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Kent Chemical Organizing for International Growth

Solution Id Length Case Author Case Publisher
2482 1442 Words (6 Pages) Christopher A. Bartlett, Laura Winig Harvard Business School : 4409
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The case is based in 2008, and puts the spotlight in Luis Morales who is the president of Kent Chemical International. The company has tried to capitalize of the internationalization of its product offerings and operations twice, and has failed both times. Morales is focused on a third reorganization of the company to capitalize on the global growth opportunities and benefits. The president seeks to develop a better structure with a reorganization to ensure that US based operations are globally aligned with the subsidiaries. However, internationalization is not easy. The case sheds light on the challenges that organizations face in way of globalization – including conflict between internal divisions and business units, recessionary pressures, and lack of effective skills and knowledge needed for expansion. The case further highlights the need for growth through internationalization as Morales last chance for Kent’s reorganization – identifying no room for making mistakes.

Following questions are answered in this case study solution:

  1. What were the problems facing Luis Morales as he began implementing Ben Fisher’s international expansion strategy?

  2. How do you evaluate the organizational changes he made in response to those problems? Why were they unsuccessful?

  3. What do you think of the Sterling Partners recommendations? What did Kent get for the $1.8 million fee?

  4. What should Morales recommend? What should Chairman Ben Fisher decide?

Case Study Questions Answers

1. What were the problems facing Luis Morales as he began implementing Ben Fisher’s international expansion strategy?

With the implementation of the international strategy, a number of problems surfaced for Morales. With an increased participation in consolidation through joint ventures, Kent was able to acquire competitive players. However, the smaller share in ownership through JV meant that the company had limited financial and managerial control in these JVs. Moreover, there was a high level of competitiveness – even in subsidiaries which had operated independently for so long. With the expansion towards internationalization, Morales faced hiccups and difficulties in coordinating activities and integrating the organizational culture to ensure smoothness. With a lack of coordination and cultural alignment, Morales also graced issue soft managers working for self-interest instead of overall organizational growth and development. This led to further problems and difficulties regarding capital allocation as well as budgetary restraints. With increased parochial attitudes, self-interest, and lack of alignment and coordination, Morales also faced challenges in terms of effective change management implementation. This change management includes not only the hard aspects of the organization such as technology and related systems, but also soft aspects such as values and morals. Consequently, there was the challenge of duplicative activities and operations – which hinted at the wastage of resources. Lastly, with an increased number of subsidiaries, the company also faced challenges of a lack of skills and knowledge in its workforce – which it has acquired through the acquisitions. The workforce is not skilled, and does not have the updated knowledge needed for keeping up with the technological as well as other trends in the industry. This also highlighted that the organization was challenged with the impact of new systems – often leading to second guessing local country employees, and straining the organization overall. As a result, Morales also faced the challenge of the organization not being able to adapt to the changing demands and pressures i.e. the evolving business and consumer trends. This meant that Kent was falling behind the competition, and would soon struggle to remain relevant. 

2. How do you evaluate the organizational changes he made in response to those problems? Why were they unsuccessful?

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