Organisation and behaviour
You are a member of a team of researchers employed by HCM Consultants (fictitious). Your team is currently carrying out surveys and compiles statistics on a wide range of employment issues at the request of local employers or employer organisations.
Your team has just been assigned to conduct an investigation into how sample of organisations approach the management of their activities. Your analysis will extend into an examination of organisation structure and culture, as well as management style.
COMPANY – Electrolux
AB Electrolux (‘Electrolux’ or ‘the group’) is a leading producer of appliances for household and commercial use. The group operates in Europe, North America, Asia Pacific and Latin America. It’s headquartered in Stockholm, Sweden and employs about 51,544 people. The group sells 40 million products annually across 150 countries under various brands. Some of its products include refrigerators, dishwashers, washing machines, vacuum cleaners, cookers, and air-conditioners that are sold under brands such as Electrolux, AEG, Eureka and Frigidaire.
The group distributes its products through 20 sales companies worldwide and through a global network of independent distributors. Electrolux has its manufacturing facilities in 16 countries across the world. The group’s manufacturing operations consist mainly of the assembly of components and processing of standard raw materials sourced from various third party manufacturers.
Electrolux operations are divided into five business areas, which include six sectors and a total of 25 product lines. Within Major Appliances, the business sectors are geographically defined, while the sectors Professional Products and Floor Care and Small Appliances are global.
There are five Group staff units that support all business sectors: Finance, Communications, Branding, Legal Affairs, and Human Resources and Organizational Development. In order to fully take advantage of the Group’s global presence and economies of scale, a global organization was established in 2009 with responsibility for product development, purchasing and manufacturing within Major Appliances. The Group has a decentralized corporate structure in which the overall management of operational activities is largely performed by sector boards.
The Swedish multinational company has grown through acquisitions to become a dominant player in Europe. But the European market is highly competitive and the company had to find ways to cut down on costs and improve product standards to stay ahead of fierce competition. Electrolux Home Products Europe used a functional organizational structure to compete in the European market.
Their solution was quite simple yet strategic in nature. They introduced a Europe-wide functional structure to replace the geographical structure (resulting from its acquisitions). The new organizational structure had four functions/departments.
1. Purchasing, Production and Product Development – This department/function was important as it ensured a seamless flow from supplies to finished products.
2. Supply Chain Management and Logistics – This function was responsible for getting the products to the customer and created the association between sales forecasts and factory production.
3. Product Businesses, Brand Management and Key Account Management – This function was involved in all the marketing activities to support products and brands. Also included key account management, service and spare parts functions.
4. Sales clusters – The different sales divisions grouped geographically. The Electrolux People Vision is to have an innovative culture with diverse, outstanding employees that drive changes and go beyond in delivering on the Group’s strategy and performance objectives. The Electrolux culture features diversity and innovation.
Development of innovative products is a vital part of this vision. Diversity is a...
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