ASEA BROWN BOVERI

ABB (ASEA Brown Boveri) is a multinational corporation headquartered in Zurich, Switzerland, operating mainly in robotics and the power and automation technology areas. It ranked 158th in the Forbes Ranking (2013).

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 140,000 employees in October 2015,[3] and reported global revenue of $39.8 billion for 2014.[1]

ABB is traded on the SIX Swiss Exchange in Zürich, Nasdaq Stockholm and the New York Stock Exchange in the United States.[4]

ABB's Indian unit, ABB India Limited, is traded on the National Stock Exchange of India and on the Bombay Stock Exchange. The Indian subsidiary of ABB has a market capitalization of over $4 billion.[5]

HISTORY

ABB resulted from the 1988 merger of the Swedish corporation Allmänna Svenska Elektriska Aktiebolaget (ASEA) and the Swiss company Brown, Boveri & Cie (BBC); the latter had absorbed the Maschinenfabrik Oerlikon in 1967. CEO at the time of the merger was the former CEO of ASEA, Percy Barnevik, who ran the company until 1996.

ABB's history goes back to the late 19th century. The company was incorporated by Ludwig Fredholm in 1883 and Brown, Boveri & Cie (BBC) was formed in 1891 in Baden, Switzerland, by Charles Eugene Lancelot Brown and Walter Boveri as a Swiss group of electrical companies producing AC and DC motors, generators, steam turbines and transformers.

Organizational structure

ABB is the world's largest builder of electricity grids[6] and is active in many sectors, its core businesses being in power and automation technologies. The company has one corporate division and five production divisions since reorganisation in January 2010. ABB is one of the few large companies that have successfully implemented the matrix structure in their organization.

Corporate and Other

The Corporate and Other department of ABB deals with the overall management and functioning of the company as well as asset management and investment. It supports MNCs.

Discrete Automation and Motion

The division Discrete Automation and Motion provides products and services for industrial production. It includes electric motors, generators, drives, programmable logic controllers (PLCs), power electronics and industrial robots. ABB has installed over 200,000 robots.[7] In 2006, ABB opened a manufacturing centre in Shanghai, China. Also, wind generator, solar power inverter, UPS products belong to this division
Low Voltage Products

The Low Voltage Products division manufactures low-voltage circuit breakers, switches, control products, wiring accessories, enclosures and cable systems to protect people, installations and electronic equipment from electrical overload. The division further makes KNX systems that integrate and automate a building's electrical installations, ventilation systems, and security and data communication networks. Low Voltage Products also incorporates a Low Voltage Systems unit manufacturing low voltage switchgear and motor control centres. Customers include a wide range of industry and utility operations, plus commercial and residential buildings.
Power Products

Power products are the key components for the transmission and distribution of electricity. The division incorporates ABB's manufacturing network for transformers, switchgear, circuit breakers, cables, and associated high voltage and medium voltage equipment such as digital protective relays. It also offers maintenance services. The division is subdivided into three business units - High Voltage Products, Medium Voltage Products and Transformers.
Power Systems

Power Systems offers turnkey systems and service for power transmission and distribution grids, and for power plants. Electrical substations and substation automation systems are key areas. Additional highlights include flexible AC transmission systems (FACTS), high-voltage direct current (HVDC) systems and network management systems. In power generation, Power Systems offers the instrumentation, control and electrification of power plants. The division is subdivided into four business units - Grid Systems, Substations, Network Management, and Power Generation.
Process Automation

The main focus of this ABB business is to provide customers with systems for control, plant optimization, and industry-specific automation applications. The industries served include oil and gas, power, chemicals and pharmaceuticals, pulp and paper, metals and minerals, marine and turbocharging. By 2014, PA will consist of Six business units: Turbocharging, Marine, Control Technology ( the world's No 1DCS supplier) Measurement Products & Services, and Industrial Solutions (consolidation of O&G, Mining, and PMC into one business unit).

CORPORATE AFFAIRS

In 1990, ABB purchased Westinghouse's metering and control division (the load control division was spun off to Cannon Technologies in the late 1990s and the meter division was spun off to Elster Electricity in the early 2000s). Also, in the early 1990s, ABB purchased Combustion Engineering (C-E), headquartered in Stamford and Norwalk, Connecticut, a leading U.S. firm in the development of conventional fossil fuel power and nuclear power supply systems to break into the North American market. Klaus Agthe was CEO of the US operation at the time. Continuing with its expansion plans, ABB purchased Elsag Bailey, a process automation group, in 1997 which included Bailey Controls, Hartmann & Braun, and Fischer & Porter. This was the largest acquisition to date in ABB's history.

