November 2019: in 2013 ThyssenKrupp had introduced the matrix management system. Product line- and country-management were to decide jointly on all important manufacturing and customer issues. However it didn’t help solving the grave problems ThyssenKrupp had. A grave disadvantage in the matrix system however is the long time for decision processes.
Whenever the matrix system is deemed to be necessary very often other problems are in the background. In fact developments in early 2018 showed the fundamental problems conglomerates – as of ThyssenKrupp – easily face, too many different products (and problems) have to be managed by one board.
Until 2019 quite a few plans for restructuring the corporation were set up and again dismissed. The company continued to miss its goals.
2019: starting with a new CEO at the new fiscal year on October 1, a preliminary new organizational structure goes into effect, main divisions will be:
- Steel Europe
- Elevator Technology
– to be sold in 2020 in part or completely as new stock company (IPO) or to other financial or strategic investors (competitors)
- Automotive Technology
main products: components for the auto industry and production lines for the auto industry
- Industrial Components
main products: i.e. wrought iron parts, large roller bearings
- Plant Technology
main products: i.e. chemical plants, cement plants, mining equipment
- Material Services
In these company units a huge amount of different products are designed, developed and manufactured. That “huge amount of different products” is a severe strategic problem of ThyssenKrupp. To which division should which product been assigned? Which are the high volume products for cost effective production-line-divisions? Or how are customer-oriented-divisions set up that serve customers with a variety of different products in optimal manner?
Restructuring is underway: I.e. the division Automotive Technology seems to be designated to become a customer oriented unit. But the customers, the auto industry, obviously are working with large numbers of products and need low cost products which can be manufactured in production lines only? The low volume products springs and stabilizers are one cause for substantial losses.- In these situations only outsourcing and creating high volumes somewhere else usually are the solution.
But these kinds of questions are lingering at many places in the corporation and have to be addressed urgently during next months. That might be the last chance to turn ThyssenKrupp into a sustainable, profitable company. If it will not succeed the future of the company could be doomed.
P.S.: These considerations are based on public information in the media. They are to illustrate theoretical findings of system organization. If the used assumptions prove to be different, different conclusions might be logical.
— More? See: Business Organization System Theory
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