1. Kent Chemical Nathan Washburn Associate Professor Thunderbird School of Global Management

2. Case Questions  What were the problems facing Luis Morales as he began implementing Ben Fisher’s international expansion strategy?  How would you evaluate the organizational changes he made in response to those problems? Why were they unsuccessful?  What do you think of the Sterling Partners recommendations? What did Kent get for the $1.8 million fee? 2

3. Problems: coordination and integration  Business problems: duplication of resources and activities, competition and overlap in export markets, missed opportunities for technology transfer (spread of innovation)  Structural problems: controls seen as intrusive, lack of coordinated information, resource allocation problems  Interpersonal problems: conflict between countries, resentment of HQ intervention, international vs. domestic tensions and rivalries 3 HQ Sub 1 Sub 2 Sub 3

4. Why did the Global Business Directors reorg fail to deliver on coordination and integration?  Could the GBD concept have worked if it were implemented better?  Define roles and responsibilities more explicitly?  Give more power and legitimacy to the position?  Involve the country managers and product divisions more directly?  Provide more active top management support?  Did the World Boards address these problems? 4

5. Sterling’s recommendation: was it worth it?  The issue had become highly politicized so having an outside party deliver a solution might be the only way forward  The decision matrix has value as a negotiation tool for deciding where responsibility for key decisions lie  The proposed solution is more of a focus on the process (the decision matrix) rather than some detailed structural solution 5

6. Session Takeaways  Creating decision-making authority in global organizations is complicated  When decisions regarding resources and responsibilities are made, it becomes personal, political, emotional, etc.  Symmetrical organizations structures are tidy, but not always effective; subsidiaries need different ways of interfacing with each other and headquarters 6