FindArticles / Business / European Business Forum / Spring, 2000
Understanding ABB's latest quickstep: a case study in organisational change by Winfried Ruigrok
Comments At ABB, there is an explicit view on the sequencing and transition of an organisational form, which has been described by Lindahl and was restated by one of our interviewees. Given the environmental conditions, organisations develop a form that may enable them to improve performance for a number of years. However, in the view of ABB, organisational life cycles are limited; after some five years, the performance gains of a previously appropriate form have been exploited to the full, and performance begins to decline. At that moment ABB will have to adjust its form to the newly changed environmental conditions. An organisational form can thus be seen as a temporary optimal growth trajectory. Even if the performance benefits are not immediately visible, they will emerge in due course. This article is based upon Winfried Ruigrok, Leona Achtenhagen, Mathias Wagner and Johannes Ruegg-Sturm. ABB: Beyond the global matrix towards to network multidivisional organisation to appear in The Innovating Organisation, edited by Andrew Pettigrew and Evelyn Fenton, London: Sage Publications, to be published in June 2000. RELATED ARTICLE The ABB case drives home some management truisms and points at the difficulties of building up a network organisation. * It is possible to reduce managerial hierarchies and decentralise operational decision-making, but this may easily go at the expense of company-wide coordination. * Pushing for internal transparency, entrepreneurship and profit responsibility may produce a culture in which 'strong men win' (as ABB's culture
