A report on COLGATE:PALMOLIVE:MANAGING INTERNATIONAL CAREERS

Submitted to: Patturaja Selvaraj Sir

in partial fulfilment of the IHRM Course.

Submitted by:

on 15 December, 2016

EXECUTIVE SUMMARY:
ABB is a Swiss-Swedish multinational corporation headquartered in Zrich, Switzerland,
operating mainly in the power and automation technology areas. ABB is formed in 1988 with the
merger of ASEA and BBC, world two large electrical equipment manufacturers. ASEA
contributed to superior current profit performance, sophisticated management controls and
marketing aggressiveness while BBC contributed strong order book and technical expertise
during the formation of ABB. Product mix of two companies were complementary to each other
with minimum overlap in power transmission business. With this joint venture ASEAN Brown
Boveri Ltd. (ABB) became worlds largest producer of engineering products and services.

SITUATIONAL ANALYSIS:
The case is about the company asea brown boveri limited (abb) formed as the result of the
merger bettween the two giants of the European countries( Asea AB of Sweden and BBC Brown
Boveri Ltd. Of Switzerland). After the merger the combine company ABB became the worlds
largest competitor in the power generation, transmission and distribution and the leading world
supplier of the process automation systems, robotics, high speed locomotives and environmental
and pollution control equipments.
SYNERGY FROM MERGER
The new company gained the synergy from both the companys. Asea was seen to contribute
more on the profit performance, management and marketing aggressiveness whereas the BBC
helped in the cash , marketable securities and technical expertise.

Percy Bernevik appointed the president and the CEO of the new formed company made sure that
the ABB hit the results after merger as soon as possible. He selected five key managers from
each company to form a ten top person level work group which did the task of implementing the
matrix structure in the organization . ABB also needed the 500 senior level managers to be
selected from both the companys for which he laid out the clearly defined KPIs to do the job. He
made sure that the operation of the company has been synchronised according to the best of the
level. Since 95% of the contracts in the power generation were given to the host companies ABB
also made many acquisition in European and U.S to get more of the contracts nad dominate the
market. He also focussed on the 7-3 formula that states that it is more profitable to make 10
decisions quickly in which 3 would work then to wasting time on one decision .

MANAGING THE NEW COMPANY

Barnevik made sure that the company is built on the two principles:
1. Decentralization of responsibility.
2. Individual accountability.

For the above two things to be achieved he resorted to the matrix structure. What he wanted to
achieve through this structure is
WE WANT TO BE GLOBAL AND LOCAL , BIG AND SMALL,RADICALLY
DECENTRALIZED WITH CENTRALIZED REPORTING AND CONTROL

PROBLEM STATEMENT:
COULD THE BERNEVIK STRATEGY OF MATRIX STRUCTURE ACHIEVE THE
SUCCESS IN THE NEW MERGED ENTITY OR SHOULD HE DO SOMETHING ELSE?
OPTIONS:
1. Go for the flexible structure for the transanational structure.
2. Go for the reduction at both at horizontal and vertical level.
3. Go for the matrix structure.

.
CRITERIA FOR EVALUATION
Financial implications.
Competition in the market.
Market conditions.
Cultural fit of the structure to various countries.
EVALUATION OF OPTIONS:
Go for the flexible structure for the transanational structure
This kind of the structure would be more useful in the environment when the market
conditions changes very fast. The company should operate as a transnational company
in the market even when geogpraphy is new or unknown . The whole idea is to find
the most adequate business model that balances the operation efficiency, asset

diversification and companys ability to adapt to the changing market. It would also
fit very well in the different countries to adapt easily. The financial implication could
be huge to have such arrangement at the large scale. Even the competitors could
focus more on standardization and defeat you.

3. Go for the reduction at both at horizontal and vertical level

The multinational company is easy to have a huge managing groups to
supervise all kind of departments in all over the world. In addition, too many
managers in the same horizontal structure will frustrate the employees
especially when two managers priorities dont coincide. As a result, even
through the enormous managers are required to administrate so huge
company, it is more important to implement flat organizations. Flat structure
facilitates a greater level of communication between employees and
management. They tend to be more democratic and offer a greater level of
innovation. Communication is usually faster, more reliable and more effective
than in tall structures

Go for the matrix structure

The main pros for the matrix structure is that it can provide both flexibility
and balanced decision-making . the disadvantage of the matrix structure

could come out that the employee would be confused or irritated to report to
the two person. But the structure in this company actually make managers
aware of the different roles and he needs to communicate his progress
effectively in that field. The financial implication would be low compared to
first two options. It might have some difficulty to adapt but managers can be
trained for it. Moreover market conditions make things easy for mangers to
understand performance in matrix structure. The competitor also will take
time to adapt to this structure if still not adapted.

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