The Problems Facing Luis Morales
Kent’s international strategy was a good opportunity for business growth. However, several problems affected Luis Morales as he began implementing this new expansion strategy. The competitive histories of “different offshore entities complicated the firm’s entrepreneurial strategy” (Bartlett & Winig, 2012, p. 3). The existence of duplicative and overlapping activities continued to affect Kent’s subsidiaries. The issue of capital allocation also affected Luis’s goals. Many managers in different countries seemed to protect their expectations and self-interests.
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According to Bartlett and Winig (2012, p. 4), “parochial attitudes blocked the process of technology transfer after the introduction of more formal relationships”. Frustrations “also existed about links between product and geographic organizations” (Bartlett & Winig, 2012, p. 3). Every regional manager was also unable to coordinate most of the targeted issues. This situation “made it impossible for the company to coordinate sourcing, product, marketing, and price decisions globally” (Bartlett & Winig, 2012, p. 3). These problems made it impossible for Luis Morales to implement the anticipated international strategy.
The Organizational Changes Luis Morales Made in Response to the Above Problems
In 2006, Luis Morales believed that Kent Chemical was not on the right path. The company’s CEO decided to appoint new directors to support the targeted goals. Angela Perri became “the president of every U.S. business” (Bartlett & Winig, 2012, p. 5). Peter Fisher was appointed to monitor different international operations. This reorganization led to the creation of Kent Chemical International (KCI). Morales also responded with more strategies to make Kent a successful company. He appointed three Global Business Directors (GBDs). These three directors had succeeded in different American companies. Each GBD team was comprised of 3-6 project managers. These managers had unique priorities and roles.
Morales identified three GBD positions. The consumer-products GDP “was expected to promote the best business practices in every overseas subsidiary” (Bartlett & Winig, 2012, p. 5). The “second GBD was in charge of fire protection products” (Bartlett & Winig, 2012, p. 5). The third GBD was “assigned to medical plastics” (Bartlett & Winig, 2012, p. 5). However, these GBDs faltered within a few months. These “GBDs were unable to provide the best link to the domestic product divisions” (Bartlett & Winig, 2012, p. 6). New conflicts emerged because things were not working effectively. This fact explains why new ideas were required to address the major challenges affecting the company.
The True Value of the Sterling Partners Consulting Services
The suggestions provided by Sterling Partners were meaningful towards the success of Kent Chemical. The consultants provided meaning ideas that could transform the future of the company. According to the consultants, the company was using a uniform solution to address every geographical problem. The firm was operating in complex markets with diverse needs (Bartlett & Winig, 2012). The consultants highlighted the major issues affecting the company’s performance in the global market. It was appropriate for Kent Chemical to use effective marketing programs. This strategy would address the changing needs of different consumers.
The firm was also focusing on the wrong priorities. The case study indicates that the “medical products business (MPB) was not focusing on the expectations of different consumers” (Bartlett & Winig, 2012, p. 8). The fire prevention industry was characterized by many regulations. Kent Chemical was not addressing the needs of its global customers. The consultants identified the major challenges affecting the success of the above GBDs. These challenges continued to make it impossible for the firm to achieve its potentials.
What Morales Should Recommend
Luis Morales should consider several issues to make the firm successful. The GBD concept was no longer producing the best outcomes. Many regional and local managers were against the ideas implemented by these American-based GBDs. That being the case, it would be appropriate for Morales to empower different domestic managers. These managers should be able to address and understand the real issues affecting every consumer (Kessler & Kates, 2010). These individuals should also analyze the major regional challenges affecting the company. The managers should have a clear understanding of the local needs of different customers. A simple organizational structure is also required to address the global challenges affecting the firm. Morales should also “use locally-adapted marketing programs to achieve the best objectives” (Bartlett & Winig, 2012, p. 7). This approach is critical because the needs of many consumers vary from one country to another.
What Ben Fisher Should Decide
Ben Fisher should make the best decisions to support the company. According to this case study, Kent’s future relies mostly on its ability to expand into different global markets. That being the case, a powerful organizational solution is required to support Kent’s global presence. The decision to empower different regional managers will support the changing expectations of many customers. A tailored organizational structure will ensure the company addresses the local demands of its global consumers (Kessler & Kates, 2010). The chairman should also empower every regional manager. Fisher should minimize the level of hierarchies. These approaches will ensure Kent Chemical achieves its business goals.
Bartlett, C., & Winig, L. (2012). Kent Chemical: Organizing for International Growth. Harvard Business School, 1(1), 1-11.
Kessler, G., & Kates, A. (2010). Leading Change Design: How to Make Organizational Design Decisions to Drive Results You Want. New York, NY: Wiley.