. According to Haberberg and Rieple (2008), the company had a debt of more than $4billion and had suffered a loss of about $691 million within five years: its survival was hanging in the balance. When Bernavik was the CEO, the company purchased about 200 companies, which were successful and formed the basis of global leadership positions. However, the main problem arose after the company decided to purchase an American Industrial boiler manufacture called the Combustion Engineering. As stated by Haberberg and Rieple (2008), after ABB had purchased the company, it was declared that Combustion Engineering insulated its product using asbestos. ... According to Haberberg and Rieple (2008), minimal administration led to lack of standardization of products. The company had four headquarters and about six hundred spreadsheets were being used around the ABB, which made it difficult to share files. In addition, independence of the companies was extremely high. For instance, one factory decided to export transformers to Africa, which was not in its Charter. Moreover, CEO Lindahl contributed highly to the problems ABB was facing. First, he simplified the innovation structure to eight product based divisions, which dissolved the regional dimensions from the matrix. According to Haberberg and Rieple (2008), this caused unnecessary political debate and compromised solutions because the managers concentrated on reconciling the demands of the products and regional bosses. Additionally, Lindahl made a decision to exit the transportation and power generation businesses and closed eleven factories in Europe, which led to loss of about 10,000 jobs. Although this helped the company to make a profit, it affected the expansion and productivity of the company. In addition, other CEO’s who came after Lindahl did not do much to promote the growth of the ABB. For instance, Jurgen Dormann did not know much about the company and the problems it was experiencing by the time he was appointed the CEO. He set up pension funds for the former CEO’s Bernavik and Lindahl of $51 and $81 respectively, which affected the financial status of the company. According to Douglas and Wind (2010:568), success can only be obtained by developing marketing strategies and products that match the specific characteristics of the international markets. Adopting a uniform