Kent Chemical Products (KCP) Organization: Challenges in International Management

Introduction

Kent Chemical is a multinational company headquartered in Kent city in the U.S. state of Ohio. The company started as a producer of rubber and later shifted operations to producing plastic additives and chemicals (Bartlett & Winig, 2012). Due to the expansion of Kents overseas businesses, Kents operations shifted focus to producing goods to meet needs in construction, medical products, consumer products, and electronics. The consumer, medical, and fire products departments contributed significant amounts of sales attracting attention from the companys directors. The creation of Kent Chemical International (KCI) brought managerial conflicts resulting in the poor performance of Kent Chemical globally. Although efforts to solve problems in international businesses have been made, cooperation and management of overseas KCP branches have been chaotic. This essay is research on Kent Chemical Products (KCP) organization to explore difficulties and challenges experienced in managing Kent Chemical Internationals (KCI) department.

Problems Faced by Luis Morales During the Implementation of the Expansion Strategy

The president of Kent Chemical International division is Luis Morales, who is obliged to implement the global integration strategy issued by Ben Fisher, Chief Executive Officer (C.E.O) of KCP since 1998. Morales encounters challenges from employees doubts about the quality of their managers due to the availability of regional financial information. The line The subsidiaries felt that we set arbitrary financial targets that were out of touch with their market realities. Despite our good intentions, I think the country managers were often right shows support for managers who set targets (Bartlett & Winig, 2012). Important financial information was openly shared among the subsidiaries resulting in reduced collaboration and a focus on capital allocation. Employees in the U.S. region became reluctant to offer advice and finances to the subsidiaries, which did not meet expectations.

There was a straining relationship between subsidiaries and U.S. operators. Morales encountered difficulties during his efforts to unite regional branch managers to run the entities independently. Morales had to deal with misunderstandings between members of his group, which prevented them from setting attainable targets. Encouraging branch managers to drop their self-interests and focus on KCPs future was not an easy task. Lack of effective leadership and communication skills raised inconveniences like the incidence when a Korean subsidiary wished to manufacture fire retardants for electronics customers, thus challenging the German subsidiaries, which previously exported retardants to Korea (Bartlett & Winig, 2012). Pricing strategy coordination became a problem due to the implications of new products and global sourcing decisions, which could affect Kent Chemicals reputation. Morales struggled to unify and control the international subsidiaries because of poor communication flow and priorities given to self-interests.

Reason for GBDs Failure in Achieving Coordination for Global Operations

In 2006, Luis Morales appointed Global Business Directors (GBDs), giving them authority to hire three to six support staff members for each. The GBD directors supervised three different businesses but operated with unclear roles and responsibilities. Immediately after the introduction of GBDs, international subsidiaries managers viewed themselves as less valuable compared to the new directors, resulting in reduced motivation and dedication to work. According to Bartlett and Winig (2012), a lack of clear communication about duties and responsibilities led to wasteful meetings that distracted important daily activities. After a few months of GBDs operations, the subsidiaries viewed GBDs as interlopers, although the medical-plastics director was appreciated due to useful business coordination. The consumer-products director performed poorly by interfering with local issues without prior knowledge or experience.

The EMEA regional director assumed the GBD structure was a straining factor that wasted KCP resources and time. The director went ahead to condemn the GBD program for not defining roles resulting in reduced cooperation and coordination with the GBDs. The directors arranged wasteful meetups instead of attending to other important business activities. Morales assumed the main problem to be the GBDs inability to provide sufficient guidance to domestic product and made assumptions that everything was playing out well. The GBDs lacked the credibility and authority to get things done (Bartlett & Winig, 2012). Jack Davies, the acting vice president for the fire protection division, felt that the problems initially started with the appointed GBDs. He stated, I dont think there was a single vice president in the domestic corporation who saw them as equals. Some domestic managers remained dominant and participated less in offering solutions, while others seemed to be in hunger for control over the growing overseas businesses.

What Went Wrong After GBDs Empowerment?

In 2007, Peter Fisher and Luis Morales initiated a world boards strategy to work together with the directors. The board members were assigned the responsibility of developing strategies to be used for global business developments (Bartlett & Winig, 2012). Fisher and Morales hope to turn things around were cut short by a prolonged lack of effective communication among board members and staff. Agreements became hard to arrive at, and a lot of useful time was wasted. I believe there was real potential for the changes. They became unsuccessful because, again, there were no quality leadership characters to give directions. Despite Morales hiring experienced global business leaders, they did not prove competent enough. Individual directors had different opinions about their responsibilities and purpose. The consumer products director claimed that he tried to influence consumer-oriented thinking among overseas managers.

The GBD for the medical products division suggested that he could add value by integrating international and domestic parts of KCP operations. Bartlett and Winig (2012) suggested that the lack of buy-in to the global board concept from company leaders such as Angela Perri, lack of operational maturity among staff members of the various divisions, inter-divisional cultural differences, character and personality differences, and the use of unified model across the company to solve diverse problems caused more complications to the GBD program. The fire protection world board started its journey successfully by meeting the set objectives. The medical plastics board converted to become a discussion platform, rarely reaching agreements or decisions. The consumer products board conducted two meetings, then quietly dissolved.

