Essay Sample on Kent Chemical: Organizing for International Growth

Introduction

Kent Chemical has experienced growth and expansion over the years since its inception in 1917 (Bartlett & Winig, 2012). The vast experience and exposure of the management teams heading the Kent Chemical internal operations has contributed to the high level of success the company has enjoyed. Different strategies have been implemented in the company, all aimed at increasing the returns from the local and international companies affiliated with Kent Chemicals (Bartlett & Winig, 2012). Even though Kent Chemicals has managed to invest in international companies, there have been challenges that have directly affected the globalization process. As a company goes through the expansion and growth process, there are challenges that the management team faces as it makes the transformation (Buckley & Ghauri, 2004). One of the problems facing Luis Morales as he began implementing Ben Fisher's international expansion strategy was the coordination and integration of activities and operations of the offshore entities. Organizations acquired by Kent Chemicals that had previously been competitors found it hard to adjust and cooperate or even work as a team, triggering constant frictions in the market (Bartlett & Winig, 2012). Establishing control was becoming hard for the Kent Chemicals as employees most members of staff lacked the right market knowledge and experience to push the redundant European companies to life.

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It was also becoming hard to plan the capital budget and allocate all subsidiaries with the right amount of financial needs they deserved. Operations in most overseas companies needed financial support to enable them stabilize and generate returns both in the short-term and in the long-term (Bartlett & Winig, 2012). The financial needs strained the management team at the Kent Chemical's headquarters who went through undue pressure trying to allocate the funds based on urgency of needs. The country managers often expected the regional managers to give in to their financial requests without reviewing the status and condition of a subsidiary.

Every international subsidiary still operated independently as the management teams rarely integrated their activities with those of other firms affiliated with Kent Chemicals. Most managers in the overseas subsidiaries were focused on their personal interests as opposed to the mission and vision of Kent Chemicals to integrate all overseas operations into one (Bartlett & Winig, 2012). The lack of a coordinated management team led to divisions and constant complaints from the country managers.

An evaluation of the organizational changes that Luis Morales made in response to the problems he faced during the global expansion and growth of Kent Chemicals would be considered unsuccessful (Bartlett & Winig, 2012). This is because the management team focused on taking over the global market without first understanding the consumer behavior and forces that affect demand and supply in the different countries. Each country's market was unique and the behavioral characteristics necessitated a different approach from that adopted in another nation. Kent Chemicals failed to adapt to the changing demands and pressures in the market, whereas its competitors were using the new systems.

Management of the global expansion and growth was unsuccessful because the regional managers set unrealistic targets for the country managers (Bartlett & Winig, 2012). The regional managers were under pressure to perform as they were expected to provide a detailed report at the end of each financial year. The subsidiaries felt the pressure to perform. Some of the financial targets were impossible to reach since the subsidiaries had not mastered the market characteristics. An organization can only be successful if the management team understands the needs of the market, then designs, products and services that will satisfy the demands (Goshal & Bartlett, 1990). For instance, the Research and Development (R&D) was not aware that the international division thrived on a product-based structure unlike the regional division that first identified the needs and opportunities then developed commodities that would fulfil the gap.

The Sterling Partners recommendations were viable and realistic for Kent Chemicals if the management team heeded the suggestions from the consultant group (Bartlett & Winig, 2012). For instance, the consultants noted the main reason Kent Chemicals had failed in its expansion and growth strategy over the years was the application of a single organizational solution to their diversified portfolio that comprised of more than one country. Each business in the different countries that Kent Chemicals had opened were unique. For instance, the customer needs, competition, and distribution channels were unique. Kent Chemicals would only succeed in the future if the management team applied a more customized approach for each market. Embracing a personalized strategy in each market would enable the country managers to master the behavior and characteristics of each subsidiary and produce positive results both in the short-term and in the long-term (Harzing, 2000). Therefore, Kent Chemicals got a critical evaluation of its strategies for the $1.8 million fee.

Conclusion

Morales should recommend the adoption of the Sterling Partners' suggestions that would allow Kent Chemicals have a complete transformation. The adoption of the new strategies would give Kent Chemicals a chance to rectify the mistakes it had continuously made in the past, leading to financial losses. Under the leadership of Morales, Kent Chemicals should embark on a new strategy by focusing on customized strategy for each country. Hence, chairman Ben Fisher should allow Morales initiate the change in Kent Chemicals. An evaluation of the strategies that Kent Chemicals embraces should be done quarterly to access its success.

References

Bartlett., C. A., & Winig, L. (2012). Kent Chemical: Organizing for International Growth. Harvard Business School, Boston, MA.

Buckley, P. J., & Ghauri, P. N. (2004). Globalisation, economic geography and the strategy of multinational enterprises. Journal of International Business Studies, 35(2), 81-98.

Goshal, S., & Bartlett, C. (1990). Managing innovation in the transnational corporation. Managing the Global Firm. Routledge, London.

Harzing, A. W. (2000). An empirical analysis and extension of the Bartlett and Ghoshal typology of multinational companies. Journal of international business studies, 31(1), 101-120.

Rugman, A. M., & Verbeke, A. (2008). A regional solution to the strategy and structure of multinationals. European Management Journal, 26(5), 305-313.