Sandvik AB :: Essays Papers

Sandvik AB Sandvik AB began operations as a small steel accompany in Sandviken, Sweden. The company, originally know as Goransson Hogbo Stal & Jernwerks, recognized early on the important role creating innovative techniques and products played in being successful. To this day, Sandvik maintains a firm commitment to research as a means of gaining combative advantage. Unfortunately, competing with other innovative industrial firms in a small plain like Sweden provides limited harvest-tide opportunities. The local environment made Sandvik invite growth would only be achievable through foreign securities industry discipline. So over the next century Sandvik would expand to become wiz 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 as cemented carbide fueled, product development and gave rise to new stemma areas. Such ad vances, coupled with a fond 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 period was a result of acquisitions. preliminary to the 1984 reorganization, Sandviks organizational structure consisted of divisions where managers had to report to both divisional focus and functional management at the parent company. For a company known for its innovations, this reporting relationship scored enormous bureaucratic waste and costs, as substantially as delayed decision-making. However, in 1983 the company established a decentralized structure, creating six business areas, two service companies, and three regional companies. Coromant emerged as the highest elapse business in the portfolio. Amongst the other business areas it served as a model for best practices and process innovation.Despite the success of his major initiatives, the genuine CEO, Clas Ake Hedstrom, i s still looking for ways to further 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 over the amount and level at which integration is needed. Employees are also concerned about a return to centralized decision-making and loss of autonomy over their business area. Finally, it is still undecipherable how the cost, fit and significance of further integration may impact business area needs. The uncertainty surrounding these issues makes the whole idea of integration to create synergies questionable.