ABB Restructuring
1.Why is ABB restructuring again, so soon after its last restructuring? According to the article, the restructuring is occurring to make ABB more cost efficient and faster. In addition, the company wants to confront the changes caused by globalization by abandoning the regional structure and concentrate more on specific countries. Prior to the restructuring the company was made up of a matrix of 36 business areas (BA) and each of the BA reflected an international product line. In addition, to the BA part of the matrix, there also existed country management, which was the prevalent form of management in the country (Lubatkin & Uhlen). However, after the restructuring BA's were made responsible for businesses on an international basis. This aspect of the restructuring took place so that there were no longer be any confusion concerning the objectives established by the BA and those established by country management (Lubatkin & Uhlen). In addition to this aspect of the restructuring, ABB wanted to make its segments (composed of various BA's) to be more manageable and as such they have been divided (Lubatkin & Uhlen). Overall it seems that ABB has restructured so soon after the last restructuring so that the company can meet th
Namely there are cultural differences that greatly influence the manner in which the company conducts business in China (Lubatkin & Uhlen). Although the positioning that ABB has in China is good there are some problems experienced by the company in the country. In addition, there are differences related to product standards and manner in which consumers view the products. The company has nine offices in China and is involved in 15 joint ventures. Although the company tries to train local employees to take over management positions when expatriates leave, there have been problems with the local managers receiving the correct type of training (Lubatkin & Uhlen). Should ABB even be in China? Does their presence enhance their worldwide advantages?ABB should definitely be doing business in China. The article reports that teamwork can be against cultural norms is China but serve a critical role in conducting business (Lubatkin & Uhlen). The article reports that ABB has been doing business in China since 1919, establishing its first office there in 1979. This is a large market that is unparalleled in its growth (Lubatkin & Uhlen). The experiences that they have in China assist them when they set up operations in other foreign countries, and prevent them from making the same mistakes. The challenges that the company faces are not dissimilar to the challenges that any company, that operates internationally, experiences; it is an ordinary risk associated with doing business in a foreign country. Will ABB's restructuring efforts resolve some of the problems it is experiencing in China? It is unclear whether or not the restructuring will aid ABB in confronting the challenges that it is experiencing in China. In some ways, it seems that the structural changes will reduce some of the confusion that might exist as it relates to the Chinese Market and the company's global market in general. ABB had been hesitant to change its products to meet Chinese standards (Lubatkin & Uhlen).
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