Question1: What do you think of Grunewalds plan for creating a global lock business?

What factors favour this action? What factors stand in the way?

Mr. Grunewald had been recruited to black and Decker in late 1988 to the staff position of president as a key resource in the globalization initiative at black and Decker. During the 1980 s Black and Decker had established themselves as a leader in the power tool industry. Black & Decker recent acquisition of the Emhart Corporation provided many opportunities and along with it brought the hardware business under its umbrella Challenges Mr. Grunewald believed that there was a substantial work which was to be done if they intended to create a global Black &Decker. The tasks which were challenging were to coordinate with the acquired entities which would require some of the key managers to lose their jobs and also the rationalizing of the distribution channels, simplifying the design and engineering and reducing the cost overhead as the companys credit was squeezed in financing the Emhart acquisition. .however it was important to rethink the strategy by integrating all the companies and their business under one head to achieve greater strength and success. Another challenge was that the companies under Emhart thought of expanding only in terms of expanding their narrow line abroad without considering the possibility of integrating and sourcing its global production by centre of manufacturing and design expertise or manufacturing vs. assembly operations. This narrow approach had led to a weak overseas business in Asia, Latin America, the Middle East and Africa. There was a need to change this and maintain a good and strong business in the above mentioned continents The company was facing the problem of the integration of the various companies which had been acquired was not internal but it was accompanied by an equal task of how to conceptualize the global marketing of their products in the various regions of the world. With regard to marketing any one Emhart company tended to think only in terms of expanding its narrow line aboard without considering its global production center of manufacturing expertise and design expertise which made the business overseas very thin in companies in locations like Asia. Latin America, Middle East and Africa. Another challenge that was measured was as the companies portfolios become diversified, the complexities will increase. Also a global initiative the company has to be adaptable to the different cultures of various countries and meet their demands; quality required by the customer base and also follows to the local regulations and customs thus not allowing a company to follow a fixed structure. The main question was also how the brand name transfer would happen from basement [power tools] to kitchen [house wares] thus leveraging a sense of risk.

Opportunities He felt that that going global was important to capture the market share of the middle market where the low cost operators won on cost and the niche players survived on gross margin. He knew the future had great potential. Also the addition of global lock business would add to their diversity and the company would gain favorable publicity at the global platform. Mr. Grunewald believed that there was a huge growth potential for Black and Decker in the international market. The door hardware industry followed old traditions and faced fierce competition in the market. Most of the firms tended to view the markets based on the following three criterias security (from minimal to extreme) systems (from providing internal) Technology (from very simple to electronic). None of the existing manufacturers made products that could offer the entire market segments. The solution to all the above challenges was the consolidation The consolidation of the companies would improve market knowledge along the dimensions of competition, consumer segments and product requirements. It will enable black and decker to enable a complacent distribution system around the world. Moreover it will help in setting global quality standards which will help in promoting product innovation and bring a unified force and credibility. What are the organizational implications of this strategy? What kind of structure, culture, and systems are necessary to make it work? What would be your action plan for implementation? Ans.2 .Black & Decker has been transformed into a global marketing power by the acquisition of Empharts which was driven by a four part strategy directed to all the resources and energies for the following objectives Build core profitability Strengthen management Improve return on equity Broaden the earnings base

Build Profiltibilty

Get Return (Roi)

Strategy

Strengthen Management

Broaden Earnings

The organizational implication of this strategy were ---As mentioned in the case every company working under the Emharts management had been operating as an individual entity. All of them had were autonomous bodies with their own design, manufacturing, marketing and support functions. The integration has many advantages To instill global quality standards across all units of the company To promote product innovation To bring a unified force and credulity across all departments To improve the complacent distribution base To improve the market knowledge of the consumer segments, competition, product requirements etc.

Advantages of integration

Global Quality Standard Across All Units

Unified Force And Credibilty

Improve The Compacent Distribution

Improve The Market Knowledge

Product Innovation

Till now since there was lack of communication between the headquarters, on the ground and local personnel champion. Mr. Grunewalds wanted to establish the new jobs but keeping the entire communication channel active so that all departments can coordinate. The integration was needed to facilitate the intercompany organization across all international units. This was needed to ensure smooth operation and growth of the hardware business.

