Directorate of distance education

Organization
In order to control this far-flung network ABB employs a matrix 
organization, divided by products and geography.
The four major product lines are subdivided into Bas. Each BA 
manager is responsible for setting global strategy for that product line. 
That responsibility includes setting and monitoring factory cost and 
quality standards, allocating export markets among the BA factories, 
and personnel management and development. Within each of the three 
primary geographical regions ABB is divided by country. County managers 
deal with national and local governments, unions, laws, and regulations. 
They operate traditional national companies. But the country managers 
also work across Bas by coordinating all operations within their assigned 
country. It is this latter role that links business segments and attempts to 
create an efficient distribution and service network across product lines.
At a still lower level is the company manager. This person is 
responsible for a single facility and its products. The company manager 
reports to two bosses: the BA manager and country manager. This matrix 
organization creates what Barnevik prefers to call a “multi domestic” 
rather than a multinational company. It is, in Barnevik’s opinion, the multi 
domestic firm that can truly “think global, act local.” Company managers 
are usually nationals of the country in which they are employed. Naturally 
they are familiar with local customs and marketplace. But they are also 
forced to think globally because of the BA manager’s global strategy (i.e., 
export markets) for the domestically produced foods. As a consequence, 
ABB plants typically produced goods. As a consequence, ABB plants 
typically produce a variety of products for the local market and a narrower 
line for export. The narrower line reflects the particular specialty or core 
product of that plant. Barnevik notes that this strategy forces a plant to be 
flexible to meet specific local needs while still producing internationally 
competitive products for export.
In order for the matrix system to work Barnevik tries to “over in-
form.” Information is continually disseminated in face-to-face meetings 

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Notes
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between executive committee members and business area, country, and 
company managers. 
But it is Abacus, ABB’s management information system, that ties 
the highly decentralized company together. Abacus provides centralized 
reporting to ABB’s 1,300 subsidiaries and 5,000-plus profit centers.
In addition to traditional financial performance measures Barnevik 
reviews aggregated and disaggregated results by business segments, 
country, and companies. It is within this latter information that Barnevik 
discerns trends and problems. With little fanfare, the situation is discussed 
with appropriate ABB personnel. A course of action is quickly planned 
and implemented.