A 5 page paper discussing implications of the merger between Asea and Brown Boveri, and some of the problems the new company was forced to negotiate in forming the new and integrated company. The paper lists in a SWOT format the points raised in the Harvard case and concludes with recommendations for action. Bibliography lists 1 source.
Name of Research Paper File: CC6_KS1ABB.rtf
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create the worlds largest company in the industry. Asea has superior profitability, "sophisticated management controls, and marketing aggressiveness" (C475), and Brown Boveri has a log of orders waiting to
be filled, technical expertise and $4 billion in cash and marketable securities. Percy Barnevik is to be the CEO of the new company and already enjoys a positive relationship
with investment analysts who can help to market the new companys shares, but faces the formidable task of combining the two large businesses into one. SWOT Analysis Strengths *
The two merging companies are the top two in the industry. Their merger will result not only in the largest in existence, but also the definitive industry leader with
other competition lagging far behind. * Barnevik has produced a 21-page "policy bible" that specifically defines "the new organizational relationships, the commitment to decentralization and strict accountability, and the companys
approach to change" (C476). * Everyone involved in the merger of the two companies understands the urgency of attaining quick results. Planning and implementation are done quickly. * The
new company lacked a management information reporting system that could adequately provide information required for effective managerial decision making. ABB was able to bring their in-house system online only
a year after the merger was announced when it reasonably could have taken three. * New belt-tightening and efficiency measures were announced nearly simultaneously with the announcement of the merger.
The measures taken together resulted in much more efficient use of available resources and reduced operational expenses. * The new company was built on dedication to individual accountability and
decentralization of control while building greater centralization of information. * The ultimate corporate structure was designed to be one of the greatest simplicity possible, with levels of accountability built into
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