Ericsson's new organization
Ericsson is introducing a new organization which was approved by the Board of
Directors at its meeting today. This is one of the results of a comprehensive
review of Ericsson's business strategy, technology focus, organization and
management, which Sven-Christer Nilsson initiated upon assuming the position
of President and CEO this spring.
The new Corporate Executive Team has been appointed, and the change program
will start immediately. The new organization will be fully implemented as of
January 1, 1999.
The new organization will mean an increased focus on markets and customers.
Under the heads of three business segments profit responsibility is being
decentralized to smaller units, while decisions in certain strategic areas
will be taken by to the Corporate Executive Team. In addition to Sweden, the
Corporate Executive Team will be based in four different geographical areas.
The present organization has served Ericsson extremely well and has brought
the company to a leading position in the market. The new organization is
introduced in order to meet the dynamics of the market and the rapidly
changing environment in a way that will achieve continued strong growth and
continued good results.
Customer focus
To reflect these changes in the market place Ericsson's operations will be
divided into three business segments. These will serve different customer
categories. Each business segment will be headed by an Executive Vice
President, with consolidated profit and loss responsibility and who will be a
member of the Corporate Executive Team.
The three segments are:
Network Operators This segment will include operations for both wireless and
fixed solutions for data- and telecommunications. The current Mobile Systems
Business Area will account for the major share of this segment's operations,
complemented by operations from the current Infocom Systems Business Area.
Consumer Products Today's mobile phone operations will be the core of this
segment.
Enterprise Solutions This segment is focused on comprehensive solutions for
business communication requirements and will include operations from the
current Infocom Systems and Mobile Systems Business Areas.
The business segments consist of some 20 Business Units which in turn consist
of a number of Product Units, which will have a global responsibility for
developing and delivering products. Ericsson's operations in the area of
defense electronics, cables and components will continue as important
activities with unchanged mission and structure.
Four new corporate offices
In order to ensure a strong focus on customers and markets, customer
responsibility will be established at both the local and global levels. The
Corporate Executive Team will focus more sharply on markets and customers by
operating from four new corporate offices, besides Sweden. Establishing new
corporate offices will also enable Ericsson to ensure international
recruitment of corporate executives. The new offices will be established in
Europe, Africa and the Middle East; North America; Latin America; and Asia and
Oceania.
These new corporate offices will be managed by an Executive Vice President,
who will be a member of the Corporate Executive Team. This person will be
responsible for customers and for optimizing resources within the geographical
market area.
Parts of corporate management will be relocated from Stockholm to the new
corporate offices. Details regarding the scope and exact locations for these
changes will be made available at a later date.
The corporate office for Europe, Africa and the Middle East will be located in
London. Other parts of the corporate management such as finance will
eventually be located in the London office facility. The London office will in
this way assume a growing role for the corporate management as a whole. The
president and CEO will therefore have an office in London in addition to
Stockholm.
The objective of the division into geographical market areas is to ensure that
operations are conducted quickly, with optimal utilization of resources and
focus on customers.
Corporate management strengthened
The new Corporate Executive Team will include members located close to
important customers and markets. In addition to the three managers responsible
for the business segments and the four managers responsible for the
geographical market areas, there will be managers for each of the following
six Corporate Functions:
Finance
Technology
Supply
Marketing and Strategic Business Development
Human Resources
Information
The new organization will mean a strengthening coordinating role of Corporate
Functions. As part of a strengthening of corporate management, Ericsson is
implementing a cohesive research strategy headed by the Senior Vice President
Technology. Another Corporate Function will have responsibility for the entire
supply chain and be headed by a Senior Vice President Supply. The intention is
to utilize resources more efficiently within Ericsson by applying a unified
strategy.
A new Corporate Function, Marketing, will be responsible for global marketing,
brand management, business development and market coordination.
Coordination of Business and Market Units
The new organization is based on business segments consisting of Business
Units and on geographical market areas consisting of Market Units. Both
dimensions will work close to the customer. In the simplest case, this can be
regarded as a product specialist and a customer representative working side by
side. The Market Units will be locally responsible for customer relations,
marketing and sales. In most cases they will be the same as Ericsson's local
companies.
Financial reporting
With the introduction of the new organization, Ericsson will change its
financial reporting. Annual operating results for each business segment will
be published beginning with pro forma for 1998.
New Corporate Management
President and CEO, Sven-Christer Nilsson
Senior Executive Vice President, Finance, CFO, CW Ros
Executive Vice President, Consumer Products, Johan Siberg
Executive Vice President, Network Operators, Mats Dahlin
Executive Vice President, Enterprise Solutions, Haijo Pietersma
Executive Vice President, Europe, Africa and Middle East, Jan Wäreby
Executive Vice President, North America, Bo Dimert
Executive Vice President, Latin America, Bengt Forssberg
Executive Vice President, Asia and Oceania, Kurt Hellström
Senior Vice President, Technology, Jan Uddenfeldt
Senior Vice President, Supply, Björn Boström
Senior Vice President Marketing, and Strategic Business Development
Torbjörn Nilsson
Senior Vice President, Human Resources, Britt Reigo
Senior Vice President, Information, Lars A. Stålberg
Curriculum Vitae for the Members of the Corporate Executive Team will be
available at: ericsson.se
Press conference
On October 12 at 10:00 a.m., Ericsson will hold a press conference at
Telefonvägen 30 in Stockholm at which the company's strategy, as well as
additional results of the strategic and organizational review conducted over
the past six months, will be presented.
For those who are not able to attend, it will be possible to follow the press
conference via webcasting.
Ericsson's 100,000 employees are active in more than 130 countries. Their
combined expertise in fixed and mobile networks, mobile phones and infocom
systems makes Ericsson a world-leading supplier in telecommunications.
FOR FURTHER INFORMATION, PLEASE CONTACT
Lars A. Stålberg, Senior Vice President, Corporate Relations
Phone: +46 8 719 31 62, +46 70 555 60 66
E-mail: lars.stalberg@lme.ericsson.se
Pia Gideon, Manager External Relations
Phone: +46 8 719 28 64, +46 70 519 28 64
E-mail: pia.gideon@lme.ericsson.se
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