Electrolux

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Case 10.1 : Electrolux Cleans Up

Summary

Electrolux produces household items that produce household products to help simplify household chores. In 2002, Hans Straberg became Electrolux Chief Executive. He joined the company when the company faced spiraling costs and were losing their customer base. As Chief Executive, he had to make difficult choices regarding how to make the organization successful. He decided to increase communication, rely on group teams, and reduce costs by shutting down many plants in the Western Europe and shifting work to cheaper places.

Breaking down barriers between departments

Straberg brought on change in the organizational culture. He forced his designers and engineers, marketers and managers to work together in a groups and teams. He encouraged them to increase information sharing between them to remove communicational barriers to brainstorm and work together to come up with products. In order to speed up the transition and build the teams, he hired executives from successful companies who have already implemented these systems successfully in other organizations such as Proctor & Gamble and PepsiCo.

Kim Scott, group leader held brainstorming sessions and she urged everyone to think of themselves as the consumer. Research and development worked closely with the designers with new designs which avoided technical glitches.

Advantages on work teams

The incorporation of the concept of teams in Electrolux was definitely a good decision. A number of advantages appear when individuals in an organization work together. The team can accomplish a whole lot more in less time. Because of their brainstorming sessions, the team came up with several innovative products. They also developed a product that had less technical glitches than in the past. Designers in the past developed products on their own and these products developed issues. This team approached saved them time and money. Product launches doubled in...
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