Introductory Statement I Team two has collaborated together to provide a detailed case analysis of Kent Chemical, an imaginary company, created by Harvard Business School. The members of the group include Catherine Alvarez, Shelley Corp, Sieata Duhart, and Nakia Shipp. Team 2 Nakia Shipp » The Fisher family founded Kent Chemical in 1917 as a rubber producer. Today they are one of the largest producers in lubricants, polymers, fire retardants, and medial equipment. In the 1940’s, Kent diversified into plastics and expanding it’s enterprise even further into a global sphere. With all of their expansions and development into many different products, they became the largest global specialty company in 2000. Oversea operations grew with more stresses, and the subsidiaries felt that management was out of touch and out of control. With this global disconnect, Luis Morales stepped in as head of the international division and worked towards creating a unity between these divisions. Team 2 Nakia Shipp » After 22 years of working for Kent Chemicals, Luis Morales stepped in as the head of the international division and president. With the 2006 reorganization, Ben Fisher became Kent’s board chairman. Peter Fisher was named vice chair, and Angela Perri was named the President of the U.S. division. The Fishers are from the founding family of Kent Chemicals and the family still owns ten percent of the company. Part of Morales new tasks was to collaborate to create an unified agreement between the different global divisions. He did this by appointing three global business directors (GBDs). The first GBD was head of KCP’s consumer products. The second GBD was head of fire protection. The last GBD was assigned to the medical division of Kent Chemicals. Team 2 Nakia Shipp The Vision of Kent Chemical Kent Chemicals vision is to be the most profitable and respected science-driven chemical company internationally and several places around the world in order to provide sustainable solutions to its customers. It is through these initiatives that Kent Chemical is working to help achieve its corporate vision in being the most profitable and respected sciencedriven chemical company in various parts of the world for its stakeholders and customers. Mission The Kent Company is a world leading chemical company in specialty lubricants, polymer additives, electronics, and medical products. These products are applied as raw materials in consumer, fire protection and medical plastics products. In order to be an attractive partner to the corporation’s stakeholders, customers, suppliers, and employees Kent Chemicals operate in a prolonged, inventive elevated way. Furthermore, the Kent Chemical Company, strives to continually adapt and meet market challenges as well as offering the best performing products manufactured internationally and domestically in a reasonable and containable comportment. Kent Chemicals desires to transform formulated ideas into real innovative world class practices by using R&D resources that aid with everyday uses that improves the quality of our everyday lives and cultural lifestyle. Team 2 Sieata Duhart Kent Chemical accepts the accountability, of a high-performance culture, by holding itself to high standards and Kent uses the same discipline to manage their individual performance by refocusing on their international business and operating processes that include integrity, and respect for the people that is serve by the use of their individual product lines. Kent Core Values are: Integrity, Teamwork, Performance, and Learning. The keys to success are three priorities that should guide decision-making in Kent Chemicals: Deliver Value, Be Cost Efficient, Resource Efficiently. Team 2 Sieata Duhart Internal Strengths • • • • • • • • • • • • • • • Kent research laboratory to drive product development: Scientific expertise to develop products Central R&D input High-margin niche household applications (consumer products such as grease-be-gone, oven, barbeque, stainless steel cleaners, drain openers, rust removers) Leading supplier of plastics for medical applications and continued to develop surgical instruments, implantable devices to replaceable joints Wide range of products Sold products in almost 100 countries 2007 Revenues $2.2 billion Technological capability to develop new products through R & D Continuous strategic growth Tailored approach to strategy different approach to local demands Competition that varies by country Imposed uniform universal solutions on strategically diverse portfolio As of recently, Kent was able to get them to stop exporting into each other’s markets Regional staff lacked the market knowledge and detailed technical expertise Korean subsidiary challenged German subsidiary for fire retardants Dedicated long term employees Angela Peri over 20 years of service named President of U.S business Luis Morales 22 year veteran before named to head of international division Consumer products GBD 25 year Kent veteran Team 2 Catherine Alavarez Internal Weaknesses Unhealthy culture •Kent consumer products GBD said, “I don’t care if they see my role as adversary or directive, as long as they do what needs to be done.” The right leader appointed for the job? •Project appropriation request blocked by corporate to bring receivables under control •Coordinating issues with global implications ex. Brazilian subsidiary unilaterally price reducing Ineffective communication •Communication either at top levels or front lines •Communication slow and reluctantly •Corporate reporting systems inefficient ex. SicherFeuer manager stated the best way to get technical help and learn about new products was to travel to Kent every 60 days Break down in leadership •Nobody coordinating price, product, sourcing decisions globally •Regional directors did not have the authority to make necessary decisions Ineffective teams •Not establishing control was