Abbott Laboratories: company overview and business operations

Abbott Laboratories: Solutions, Monitoring, And Timing of Reforms

Abbott Laboratories is a classical 'matrix'-type organization. This is well-suited to the diverse functions and geographical 'spread' of the company. However, there are problems with a matrix structure, most notably a fuzzy sense of overall leadership (McShane 2010). In the case of Abbott, conflicts between the President and Board of Directors have been common, further contributing to this lack of focus. The CEO has often abused his power, taking advantage of the Board. It is essential that the Board make periodic assessments of the CEO and obtain confidential feedback from the CEO's subordinates. These new standard operating procedures for the organization should be implemented immediately. To regularly monitor the CEO, the Board of Directors should perform a comprehensive, fair, and timely leadership / management assessments of the CEO. A survey should used regularly, at least on an annual basis, to gather feedback from subordinates.

The second problem faced by Abbott Laboratories is the challenge posed by its reliance upon work teams. On one hand, the use of work teams can have many benefits. However, much like the competing interests of the CEO, teams may forge strong personal loyalties that thwart the team's focus on larger organizational goals. This competition seems 'hard wired' into the organizational design. For example, the internal engineering staff supports projects for the two major units, the Pharmaceutical Products Division and the Abbott Diagnostics Division. Naturally, the two divisions fight for the 'top' persons and research spaces, rather than consider how their work and their decisions will benefit the organization as a whole. Theoretically, this competition is supposed to spur the teams on to higher levels of productivity, although in reality it often merely leads to back-biting.

Over the next year, this internal competition must be phased-out of Abbott. Instead, each project must have a written long and short-term goal designed to serve the company, to ensure that all teams serve the larger organization, instead of their own interests alone. Team projects within a matrix-style organization also tend to be much more cumbersome and time-consuming than other types of more linear and hierarchical entities. Having regular meetings that require workers to submit feedback increases accountability and will improve their sense of time management (Adkins 2006). Instituting these types of performance reviews, including individual performance reviews will fundamentally shift Abbott to a culture where serving the organization is the main focus. Rotating team members will enhance the skill sets of workers and encourage them to more holistically appreciate the needs of the organization, and the strengths of other teams.

A third, interrelated problem that must be addressed is the fact that the time-consuming nature of team projects is structured into Abbott's current planning mechanisms. The cycle-time of a project is five months. Abbott must set a higher 'benchmark' for all workers to improve this figure. When dealing with project completion, time is money, and Abbott's expectation of a relatively long project lifecycle is apt to cause 'scope creep' in which the project timetable stretches out infinitely long. As well as setting shorter-term benchmarks and forcing team leaders to explicitly justify a longer cycle, Abbot must also force all projects to include periodic short-term goals, to ensure that the failure to meet one early, mission-critical deadline does not lead to project delays later on in the process. Shortening project time is likely to be an ongoing mission, although setting improved benchmarks and short-term goals can be instituted immediately.

A fourth problem is that of frequent task confusion. In a matrix-type structure, employees frequently have to deal with task confusion because their project is beholden to more than one boss (Preston 2004). With a complicated project, different bosses may have authority over different parts of the component. Employees are uncertain as to what to prioritize, which leads to delays, and also a fuzzy sense of leadership. Once again, employees are likely to feel loyalty to their teams rather than to the larger entity.