Morales reflected on the negative reaction to the 2006 GBD concept for making managers hesitate to embrace the world boards. Some of the consumer products managers felt threatened and thought that world boards would dismantle the regional organizations. Many domestic managers thought GBD was a way to give the struggling inspectors more power. According to Morales, success would be achieved if all the board members, including GBDs, domestic division managers, and country managers, practiced openness, became cooperative, and encouraged rational team players without serving individual interests (Bartlett & Winig, 2012). Peter Fisher suggested that, in order to accommodate individual and organization interests, there is a need to cut board members since some world boards have more than 20 members.

The boards were too large and became wild to control or manage. There were many competing priorities, which hindered addressing important and significant issues. The majority of domestic division managers were blocking progress by trying to control global business directly. From Perris perception, the domestic organization would provide significant support if only the key managers had been consulted during the formation of the boards (Bartlett & Winig, 2012). Peter and Luis expected managers divisions to be more involved and supportive. Perri claims that her opinion was never asked during the formation of the world boards structure and activities, which is a concept she would never approve of.

Sterling Partners Recommendations

Angela Perri introduced Sterling Partners, an international consulting firm, to help solve the issues revolving around the international business division. The need for consultation was raised after the three top directors failed to come up with amicable solutions to problems facing KCI. The consultation fee amounted to $1.8 million, which helped them to acquire valuable solutions. The first recommendation was to diversify the approaches being used by all three businesses. Sterling Partners suggested that Kent Chemical impose uniform organizational solutions on their strategic, diverse portfolio (Bartlett & Winig, 2012). The international consumer products division needed to focus on new ways to attract customers through marketing and to efficiently source resources from different regions. The medical products division should focus on improving research and development of essential hospital needs to maintain and improve success.

Sterling Partners advised about the need to focus on R&D and promote strong global cooperation between the fire protection division managers. The consultation firm recommended the implementation of a decision matrix strategy to expand its market analysis by defining the core business (Bartlett & Winig, 2012). The matrix strategy would help to decide the order in which to execute decisions. The responsibilities and obligations of each member would be decided through the matrix strategy.

With regard to the sample decision matrix for the fire protection products, the matrix defines the roles for each position. For example, the GBD for the fire protection business is required to recommend the allocation of resources to new products. Sterling Partners services enhance cohesiveness and provide a structure to promote strong and effective teamwork among employees and leaders. Sterling advisers suggested that KCP businesses should have different areas of focus, avail necessary tools, and practice clarity and transparency. The information offered by Sterling partners promotes a positive mindset to guide the company in the right direction.

What Should Morales Recommend? What Should Chairman Ben Fisher Decide?

Considering Luis Morales failure of the previous attempts to improve international operations, there is a need to provide achievable recommendations to KCP management for solving problems. Moraless suggestions aim to resolve the initial problems facing Kent, but they are not viable to the changing demand and supply among the international entities. The managers unwillingness to give up their self-interests and the independence of subsidiaries contributed to the inability of the organization to solve problems (Bartlett & Winig, 2012). The use of a matrix decision is the strategic angle to tackle problems and a perfect step-in to steer KCP in the right direction. The matrix provides clear directives and responsibilities to the management and employees. Morales has the potential to monitor global business directors with the help of a matrix strategy. The matrix solution eliminates the conflict between directors for having different ideas about their expected duties and responsibilities. Morales should have specific actions and responsibilities to facilitate a change in the organizational structure.

The matrix decision emphasizes member participation, promoting the inclusion of international entities, and encouraging employees to diversify globally with a positive mindset. Encouraging members of an organization by providing solutions will help to embrace positions and collaborate effectively to increase the productivity of an organization (Bartlett & Winig, 2012). Ben Fisher has decisions to make on whether to keep Luis Morales on as the president of Kent Chemicals International or to find a replacement. Morales has experienced a series of failed business strategies, which question his ability to head a department. Ben Fisher can give another shot to Morales, but I would advise him to start looking for Moraless replacement. The instance when the international divisions net income dropped from $38 to $24 million in 2007 was sufficient evidence of Luis Moraless failure and need for replacement.

Conclusion

The implementation of the decision matrix to solve challenging business problems is a significant solution. Through the matrix strategy, customer delivery and management practices improve significantly. Regardless of whether Ben Fisher replaces Morales or not, something needs to be done to restore stability and profitability in the international division. The majority of the international subsidiaries managers do not respect the GBDs, which is a dangerous move affecting the magnitude of decisions and directives given. The existing dispute about whose decisions matter needs to be solved to minimize the delay of company activities and the wastage of valuable time. Being the CEO, Ben Fishers decisions are the most effective and have the weight to move things around, although his skepticism contributes to his dominance. Kent incorporation must formulate strategies such as promoting effective communication, employing innovative business managers, and clear communication of duties and responsibilities to avoid unnecessary business inconveniences.