ABB bought International Combustion Ltd[8] from Rolls-Royce[9] in 1997.

ABB's boiler and fossil fuel businesses were purchased by Alstom in 2000, and its nuclear business was purchased by Westinghouse Electric Company in 2000. In 2000, ABB also signed a contract for the delivery of equipment and services for two North Korean nuclear powerplants to be supplied under an agreement with the Korean Peninsula Energy Development Organization (KEDO),[10] a consortium formed in 1995 by the governments of the United States, Japan, South Korea and the European Union.[11] ABB formally divested from a joint venture named ABB-Alstom Power in 2000, and sold its interest in conventional power generation systems to Alstom Power. ABB's nuclear business was sold[12] to BNFL and merged into Westinghouse Electric Company.

In 2001, ABB was ranked as number one on the Dow Jones corporate sustainability index[13] for the third year in a row.

In 2002, ABB asked Lindahl, the company's former chief executive, to return some of his $50 million retirement pay, which its board called excessive. ABB also asked its former chairman Percy Barnevik to pay back part of his $87 million pension package. The size of the pensions was disclosed at the same time as ABB's $691 million net loss for 2001 made headlines and drew sharp criticism in Switzerland and Sweden.[14]

ABB's Building Systems business unit was sold off in 2004 to Capvis,[15] a Swiss private equity company, as part of ABB's strategy to focus on power and automation technologies. ABB's building systems businesses in Australia and Hong Kong were sold off the year before, in May 2003, to Downer EDI Limited. Building Systems provided services for building facilities encompassing indoor air quality, building automation as well as power distribution and management.

Financial debt and lingering asbestos liability brought ABB to the brink of bankruptcy in the early 2000s. In 2006, ABB returned to financial health by settling its asbestos liability regarding claims that were filed against ABB's U.S. subsidiaries, Combustion Engineering and Lummus Global.[16] In August 2007 Lummus Global was sold to CB&I.[17]

In December 2008, ABB acquired Ber-Mac Electrical and Instrumentation to expand its presence in western Canada's oil and gas industries. Ber-Mac Electrical and Instrumentation has been in the business of supplying electrical power and instrumentation equipment and services, both domestically and to international markets since 1980. Ber-Mac provides its clients with expertise in industrial automation, electrical and instrumentation design, process optimization, panel fabrication and field services. It is particularly strong in the Oil & Gas industry. Ber-Mac’s value proposition in engineering expertise and service capabilities is highly respected throughout Western Canada, this was a key factor in ABB’s decision to acquire the firm. This acquisition significantly expanded ABB’s presence in Western Canada to more than 760 employees in over 20 locations.

In 2009, ABB realigned its automation divisions to enhance growth opportunities. As of January 1, 2010, the business units in the Automation Products and Robotics divisions were regrouped into two new divisions – Discrete Automation and Motion, and Low Voltage Products. The Process Automation division remained unchanged except for the addition of the instrumentation business from the Automation Products division.

In May 2010, ABB acquired software company Ventyx for more than $1 billion from Vista Equity Partners.[18]

In 2011, on May 9 ABB announced acquisition of Australian-based Mincom Limited from private equity firm Francisco Partners - to expand their enterprise software business for undisclosed sum.[19] On July 29, 2011, acquisition has been finalised.[20] Mincom and Ventyx were subsequently integrated under the Ventyx name, and have now been integrated into ABB as the Enterprise Software Product Group.

In 2011 ABB acquired Baldor Electric USA for $4.2 billion in an all-cash transaction

On January 30, 2012, ABB Group acquired Thomas & Betts in a $3.9 billion cash transaction.[21]

On June 15, 2012, ABB completed acquisition of commercial and industrial wireless technology specialists Tropos.

In July 2013, ABB acquired Power-One in a $1 billion all-cash transaction, to become the leading global manufacturer of solar inverters [1

MISSION

Improve performance: ABB helps customers improve their operating performance, grid reliability and productivity whilst saving energy and lowering environmental impact.

Drive innovation: Innovation and quality are key characteristics of our product, systems and service offering.

Attract talent: ABB is committed to attracting and retaining dedicated and skilled people and offering employees an attractive, global work environment.

Act responsibly: Sustainability, lowering environmental impact and business ethics are at the core of our market offering and our own operations.

VISION

As one of the world’s leading engineering companies, we help our customers to use electrical power efficiently, to increase industrial productivity and to lower environmental impact in a sustainable way. Power and productivity for a better world.

