The paper "Critical Analysis of ALSTOM" is an outstanding example of a management assignment. ALSTOM Power Service was founded in 1999 as an autonomous unit to run the service business of the ALSTOM group, Paris. The aim was independently to develop and market the company's service activities for the installed power generation capacity. The new organization instantly had more than 10,000 employees worldwide in local units. The managers and employees had previously been assigned to different power generation units, thus merely knowing each other. More importantly, the management faced partly disillusioned employees.
Service engineers had been perceived as the low end of the engineering profession. The people perceived their jobs as being only a tedious add-on to the exciting business for new power plants. In 2004, ALSTOM Power Service headquartered in Baden, Switzerland, was a leading global provider of service for power plants worldwide. ALSTOM Power Service covered a whole variety of service products such as repair and spare parts activities, maintenance and full plant operation, and plant efficiency improvement. The management team had created a successful global business in a series of changes.
The organization grew from 10,000 to 13,500 permanent employees in 45 countries. It achieved growth in sales from € 2,500 million in the fiscal year 1999/2000 to € 3,300 million in 2003/2004 representing a market share of 13% in 2003- In the same period, the operating income doubled from € 200 million in 1999/2000 to over € 400 million in 2003/2004. The management team had succeeded in changing the employees' mindset from a low energy level workforce to a mutually shared understanding of how to do service business at ALSTOM.
A first step towards the Service Identity was, they created clear business accountability in nearly every unit for the first time. The autonomy and recognition they received for the first time triggered motivation and engagement. Then in late 2001, acknowledging that structural means we're only a first step for success as a new Service Sector, the management implemented a global process to strengthen the shared values to realize a strong service orientation in the decentralized activities.
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