ABB CEO Rosengren Outlines Decentralization Plan

ABB’s new Chief Executive Bjorn Rosengren is determined to decentralize the Swiss engineering group to improve its performance, he told Swiss newspaper Neue Zuercher Zeitung in an interview.

The company, whose products range from circuit breakers to electric motors for ships, has been weighed down by a business model that was too complicated, said the former Sandvik boss who took over in March.

“I do intend to further decentralise,” he said in the interview to be published on Saturday.

“Up to now we have only ever talked about four businesses, and I will delegate responsibility to our 17 business units,” Rosengren added.

More details will emerge on when he outlines the company’s new strategy on June 10, Rosengren said, adding it would be a gradual change.

“What caused ABB problems was the complicated business model,” he said, referring to the previous structure where head office was involved in most decisions.

“Such matrix organisations create high costs because the head office hinders business more than it creates added value,” Rosengren said.

“The business units know best how to work, and now the responsibility will be passed down to them.”

(Reporting by John Revill. Editing by Jane Merriman)