DEFINITON

A culture is comprised of the shared values, customs, traditions, rituals, behaviours and beliefs shared by a social group (national, ethnic, organizational, etc.).Cultures also share languages, or ways of speaking.From a communication perspective, cultures are made and remade through the words we use to describe our world. Culture represents a common set of values (“shared meanings”), shared by members of a population, a organization, a project/programme purpose unit or a profession (e.g., engineers versus scientists). Culture change with the times but the speed at which the culture of different institutions change varies widely.

TEN CHARACTERISTIC OF ORGANISATION CULTURE

Member Identity : The degree to with the organization as a whole rather with their type of job or field of professional expertise.

Group Emphasis : The degree to which work activities are organized around groups rather than individuals.

People Focus : The degree to which management decisions take into consideration the effect of outcomeson people within the organization.

Unit Integration : The degree to which units within the organization are encouraged to operate in a coordinated or interdependent manner.

Control : The degree to which rules,regulations,and dirct supervision are used to oversee and control employee behaviour

Risk Tolerance : The degree to which employees are encouraged to be aggressive,innovative and risk-seeking.

Reward Criteria : The degree to which rewards such as salary increases and promotion are allocated on employee performance criteria in contrast to seniority,favouritism,or other non- performance factors.

Conflict Tolerance : The degree to which employees are encouraged to air conflicts and criticisms openly.

Means-end orientation : The degree to which management focuses on results or outcomes rather than on the techniques and processes used to achieve those outcomes.

Open-systems focus : The degree to which the organization monitors and responds to changes in the external environment.

TYPE OF ORGANISATION CULTURE

LINEAR ACTIVE

Task oriented
Official Channels
Straightforward discussion
Brief communication
Clear agenda
Organised planners
SWOT,MBO,JIT

CLEAR AGENDA

TASK ORIENTED

Our management meetings now take place in key operating locations. We come face to face with the people involved, experience their best practices, and give them a stake in the decision process.

SWOT ANALYSIS

ABB GLOBAL CULTURE

INTEGRITY

"ABB is committed to fostering a culture where integrity is woven into the fabric of everything we do. “

SUSTAINABILITY

"For ABB, sustainability is about balancing economic success, environmental stewardship and social progress to benefit all our stakeholders."

DIVERSITY

At ABB, diversity means difference –differences that make each of them unique. This includes tangible differences such as age, gender, ethnicity, physical disability and appearance as well as underlying differences such as beliefs, ways of thinking and acting.

SUMMARY OF CASE STUDY

They are global giant organization and yet act as local business.So it's no surprising that a firm like ABB,have a slow decision-making culture.

Global company that appreciates diversity, people development and opportunities to grow.But it's hard to implement idea due to interest conflicts.

The ABB culture of diversity, perseverance and teamwork has helped to be one of the most successful company in the world.

QUESTION 1

Would you desccribe ABB as a more mechanistic or an organic organization?

Characteristics of a mechanistic organization include a high degree of organizational complexity, formalization, and centralization.

Operates under a Classical, Mechanistic form
Clear separation and division of work and resources amongst units
Transmission and Distribution
Industry and Building
While a separation exits there still is a clear sense of control and coordination amongst the pieces
Clear job definitions and responsibilities
A well developed command hierarchy
Country organization
Recruit, track, promote
Global Matrix Structure

QUESTION 2

How have technology and communications affected ABB's organizational structure ?

When technology is used in the organization, the information in databases has become easier for employees to access. At the same time, the rapid spread of e-mail, wireless technology, and mobile phones has made it easier for employees to communicate.The spread of e-mail, company intranets, and multifunctional smartphones has made corporate managers more accessible than ever before.

Business strategy - collapsing time and distance, enabling electronic commerce
Organization Culture - encouraging the free flow of information
Organization Structures - making networking and virtual corporations a reality
Management Processes - providing support for complex decision making processes
Work - dramatically changing the nature of professional, and now managerial work
The workplace - allowing work from home and on the move, as in telework

QUESTION 3

How would you describe the characteristics of ABB's culture?

Guided Missile Characteristic

Performance emphasised
Cross disciplinary
Team approach emphasised
Task oriented
Impersonal
Highly Egalitarian

PERFORMANCE EMPHASIZED

ABB takes performance considerations in each component of remuneration

TEAM APPROACH,IMPERSONAL

ABB offers an innovative, versatile and international environment. Our company culture is built on the principles of self-responsibility, team spirit, global thinking and the expertise of the employees.

HIGHLY EGALITARIAN

Employees at ABB contribute suggestions and give feedback on all levels. Ideas are embraced and new perspectives and external views are appreciated.

CROSS DISCIPLINARY,EMBRACE DIVERSITY

In addition to special initiatives for diversity, ABB place a strong focus on measuring, monitoring and driving participation in their global and local talent management and learning and development programs to ensure the participation is diverse.