Smashing the Cube:

Corporate Transformation
at CibA-Geigy Ltd
Diksha Mahajan
Nidhi Kumar
Pranati Goswami
Shweta Agrawal
Pallavi Mishra
Varun Dave

14P077
14P091
14P092
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14P112
14P118

Introduction

Founded as Geigy chemical corporation in 1758 by

Johann Rudolf

CIBA an organic chemical company, was formed a

century later

CIBA and Geigy merger in 1970

Operated in healthcare, agriculture and Industrial

Switzerlands top drug and chemical company

Businesses in healthcare, agriculture and industrial

sectors

HQ in Basle, Switzerland

88000 employees

Ciba Geigy: 1970s

Three dimensional organisation called CUBE
Function
Geography
Business

Every major issue was reviewed with all the

three perspectives of the CUBE
Highly bureaucratic organization
Distinction in cost structures and inter
divisional interference
Oil prices in 1979 led to downturn in finances

SMASHING THE CUBE

Core team Vision 2000
Think tank which comprised younger
members of middle and upper management
To tap the energies of unorthodox and
creative people in the company
WE MUST BE SEEN TO WALK AS WE TALK.
Series of measures along portfolio and
business strategies organization and systems
and people leadership

Changing times
Regulatory government policies in Switzerland
forced Ciba Geigy to focus in other geographies
Financial performances went down
The Need to reduce bureaucracy
Needed to assume credibility through
decentralization

BUSINESS STRATEGY
Reshaping of the groups portfolio in

order to focus on Biology and Chemistry

End of Cibas diversification into Physics
Acquiring 50% share of a medical

diagnostics company
Strategic planning based on identification

of 5 categories of businesses

Organizations Philosophy
Abolition of THE CUBE
Three dimensional matrix reduced to oneand-half
Main dimension was Global divisions
Secondary dimension was Geography
Focus on customer orientation, innovation
and quality
Formation of corporate units - the centre of
competence along with the centralized CSUs

Leadership Philosophy

Ciba-Geigy developed its own philosophy empowerment

directed autonomy

Empowerment = Direction x Authority x Support

But, middle level managers found difficult to get out of old
bureaucratic thinking

To infuse entrepreneurial spirit in employees, promotion and pay

system revamped

Career advancement & compensation link closely to

responsibilities and performance

Abolition of hierarchical titles

Problems Faced

Difficulty in allocating manufacturing functions to

divisions

No standardization

Employees too focused in incentives

Middle managers felt alienated

Increase in the number of charge-out items

Global divisions became too much involved in lower

divisions inhibiting cross divisional transfers

Difficult to transfer employees across functions

Reports generated by corporate finance units lacked
details

Restructuring Group View

More need to customize according to local needs
Cross divisional functional committees to discuss
on downsizing and manage a revised budget
Profit performance became the role and
responsibility
Need to integrate global decisions and local
units

Restructuring KL View
KL reviewed requests for capital expenditures
Final decision making authority vested in the
committee chairman
AT lower levels decision making delegated
outside the KL