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
180 1800

160 1600

140
1400

120
1200

100
1000
Cost of Sales
80 SG&A
800 R&D

60

600
40

400
20

0 200
2004 2005 2006 2007

0
2004 2005 2006 2007
Bezeau
 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
Bezeau, do
Delaney we want to go and why?
& 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

 Have made valuable  Implemented expansion

patented products over time

Fast growing
international
operations
 Large growth from 11%
to 27% of revenue
Strong leaders:
Morales and Perri
 Morales-
Bezeau, created
Delaney & Hall
Weaknesses
Internal and External
9

Internal External

Entrepreneurial Weak economy-

Independence:
 Subsidiaries compete with
one another, they export
into each other’s markets
instead of working together
to compete
 No trust between
globally and expected
to shift downward
Not adapting to
changing pressures
and demands

countries-question what
each is doing
Poor communication
 No collaboration between
countries, or between
Bezeau, Delaney & Hall
leaders and staff
Opportunities
Internal and External
10

Internal External

Empower Grow client base

 Look for new
employees
 Change culture to give opportunities
 Growth in medical
employees more
input(Schein, 2010) industry-currently
 Include employees in accounts for 35% of
meetings and global revenue
decisions(Dubrin, 2010)
Reduction in
production costs
 Cut un-necessary
Bezeau, Delaney & Hall
practices
Threats
Internal and External
11

Internal External

Breakdown in Intense price

overall corporate
strategy
 Lack of strong
leadership
 Lack of direction
 Lack of communication
 Lack of current
mission, vision, values
Bezeau, Delaney & Hall
competition
 Fireprotection
products
 Need to decrease
production costs
Global recession
predicted
 AlreadyKCPs net
income has seen a
dramatic decrease from
2006 to 2007 and worse
 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
Bezeau, Delaney & Hall open
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/white-
papers/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
Bezeau, Delaney & Hall