Asea of Sweden and BBC of Switzerland announced the merger in 1987 to form ABB company. Each parent company is to hold 50 percent of the new company.
BBC was the third largest company in Switzerland, and it has been very successful in the electric industry. Its past successes mainly owe to the focus strategy and geographic organization. BBC emphasized technology and quality, which enabled it build up its competitive advantage and achieved long-term success. In order to meet the market environment at the time, together with the deep-rooted culture, it built up the geographic organization. This organization stresses local autonomy because it is believed the local management is the best place to negotiate with the public utilities and this structure can meet the strictly local competition. Moreover, it resulted from the foreign exchange restrictions during the definite historical time. The strategy and the organizational structure brought about continuous successes because of the booming demand. However, it increased risks at the same time. When the economy collapsed and demand declined in the 1980s, the company faced with a stagnating situation. The organization structure made decision-making much slower than the changing market required. In 1987, the company once tried to shift its structure to divisional organization, but it’s not implemented into reality.
BBC’s corporate culture reflected the organizational tradition and the characteristics of the business. The culture mainly includes the following aspects: 1. Focus on technology. This is the core competency of the company, but aroused some problems at the same time. It bred certain arrogance and neglected the changing market and customers. 2. Perfectionism in problem solving. This may bring out exactness ...