May 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. Former CEO Heinrich Hiesinger expected to improve the decisions especially in overseas markets. – 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 have, too many different products to be managed in one board.In March 2018 considerations got under way to restructure the whole corporation including all 5 divisions:
- Steel Europe
- Elevator Technology
- Components Technology
- Industrial Solutions
- Material Services
The division steel was to be put into a joint venture with Tata. But even with the 4 remaining divisions ThyssenKrupp would have been a highly diversified corporation – too many different products and too many distinct customers.
2018: Besides putting the steel unit into a joint venture with Tata, the rest of ThyssenKrupp was to be split into two companies: Industrials and the Materials.
2019: The joint venture with Tata was called off, ThyssenKrupp thought the European Commission demanded too many concessions. But it still is obvious the conglomerate cannot be kept unchanged, earnings are not at all sufficient.
New plans are to uplift the division Steel Europe to the core of the new ThyssenKrupp and to list Elevator Technology as independent stock company. That are 2 smaller companies with a much smaller product portfolio, volumes look to be sufficient for cost efficient manufacturing.
For the remaining divisions customer groups and volumes have to be carefully scrutinized. If customers are distinct from other divisions and volume is adequate that division can become an independent company. If not merging with other divisions might be the solution with more extensive service to the customers or merging with still competing companies for higher volumes and more cost efficiency might be a solution.
This planning process is underway in ThyssenKrupp — public information is by far not sufficient for suggestions from outside.
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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