Asea Brown Boveri, Ltd.

1. Asea Brown Boveri, Ltd. Group 5: Kerstin Hold Gracja Rudomino Daniel Schweifer Ute Teufelberger Peter Zajac WS 2003/04

2. Introduction ASEA founded 1883 BBC Brown Boveri founded 1891 MERGER founded 1987 140.000 employees in 100 countries today

3. ABB Ural ControlSystem:The early beginning • ABB Power Plant Control Mannheim  Permskaja GRES • Russian specialists trained in Mannheim for two years ( Inpatriates) • Developed specific knowledge • Successful implementation after come back

4. Candidate Characteristics Inpatriate Developed Emerging Flexibility H H Difficulty in adaptation M L Relative cost characteristics L L Motivation to participate H H Formal business education L L Willingness to accept position H H Inpatriate Characteristics in Emerging Markets

5. Joint Venture (1) • Joint Venture for Power Plant ControlSystem • Contribution • ABB: complete know-how on the system • Permskaja GRES: office buildings, real estate, engineers

6. Joint Venture (2) • Technopromexport joined negotiations  new markets for ABB • 3 parts signed shareholders agreement

8. Staffing decisions • Only one German in Joint Venture staff (Deputy General Director)  regional approach  parent country nationals only if expertise knowledge required

9. Difficulties in HRM • Russian employees used to social benefits, couldn´t be offered • Contracts obsolete because of inflation  unpossible to fix engineers salaries • Unable to motivate sales personnel

10. Comment • ABB tries to balance Global Integration and Local Adaption • Reason for failure: • Transition • Instability • Recent years

11. Conclusion (1) What motivated ABB to expand into Russia? • Advantage to receive more orders • Increase of market shares  market leader • Reducing trade barriers

12. Conclusion (2) What was the motivation to choose high number of Inpatriates? • Able to address people in emerging markets more effectively • Advantage in social knowledge  better skills

13. The End