TRW's balancing act

Abstract

In many ways TRW is the prototypical modern U.S. multinational. The exceptional difference is that in recent years it has wrestled with the problems of managing scale and complexity more energetically and perhaps more imaginatively than most conglomerates. Building on the bedrock of classic decentralized management—the same stuff that General Electric pioneered in the Fifties, now the standard operating structure of most U.S. multinationals—TRW has tried desperately to modify some of the increasingly apparent shortcomings of decentralization. While acknowledging that most key decisions bearing on a particular business must be made by autonomous managers using their best judgment, TRW has sought not to be a holding company operation, where management is essentially passive, but rather to bestow broad direction and strategic vision from headquarters. The architect of this program is TRW chairman Ruben Mettler. One of his key lieutenants in this effort is Edward M. Foley, vice president of planning and development. When ex‐accountant Ted Foley arrived at TRW's Cleveland headquarters in the early Seventies, after a succession of operating roles within TRW, company planning was 100 percent decentralized. His mission: to improve the “balance” (perhaps Mettler's favorite word) between divisional independence and top management's perceptions of where future challenges and opportunities lay. TRW was seeking evolutionary change without tampering with their basically decentralized corporate culture. It was an ambitious program with many pitfalls and inherent contradictions. And the struggle for “balance” isn't over yet, as Ted Foley candidly reveals in the following interview with Planning Review.

Citation

Thackray, J. (1983), "TRW's balancing act", Planning Review, Vol. 11 No. 6, pp. 8-44. https://doi.org/10.1108/eb054036