XIBMS – THE ABB PBS JOINT VENTURE IN OPERATION

XIBMS – THE ABB PBS JOINT VENTURE IN OPERATION

            ABB Prvni Brnenska Stojirna Brno, Ltd. (ABB-PBS), Czechoslovakia was a joint venture in which ABB has a 67 per cent stake and PBS a.s. has a 33 per cent stake.  This PBS share was determined nominally by the value of the land, plant and equipment, employees and goodwill, ABB contributed cash and specified technologies and assumed some of the debt of PBS.  The new company started operations on April 15, 1993.

            Business for the joint venture in its first two full years was good in most aspects.  Orders received in 1994, the first full year of the joint venture’s operation, were higher than ever in the history of PBS.  Orders received in 1995 were 2½ times those in 1994.  The company was profitable in 1995 and ahead of 1994s results with a rate of return on assets of 2.3 per cent and a rate of return on sales of 4.5 per cent.

            The 1995 results showed substantial progress towards meeting the joint venture’s strategic goals adopted in 1994 as part of a five year plan.  One of the goals was that exports should account for half of the total orders by 1999.  (Exports had accounted for more than a quarter of the PBS business before 1989, but most of this business disappeared when the Soviet Union Collapsed).  In 1995 exports increased as a share of total orders to 28 per cent, up from 16 per cent the year before.

            The external service business, organized and functioning as a separate business for the first time in 1995, did not meet expectations.  It accounted for five per cent of all orders and revenues in 1995, below the 10 per cent goal set for it.  The retrofitting business, which was expected to be a major part of the service business, was disappointing for ABB-PBS, partly because many other small companies began to provide this service in 1994, including some started by former PBS employees who took their knowledge of PBS-built power plants with them.  However, ABB-PBS managers hoped that as the company introduced new technologies, these former employees would gradually lose their ability to perform these services, and the retrofit and repair service business, would return to ABB-PBS.

            ABB-PBS dominated the Czech boiler business with 70 per cent of the Czech market in 1995, but managers expected this share to go down in the future as new domestic and foreign competitors emerged.  Furthermore, the west European boiler market was actually declining because environmental laws caused a surge of retrofitting to occur in the mid -1980 s, leaving less business in the 1990 s.  Accordingly ABB-PBS boiler orders were flat in 1995.

            Top managers at ABB-PBS regarded business results to date as respectable, but they were not satisfied with the company’s performance.  Cash flow was not as good as expected.  Cost reduction had to go further.  The more we succeed, the more we see our shortcomings” said one official.

Restructuring

            The first round of restructuring was largely completed in 1995, the last year of the three-year restructuring plan.  Plan logistics, information systems, and other physical capital improvements were in place.  The restricting included :

• Renovating and reconstructing workshops and engineering facilities.
• Achieving ISO 9001 for all four ABB-PBS divisions. (awarded in 1995)
• Transfer of technology from ABB (this was an ongoing project)
• Intallation of an information system.
• Management training, especially in total quality assurance and English language.
• Implementing a project management approach.

A notable achievement of importance of top management in 1995 was a 50 per cent increase in labour productivity, measured as value added per payroll crown.  However, in the future ABB-PBS expected its wage rates to go up faster than west European wage rates (Czech wages were increasing about 15 per cent per year) so it would be difficult to maintain the ABB-PBS unit cost advantage over west European unit cost.

The Technology Role for ABB-PBS

            The joint venture was expected from the beginning to play an important role in technology development for part of ABB’s power generation business worldwide.  PBS a.s. had engineering capability in coal – fired steam boilers, and that capability was expected to be especially useful to ABB as more countries became concerned about air quality.  (When asked if PBS really did have leading technology here, a boiler engineering manager remarked, “Of course we do.  We burn so much dirty coal in this country; we have to have better technology”)

            However, the envisioned technology leadership role for ABB-PBS had not been realized by mid – 1996.  Richard Kuba, the ABB-PBS managing director, realized the slowness with which the technology role was being fulfilled, and he offered his interpretation of events.

            “ABB did not promise to make the joint venture its steam technology leader. The main point we wanted to achieve in the joint venture agreement was for ABB-PBS to be recognized as a full-fledged company, not just a factory.  We were slowed down on our technology plans because we had a problem keeping our good, young engineers. The annual employee turnover rate for companies in the Czech Republic is 15 or 20 per cent, and the unemployment rate is zero.  Our engineers have many other good entrepreneurial opportunities.  Now we’ve begun to stabilize our engineering workforce.  The restructing helped.  We have better equipment and a cleaner and safer work environment.  We also had another problem which is a good problem to have.  The domestic power plant business turned out to be better than we expected, so just meeting the needs of our regular customers forced some postponement of new technology initiatives.”

            ABB-PBS had benefited technologically from its relationship with ABB.  One example was the development of a new steam turbine line.  This project was a cooperative effort among ABB-PBS and two other ABB companies, one in Sweden and one in Germany.  Nevertheless, technology transfer was not the most important early benefit of ABB relationship.  Rather, one of the most important gains was the opportunity to benchmark the joint venture’s performance against other established western ABB companies on variables such as productivity, inventory and receivables.

