Abbott Laboratories - Divisional Structure

Divisional Structure

The company first split into three main divisions based on their products: pharmaceuticals, hospital products and nutritional products (Ranjan). This Product Division Structure worked well for their Chicago headquarters, but when international expansion began in Montreal, Canada, in 1931, Abbott adopted an International Division Structure (Abbott Fact Book). Under this organization, Abbott’s international division was responsible for all the foreign operations. Each international office reports to the international management division in Chicago. A problem that has arisen with this structure is that the separation between domestic and foreign divisions does not allow for much communication between the sections, which created more of a disconnect within the company (Ranjan).

Another division was added in 1973, called the diagnostics division, which manages all the diagnostics business on a global scale, separate from the international division (Corporate). These two divisions act almost as separate companies, which also causes a disconnect when Abbott is trying to cultivate and establish relations with customers. As a result of this organization, the company is not represented as a coherent single entity worldwide. Therefore, Abbott is currently considering a Worldwide Product Divisional Structure (Ranjan). Abbott Laboratories has also had to deal with restructuring their management system after each acquisitions. In 2010, Abbott acquired Solvay SA's pharmaceutical unit (Press). However, Abbott has had to cut jobs to minimize the costs caused by areas of overlap with Solvay (Reuters).