Kent Chemical: Organizing for International Growth
Download
Report
Transcript Kent Chemical: Organizing for International Growth
Kent Chemical: Organizing
for International Growth
1
TEAM 1
LDR 660 WI-II 2013
BETHANY HALL, CASSIE BEZEAU,
VICKIE DELANEY
Delaney
Company Overview
2
History: Established in 1917 as a rubber producer
During 1940s expanded into plastics to become one of the
largest producers and marketers of plastic additives and other
specialty chemicals
Opened research lab in 1953
Locations:
Holds minority & majority stakes in more than 2 dozen
businesses
4200 employees (1200 offshore)
30 manufacturing facilities in 13 countries
Sells products in almost 100 countries
6 business divisions (3 with significant international sales)
Bezeau, Delaney
Company Overview
3
Products:
Grease-B-Gone: 1966-leading de-greaser in U.S.
Fire Protection Products: 1950s-fire retardants for electronics,
building, and transport industries
Medical plastics:1960s-containers, IV bags, surgical
instruments, etc
Customers: Construction, electronics, medical, and
consumer industries
Bezeau, Delaney & Hall
Kent Chemical Organizational Chart 2006
Additionally- World Boards function to help plan, review and
communicate but not to manage.
Delaney
4
Financial Snapshot
5
Net Income
($millions)
180
1800
160
1600
140
1400
120
1200
100
1000
80
800
60
600
40
400
20
200
0
0
2004 2005 2006 2007
Bezeau
Costs
($ millions)
Cost of
Sales
SG&A
R&D
2004 2005 2006 2007
What are the issues/ problems?
6
What do we want to do?
Need to fix the strained relationships between the US and international
offices/plants. Issues between science division and international markets.
Nobody is coordinating price, product, or sourcing decisions globally.
No communication from the top-down, or between global locations
Leadership is not asking the right people for input
Domestic growth has reached a plateau so international markets need to grow.
Sales have not fallen, but net income has. Cost cutting measures?
Where do we want to go and why?
Communication- needs improvement, international office need more autonomy
Need to cut costs, increase income, coordinate pricing
Domestic products, growth need to be re-evaluated
Do SWOT evaluation to determine what we have
Bezeau, Delaney & Hall
Previous Solutions Attempted
7
2 attempts at reorganizations
2006 appointed Global Business Directors (GBD)
Responsible for 3 lines of business in KCI: Consumer Products
Division, Fire Protection Products, Medical Plastics
Assembled staff of 3-6 product/project managers
New roles were not well defined
2007 adopted World Boards
Composed of domestic and international managers
Included people with geographic, product, & functional
expertise
Responsible for developing strategies for global business
Bezeau
Strengths
Internal and External
8
Internal
External
Strong R&D
Global presence
Implemented expansion
over time
Have made valuable
patented products
Fast growing
international operations
Large growth from 11% to
27% of revenue
Strong leaders: Morales
and Perri
Morales- created
communication that worked
until growth
Bezeau, Delaney & Hall
Weaknesses
Internal and External
9
Internal
External
Entrepreneurial
Weak economy- globally
Independence:
Subsidiaries compete with one
another, they export into each
other’s markets instead of
working together to compete
No trust between countriesquestion what each is doing
Poor communication
No collaboration between
countries, or between leaders
and staff
No communication about the
direction the company wants to
go
Bezeau, Delaney & Hall
and expected to shift
downward
Not adapting to changing
pressures and demands
Opportunities
Internal and External
10
Internal
External
Empower employees
Grow client base
Look for new
opportunities
Growth in medical
industry-currently
accounts for 35% of global
revenue
Change culture to give
employees more
input(Schein, 2010)
Include employees in
meetings and
decisions(Dubrin, 2010)
Reduction in production
costs
Cut un-necessary practices
Duplication of processesconsolidate
Bezeau, Delaney & Hall
Threats
Internal and External
11
Internal
External
Breakdown in overall
Intense price competition
Fire protection products
Need to decrease production
costs
Global recession predicted
Already KCPs net income has
seen a dramatic decrease from
2006 to 2007 and worse was
projected for 2008
#3 competitor in world
corporate strategy
Lack of strong leadership
Lack of direction
Lack of communication
Lack of current mission,
vision, values
wide fire retardants
Bezeau, Delaney & Hall
Pressure from global and local
companies
Final plan and why we picked it
12
Org chart-(see next slide)
Simplify leadership
Define Leadership roles
Eliminate GBDs
Put leaders in non-US locations
Concentrate on better communication
Planning session including key people from all departments and all countries to determine
important issues and solutions
IT department upgrades: improve channels for improved communication, e-mail, online meetings,
Skype, etc.