Organization Structure The organization structure shown in the chart depicts that president heads the organization and is sub headed at second level by the products- power tools, household products, industrial which basically shows it being classified Functional Division

Functional

Combinational Structure

Geographic

Also at the third level under the head of Power tools the structure was divided based on location which also depicts it to be based on Geographic Division

Thus the structure was a mix of functional and geographic division. There is hierarchy within the organization. Three main components of the organizational structure: Need of formalized relationships between the managers and the supervisors. Proper communication across all the departments is needed. Coordination and integration of all the activities across the global units.

To achieve the efficiency in the act ivies and the organizational goals the communication channel needed to have dual direction flow of information. The organization would be able to achieve it if the coordination was improved both at the horizontal and at the vertical level. It required all the units to coordinate and cooperate to achieve the expected goals and the return on them. Culture Any organization which is global and has various locations across the globe is bound to have different set of employees with different set of values, perceptions and attitudes. Such organization does face the issue of cultural differences and conflict. And organizational culture plays a vital role in providing its employees a comfortable environment to work and in improving its effectiveness. Black and Decker should develop a culture which follows a unique integrated set of management practices and management philosophy which is able to include flexibility required to coordinate with different culture across various locations for its effectiveness. There is a need to impart training in culture to all its employees to understand the need of change and flexibility and to reduce conflicts among the units. There is need for everyone to be trained in cultural differences to be able to give importance to all the employees values and beliefs. The culture should impart the value of loyalty and trust which is required among the employees at various locations to cooperate. Systems: Black and Decker follow an open systems approach. It reaches out, draws energy from the environment, and tries to shape its environment. It follows a model of input throughput output that is how the inputs r taken and how the inputs are transformed into outputs.

Input Processes

Output

The various subsystems are Goals subsystems that is basically the organizational goal to build profit and get return on equity and also to globally expand the business. Structural Subsystem- basically is about the organization structure communication among its units where all the units across the locations of the Black &Decker are required to coordinate and cooperate and bring effectiveness. People Subsystem- is about the people of the organization and their relationships and about their interpersonal communication which includes how the people will facilitate the vertical and horizontal communication across all departments.

Goal

Subsystems
People Structural

Question 3: Assume you were Grunewalds OD consultant. What coaching advice would you have for him in executing the strategic change? Ans3. for executing the strategic change Black &Decker has understood the true need to implement it that is to integrate all its units and develop the communication channel to facilitate its effectiveness. As an od consultant I would advice them to follow the following steps To understand the consumer segments and markets thoroughly

To build the communication channel between the headquarters and the various units at different locations Also there is a need to adopt the way of planning reviews of the business. The company must continue to strengthen its core products within this portfolio so that these products will allow the company to find other opportunities of expansion. There is a need to build synergy between the parent company and its units so as to communicate the strategy and its goals. To develop competitive edge in the market by taking strategic managerial decisions. Facilitate the creation of globalisation at the local level by communicating the goal to the local champion of the various units. Also to gain the entry in new emerging markets there was a need to build the reputation of some of the Emhart companies which had less presence in the market among the customers so as to gain market share in future. Integrate the Emhart entitles into one and impart its employees with the knowledge of the market , vision challenges so as to overcome the marketing inefficiencies and brand proliferation.

I would advise him that it is important for the managers at Black Decker to keep on measuring the performance of different parts of supply chain. The planning and information activities should be performed by the operations managers and senior executives if they have an up to date information regarding the performance of different supply chain firm, stake holders and the resources. Black & Decker made some poor decisions in the past that have eroded its profit margin and has not produced a competitive advantage to create above-average returns. Fortunately the company has come back to a true vision that includes the consolidation of their portfolio. One opportunity that this seed money should be earmarked for is the expansion into the international market. Black & Decker must find international companies that already have a strong presence in the countries that Black & Decker is expanding into and either acquire, merge, or create a joint-venture. The relationship between Black & Decker and these companies MUST provide enough synergy to justify such strategic moves and expansion. These strategic managerial decisions and actions will help the company to obtain competitive advantages which will result in above-average returns, leading to greater shareholder wealth and value.