Pergamon S0956-5221(96)00002-4 Stand. J. Mgmt, Vol. 12, No. 2, pp. 123-137, 19!76 Copyright © 1996 Elsevier Science Ltd Printed in Great Britain. All rights reserved 0956-5221/96 $15.00 + 0.iX) BUILDING A TRULY GLOBAL ORGANIZATION? ABB AND THE PROBLEMS OF INTEGRATING A MULTI-DOMESTIC ENTERPRISE CHRISTIAN BERGGREN* The Swedish Institute for Work Life Research, Sweden (First received December 1994; accepted in revised form December 1995) Abstract -- ABB, a Swiss-Swedish electrotechnical giant, has been heralded as a new kind of international enterprise, using an innovative matrix and lean management to combine global resources with decentralized local presence. Starting from a criticism of the "process school" in international management research, the article demonstrates the validity of Chandler's insistence on analysing organizational structure from the perspective of corporate strategy. The argument is elaborated in a comparison of ABB and GEC-Alsthom, another electrotechnical cross-border merger with a very different strategy and structure. The importance of a dynamic analysis is emphasized and illustrated by an account of the development within one business area, Power Transformers. The emergence of a third dimension, in addition to the two-dimensional matrix, is another example of organizational dynamics within ABB. The conclusion points to the gap between competitive realities and the ideal of the transnational corporation. Copyright © 1996 Elsevier Science Ltd THE ABB PHENOMENON AND INTERNATIONAL MANAGEMENT RESEARCH "If lean and mean could be personified, Percy Barnevik would walk through the door... Barnevik is Europe's leading hatchet man. He is also the creator of what is fast becoming the most suc- cessful cross-border merger since Royal Dutch linked up with Britain's Shell in 1907" (Rapoport, 1992, p. 24). In Business Week, Fortune and Harvard Business Review, ABB and its outspoken CEO Percy Barnevik have for several years figured prominently as a beacon for the new inte- grated European firm in particular, and for lean international management in general (Taylor, 1991; Hofheinz, 1994). Tom Peters refers to ABB as one principal inspiration for his "liberation management" and refers to Barnevik as abhorring bureaucracy: "... his abiding hatred of bureau- cracy is critical to making the ABB structure work" (Peters, 1992, p. 47). The break-up of the multinational ABB into a multitude of accountable small businesses has been heralded as an exemplar in avoiding the "Big Company Sickness" (Kapstein, 1990). Globalized, decentralized, lean and in constant change -- ABB is presented as the very antithesis of the hierarchical and ethnocentric multinationals so prominent in previous decades. It is marketing itself as a company with many home countries, always "being local world-wide", a new type of corporation with the two-fold advantage of local specialization on the one hand, and global resources and coordina- tion on the other. The fascination of the business press and management consultants with the ABB-phenome- non runs in parallel with favourite themes of the process school in international management *Present address: The University of LinkOping, EKI, S-58183, Link6ping, Sweden. 123