Monthly meetings: these meeting should include managers from all regions to keep lines of
communication open
Cost reduction
Halt duplication of processes in multiple countries
Semi-globalization
Decentralize functions including pricing, marketing, product aesthetics
Centralize functions that can be standardized (i.e. accounting)
Growth
International markets – medical plastics division
Bezeau, Delaney & Hall
Bezeau.
13
Dunning, J. & Hedlund,G.(1993)
How it will be implemented
14
Buy-in from the employees is key to success.
A planning session would solicit input from people in different
departments as well as different countries
Be consistent with behaviors and messages and have open
communication (Harvard Business School, 2005)
Regional Directors are to be relocated to their respective
country instead of managing from Kent, OH
Up grade IT structure
Use of consultants to facilitate monthly meetings
Focus on communication
Focus on international growth
Bezeau, Delaney & Hall
How can the company evaluate the strategy?
15
Constant communication among top level and
middle level management to determine progress
Market response: if functions like pricing and
marketing are decentralized, was there an increase in
the respective markets
Costs: company should see decrease in costs due to
improvements of efficiency and centralizing specific
functions
Bezeau, Delaney & Hall
References
16
Dubrin, A. (2010). Leadership: research findings, practice and skills. Mason, OH:
Cengage Learning.
Dunning, J. & Hedlund, G. (1993). Organization of transnational
corporations. New
York, NY: Routledge. Retrieved from:
http://books.google.com/books?hl=en&lr=&id=hbSzv5HVYLoC&
oi=fnd&pg=PA69&dq=organizational+chart+of+international+c
ompany&ots=FnDg91meCr&sig=i9llNFHrw5Bgx9E9v4Rw2DqX9
D0#v=onepage&q=organizational%20chart%20of%20internatio
nal%20company&f=false
Harvard Business Press. (2005). The people side of implementation.
Strategy:
Create and Implement the Best Strategy for
Your Business, p. 12.
Boston, MA: Harvard Business School Press.
Bezeau, Delaney & Hall
References
17
Kuyvenhoven, R. & Buss, W. (nd). A normative view of the role of middle
manaagement in the implementation of strategic change. Journal of
Management and Marketing Research. Retrieved from
http://www.aabri.com/manuscripts/11809.pdf
Lafley,A.G., Martin,R.L., Rivkin, J.W., & Siggelow, N.(2012 September). Bringing
science to the art of strategy. Harvard
Business Review. Retrieved from:
http://sienaonline.org/re
Massood, N. & Benson, H. (2005). Organizational change management and global sourcing- a
winning combination. Retrieved from: http://www.infosys.com/global-sourcing/whitepapers/Documents/OCM.pdf
Wheelen, T.L. & Hunger, J.D. (2009). Basic concepts of strategic management. Powerpoint.
Prentice Hall, Inc. Retrieved from: http://sienaonline.org/re
Worth, Steven. (2003). International growth: A look at four options. Executive Update.
Retrieved from:
http://www.asaecenter.org/Resources/EUArticle.cfm?ItemNumber=117
79
Bezeau, Delaney & Hall