difficult. Long term managers of 20 to 30 years ran circles around them adapting well to overseas pressures and demands • Staff second guessed local country managers •Country managers complained that U.S. colleagues were more critical and less collaborative Operations overlapping •Duplicate operations and overlapping activities with overseas operations •International division regional rather than product-based structure Team 2 Catherine Alvarez External Strengths External Weaknesses • • Government funded research for the fire control market Developed and won the U.S Food and Drug Administration approval to hold intravenous solutions Relationships with national regulatory bodies and control agencies • • • • Customers included large global hospital supply and medical device companies Team 2 Catherine Alavarez • Regulatory requirements vary across countries Fire protection regulations vary by country and products have to be adapted by country FireGard in England and SicherFeuer AG in Germany Language and cultural barriers GBD’s did not know their role and regional directors were not clear how to work with them GBD’s lacked credibility and power to get things done Long competitive histories and even after minority positions the companies refused to cooperate or coordinate activities Local managers protected their own selfinterest External Internal • Competition for power over acquired companies that used to be minority investors Conflicts of interest between local and regional managers and domestic managers Complex strategies for three different types of businesses: consumer products line, medical plastics line, and the fire control products Two unsuccessful organizational changes under CEO Ben Fisher and now attempting a third one Management appointments for GBD that did not work out • Team 2 Catherine Alavarez Competitors with new technology • Biodegradable and bioavailable plastics for environmentally friendly products Government regulations • Codes and standards that could affect plastics, consumer products, and fire protection What is the Primary Issue/Opportunity in this Case Study? The primary issue in this case study is the fact that the executive leadership is lacking in the most basic areas that inhibit it’s growth within an industry. They have ineffective teams, an unhealthy corporate culture, a lack of effective communication, immense language and cultural barriers, and their operations are overlapping. How should the organization respond to the issue/opportunity? See the next slides for the strategy that needs to be addressed and implemented in order to allow for growth of the company both domestically and internationally. How can the organization implement and evaluate the chosen strategy? In the next set of slides we will review the implementation strategies for each goal and objective. The evaluation of the chosen strategies will be ongoing thru corporate scorecards that will include objective information i.e.; market share, deliverables etc as well as employee/stakeholders satisfaction and environmental surveys. Team 2 Shelley Corp Promote a healthy working culture/environment •Foster an environment of trust •Promote a willingness to tolerate and learn from mistakes throughout entire organization •Pursue collaboration, integration and holistic thinking •Allow freedom for risk taking (within limits) •Nurture an environment of accountability Enhance effective communication throughout the corporation •Foster traits of effective communication-consistent, constant and from the top down. •Reach out to resisters to understand their concerns and address them •Pro-active communication-develop a weekly/daily company update electronically to track and disseminate information to the masses. •Frequent engagement with executive leadership team thru memos, updates etc •Detail growth plan with teams and solicit feedback, participation and differing points of view •Utilize technology for meeting across the organization-skype, webinars etc. Build transformational leadership team •Implement new organizational chart •Composition of top management team is of UTMOST importance •Empower manager and employees •Identify key internal and external stakeholders and Informal leaders •Provide mentoring to new recruits •Recruit top talent from University of Kent •Ensure entire team is aligned with Morales’s strategies and plans Team 2 Shelley Corp Develop effective teams •Pick the right leader for the right position •Look for people whose interests are aligned with the overall strategy •Develop teams ability to form positive relationships with internal and external stakeholders i.e. National regulatory bodies and licensing agencies. •Ensure relevant expertise is held by each member of the team •Include people with sufficient credibility so that employees and management will treat decisions seriously. •Enlist the support and involvement of KEY people. Streamline operational factors •Develop an overseas supply and value chain manager to coordinate and account for products across the system. •Encourage collaboration across the system to prevent internal competition for growth in markets. •Prevent duplication of services Recommend culturally sensitive educational programs for staff •Promote understanding of multicultural issues and their effect on the success of the corporation. •Breakdown language/cultural/communication barriers thru sensitivity training. Differentiate the organization •Increase robustness of R & D to develop new products and technologies. •Define core decisions business by business-may have to utilize different approaches to local demands •Focus on customer needs •Broaden consumer products-high margin niche household application •Enhance relationships with large global hospital supply and medical device companies •Benchmark standards to competitors Team 2 Shelley Corp De Kluyver, C. (2010). 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