Questions:

1. Where does the joint venture meet the needs of both the partners? Where does it fall short? 
2. Why had ABB-PBS failed to realize its technology leadership?
3. What lessons one can draw from this incident for better management of technology transfers?

XIBMS – THE ABB PBS JOINT VENTURE IN OPERATION

XIBMS Institute

XIBMS Answer sheets, academic support

XIBMS assignment help, student assistance

XIBMS Institute solutions

Xavier mba answer sheets

Xibms mba case study answers

Xibms case study answers

Xavier emba answer sheets

Xavier emba case study papers

Xibms gms answer sheets

Xavier gms case study papers

Xavier advance diploma answer sheets

Xibms advance diploma case study answer sheets

Xibms dms case study answers

Xavier dms case study papers

At Global Study Solutions, we take immense pride in our ability to offer specialized support to students pursuing various programs at XIBMS Institute (Xavier Institute of Business Management Studies). Our dedicated team comprises experienced professionals who excel in crafting precise and well-researched solutions for assignments and case studies across different disciplines and courses.

Our commitment to aiding students in achieving academic success aligns perfectly with the educational standards upheld by XIBMS Institute (Xavier Institute of Business Management Studies). We understand the importance of delivering high-quality, customized solutions that meet the unique requirements of assignments and case studies within the institute\’s curriculum.

Whether in MBA, EMBA, GMS, DMS, or any other programs offered at XIBMS Institute (Xavier Institute of Business Management Studies), our team is equipped to provide expert guidance and meticulously crafted solutions. We prioritize accuracy, originality, and timely delivery, ensuring students receive the necessary assistance to excel academically.

We are dedicated to fostering an environment of academic excellence and providing dependable support to the esteemed students of XIBMS Institute (Xavier Institute of Business Management Studies).

XIBMS Answer Sheets

Customized Answer Solutions

MBA Assignment Solutions

EMBA Case Study Solutions

GMS Answer Sheets

DMS Assignment Help

Professional Writing Assistance

Tailored Academic Solutions

Specialized XIBMS Support

Academic Writing Services

Reliable XIBMS Assistance

Get expert assistance with your XIBMS Institute (Xavier Institute of Business Management Studies) assignments and answer sheets from our professional academic writing services.

Our team specializes in supporting students with XIBMS Institute (Xavier Institute of Business Management Studies) coursework, ensuring top-notch answer sheets and comprehensive solutions.

Ace, with our tailored assistance, your XIBMS Institute exams, offering precise guidance and accurate answer sheet preparation.

Seeking reliable help for your XIBMS Institute studies? Trust our academic writing services for meticulously crafted answer sheets and exceptional support.

Score high in your XIBMS Institute (Xavier Institute of Business Management Studies) assessments by availing our expert aid in preparing comprehensive and well-structured answer sheets.

 

XIBMS Project Report Writing Services

XAVIER Customized Project Reports

XIBMS Institute Project Support

XIBMS Professional Project Report Assistance

Quality Project Documentation

XIBMS Expert Project Report Writers

Comprehensive Project Analysis

Structured Project Report Services

XAVIER Detailed Project Documentation

XIBMS Project Evaluation Support

Custom Project Report Formats

XAVIER Project Research and Analysis

MBA/EMBA/GMS/DMS Project Reports

 

XIBMS Institute (Xavier Institute of Business Management Studies) assignments, solved papers, and study materials are available through our academic writing services.

Seeking assistance with XIBMS Institute coursework? Our professional team delivers accurate and timely solutions for all your academic needs.

Our specialized academic writing support simplifies access to XIBMS Institute (Xavier Institute of Business Management Studies) question papers and model answers.

Need expert guidance for your XIBMS Institute assessments? Our service offers comprehensive solutions for students seeking assistance.

Our academic writing services ensure precise and high-quality answers for XIBMS Institute assignments, aiding students in their educational journey.

 

Academic writing professionals play a crucial role in assisting students with their university assignments, striving to achieve several key goals:

Quality Assurance: Their primary aim is to deliver high-quality content that meets academic standards and fulfills the requirements of the university assignments. This involves thorough research, proper structuring, and adherence to guidelines provided by the educational institution.

Originality and Plagiarism-Free Content: Professionals in this field emphasize originality by creating authentic content free from plagiarism. To maintain academic integrity, they ensure that all information is appropriately cited and referenced.

Meeting Deadlines: Timely submission is a significant goal for academic writing professionals. They work within specified deadlines to provide students with completed assignments, enabling them to submit their work punctually.

Clear and Coherent Communication: Professionals strive to convey complex ideas in a clear, coherent, and academically appropriate manner. They focus on effective communication to ensure the content is easily understandable to the target audience.

Supporting Learning and Comprehension: Beyond completing assignments, academic writing professionals aim to support students\’ learning by providing explanations, analysis, and additional resources that help students grasp the subject matter more comprehensively.

Customization and Client Satisfaction: They tailor their services to individual student needs, providing personalized assistance and ensuring client satisfaction by addressing specific requirements and preferences.

Continuous Improvement: Academic writing professionals continuously update their knowledge base, research techniques, and writing skills to adapt to evolving academic standards and deliver the best possible support to students.