Sandvik AB :: Essays Papers

Sandvik AB Sandvik AB began operations as a small steel participation in Sandviken, Sweden. The company, originally known as Goransson Hogbo Stal & Jernwerks, recognized early on the important role creating innovative techniques and products vie in being successful. To this day, Sandvik maintains a firm commitment to research as a means of gaining competitive advantage. Unfortunately, competing with some other innovative industrial firms in a small country like Sweden provides limited egress opportunities. The topical anesthetic environment made Sandvik realize growth would only be realizable through foreign market development. So everywhere the next one C Sandvik would expand to become one of the largest materials technology engineering companies on the globe. Sandviks expansion was facilitated through a strategy of unrelated diversification predicated upon innovation. Technologies, such(prenominal) as cemented carbide fueled, product development and gave rise to new business areas. such advances, coupled with a strong emphasis on internationalization, drove growth for a long time. However, growth slowed during the 1970s and into the 1980s. Much of the growth achieved during this issue was a result of acquisitions.Prior to the 1984 reorganization, Sandviks organizational structure consisted of divisions where managers had to say to both divisional management and functional management at the set up company. For a company known for its innovations, this reporting relationship created enormous bureaucratic waste and costs, as well as delayed decision-making. However, in 1983 the company established a decentralized structure, creating six business areas, two divine service companies, and three regional companies. Coromant emerged as the highest return business in the portfolio. Amongst the other business areas it served as a model for best practices and process innovation. disdain the success of his major initiatives, the current CEO, Cla s Ake Hedstrom, is still looking for ways to get along integrate and produce synergies amongst Sandviks business areas. Integration has already occurred or is being studied in human resources, marketing, and information technology. However, disagreement exists amongst managers oer the amount and level at which consolidation is needed. Employees are also concern about a return to centralized decision-making and loss of autonomy over their business area. Finally, it is still unclear how the cost, fit and significance of further integration may impact business area needs. The uncertainty surrounding these issues makes the undivided idea of integration to create synergies questionable.