Kent Chemical: Organizing
for International Growth
1
TEAM 1
LDR 660 WI-II 2013
BETHANY HALL, CASSIE BEZEAU,
VICKIE DELANEY
Delaney
Company Overview
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 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
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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
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 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
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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
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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
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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
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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
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 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.
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Dunning, J. & Hedlund,G.(1993)
How it will be implemented
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 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?
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 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
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
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
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Bezeau, Delaney & Hall