Re-engineering through Fractal Structures

Many industries in Europe have had to recognize that their lead in world markets has begun to diminish due to global competition, particularly from Asian competitors. In many cases a deficit of up to 30% in cost and productivity already exists due to this new competition. The reasons are rigid, Tayloristic company structures; the companies are not in a position to react flexibly to constantly changing environmental conditions. This paper illustrates the methods of the "fractal company" being used by many industries to solve their structural crisis. The fractal company distinguishes itself through its dynamics and its vitality, as well as through its independent ability to react to the changing circumstances. The developed methods, procedures and basic conditions such as company structuring, human networking, hierarchy formation and models for remuneration and working times are explained. These explanations are based on practical examples from Fraunhofer Institute's work with the automo bile industry and their suppliers, as well as with the engineering industry