Case 4.4

In: Business and Management

Submitted By asala118
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1. What were the problems facing Luis Morales as he began implementing Ben Fisher’s international expansion strategy? One of the problems that presented to Luis when implementing the global expansion strategy was the fact that the control fire industry was a very large, fast growing and increasingly specialized field requiring big investments in R&D to keep pace, therefore innovation and price competition caused Kent to focus on reducing production costs while providing fulfilling products at the same time. Also, fire protection regulations varied by country, so the chemical agents Kent produced in its four plants around the world often had to be adapted to local markets since 45% of their sales came from international markets. In addition, as overseas opportunities grew, Morales became aware that his organization was not adapting well to changing pressures and demands. Capital allocation also became more complex as well as the overseas subsidiaries long history of independence that would lead managers to protect their self-interests. The individualistic position of each subsidiary was also an issue because they operated as a decentralized federation, with a non-connection with an interconnected global strategy. Another issue that presented to Morales was that even within his international division, the regional organization has difficulty coordinating issues with global implications since nobody was coordinating price, product or sourcing decisions globally. 2. How would you evaluate the organizational changes he made in response to those problems? Why were they successful? I would definitely have to agree that the organizational changes made by Morales in response to the issues the company was facing were very messy at first he took many reactive responses, with no clarity about how to organize the company effectively. He lost credibility…...

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