Reorganizing ABB - From Matrix to Consumer - Centric Organization Structure (B)

On January 1, 2001, Jorgen Centerman became the CEO of ABB. Centerman was driven by a modern outlook, which revolved around serving the customers better by using IT. He conducted an analysis of ABB's customers, which revealed that the top 200 of them accounted for 30 percent of the company's revenues in 2000. Of this, 180 clients purchased their requirements from one ABB unit. The top 200 clients spent 8% of their total product expenditure on ABB's products. Based on the results of his analysis, Centerman soon announced major changes in Lindahl's group organization structure. In his new customer-centric organization structure, the entire ABB group was re-aligned around customer groups...

According to the analysts, the changes in the organizational structure of ABB, made by Lindahl, Centerman and Dormann resulted in the centralization of authority in the hands of global managers based in ABB's headquarters. As a consequence, the strategy of "think globally, act locally," for which ABB was renowned, suffered a setback.

Analysts felt that under Lindahl, ABB had benefited by creating three new business segments. The positive financial results were reflected in the financial year 1998, the first year of implementing the new structure...