Kent Chemical: Organizing for International

Growth
GROUP 3 – MANJULA, MISHAL, ZIYAD, NIKHIL, RENIL,
AJAY

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Question 1:

1. Why did the GBD concept not work? Was it not implemented well?
 
KCP was reorganized so as to improve domestic/international relations
International division became Kent Chemical International (KCI), a separate legal entity structured as a subsidiary
of KCP
3 Global Business Directors (GBD) were appointed for consumer-products, fire protection products and medical
plastics .
Understanding of the new role by GBD:
 Consumer-products: Enhance consumer-oriented thinking into our overseas subsidiaries.
 Fire protection products : Assume worldwide technology control and marketing responsibility
 Medical plastics: Role as a strategic planner linking the U.S., regional, and subsidiary managers.
Result:
 The medical-plastics GBD was appreciated because she provided useful worldwide business coordination.
 Consumer-products GBD failed since he interfered in local issues where he had neither experience nor
understanding

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Reason for Failure:
 GBDs’ inability to provide a link to the domestic product divisions and assume the conflict-resolution roles
effectively.
 The subsidiaries saw GBDs as interlopers. The new structure strained the existing organization’s time and resources.
 GBD did not clearly understood how to integrate our businesses globally and at the same time, regional directors
were not clear about how to work with them
 GBDs lacked the credibility and power to get things done and domestic managers were reluctant to help them.
 Vice president in the domestic corporation did not see GBD as equal with them.

Question 1.a.

a. What would you do differently if given an opportunity?

 Before selecting GBD, the idea will be discussed with the leaders in domestic corporation.
 GBDs will be selected considering the opinion of leaders in domestic corporation also, so that a healthy relation can
be built between both.
 Impart clear understanding of the role to be played by GBD, before assuming their new positions.

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Question 2

Did the creation of the World Board not address some of the problems with GBD?
World board did address some of the problems as given below
 Inability to provide the link between product divisions and assume conflict resolution roles was fixed by bringing in a greater
number of people with regional and functional expertise
 The load on the GBD have been reduced.
 The subsidiaries did not view the World Board members as interlopers anymore

The introduction of World Board has introduced a new set of problems

 Some thought that the introduction of WB was an effort to dismantle the regional organizations
 Thus, the regional organization was primarily against the World Board. Many domestic division managers were blocking the
progress.
 Some world boards had many personnel in it. As a result, they were not able to reach a consensus on any issues.
 The competing priorities in the meetings of World board often led to the failure of the World Board

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Question 2.b

Why did it still fail in two divisions but succeeded in the Fire Protection Division?
 The world board succeeded in the Fire protection division because it had opportunities and problems with worldwide
implications it was the 3rd best competitor worldwide.
 Their was proper coordination between GBD and domestic division VP
 All issues were discussed prior the board meeting between GBD and Jack Davies
 The Medical Plastics board became a platform but rarely reached agreement or decided on an action
 The Consumer Products board was full of conflicts and couldn’t agree even on the issues to be managed locally or
globally.
 The Key managers of the domestic division weren’t consulted before forming the World board.
 Even the President of Kent US wasn’t involved in the formation of World board.
 The negative reaction to the 2006 GBD concept had also created an adverse impact on the managers to embrace the
world board.
 Lack of proper communication and team work resulted in the Regional Managers feeling threatened and sensed the
regional organizations would be dismantled
 Failed to bring GBDs, domestic division managers and country managers under the same roof as a collaborative
unit.
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Question 3

Why do you think KCP decided to bring in Sterling Partners as consultant?

 KCP needed to build a process to coordinate price, product and sourcing decisions globally
 Earlier initiatives for integration – GBDs and World Boards failed to achieve reasonable success
 Difference in views of Perri and Fisher both of whom where top executives reporting to the chairman
 Need to get the confidence and involvement of country managers and other stakeholders in decision making
 Balance between technical capability and international growth is the need of the hour
 Bridging the gap between structure and processes
 Couldn’t come up with an internal solution – need for external help

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Question 3.a

With poor performance of KCP and impending global recession, is it the right time to bring in the consultants? If
yes why? If no why?
 Yes, it is the right time to bring in consultants

 A major component of KCPs poor performance may be lack of coordination in decision making as is evident by the
consultants report

 Need to redefine integration globally and differentiating locally among all product lines

 Urgent solution required bridging growth objectives with organizational structure and process for the continuity of a
profitable business

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Question 4

Where, according to Kotter's logic, did the transformation effort at Kent Chemicals fail? What should Chairman
Ben Fisher decide?

John P Kotter formulates 8 errors on why transformations fail. They are:

1. Not establishing a great sense of urgency
2. Not creating a powerful enough guiding coalition
3. Lacking a vision
4. Under communicating the vision by a factor of ten
5. Not removing obstacles to the new vision
6. Not systematically planning for and creating short term wins
7. Declaring victory too soon
8. Not anchoring changes in the corporation’s culture

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Question 4

Where, according to Kotter's logic, did the transformation effort at Kent Chemicals fail?
Major Reasons for failure are:
1. Not creating a powerful enough guiding coalition
• Due to long periods of independent existence of the JV’s, regional managers had their own strategy
and interests
• It was difficult to coordinate among multiple regional heads and avoid cannibalisation in
international operations
• Creating World board under the chair of GBD’s didn’t work well in all divisions
2. Lacking a vision
• As pointed by Sterling partners, each division need different vision and approach which was never
considered by Morales and his team
3. Declaring victory too soon
• When Kent considered their international expansions, they just bought majority shares in 15 JV’s
• This resulted in rapid growth from 11% to 27% and considered victorious.
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Question 4

What should Chairman Ben Fisher decide?

• Ben Fisher is responsible for international operations

• He can concentrate on marketing of Grease B gone division at first, which require purely local strategies.
• He can also establish strategies on R&D and technology development in medical products.
• As there exists matrix for coordination, he can also work out systematic financial and operational
strategies in all divisions

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Thank you.

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