1) General Industries, Inc. is a large U.S. conglomerate with operations around the globe, including Australia, Germany, China, and the U.S. Their product lines include industrial chemicals, construction machines, and food/beverages. Growth has occurred primarily through acquisition. Performance as of late has been somewhat lackluster. They are currently organized by region with regional product managers reporting to regional VPs, who then report to headquarters. Based on your limited knowledge of the situation,
a) What problems might you expect?
There were three major problems facing the company: first of all the company's management was organized around geographic dimension; therefore, the major decision tended to be taken placed on an area basis; this would cause conflict arising between regional managements as each area managers tended to protect their local interest. Secondly, the company is not successful to transfer its technology to its foreign operations efficiently, this cause the frustrations between the subsidiary and Corning's U.S organization. Thirdly, area base-structure was unable to provide a global marketing coordination necessary in some businesses;
b) How would you rectify the situation? What weaknesses does your solution have?
2) Superstar Electronics (SE) is a diversified consumer electronics company. Its product line includes television, Blue-ray players, household appliances (e.g., washer, drier, fridge, etc.), smartphones, and so on. Because the consumer electronics industry evolves fast, it has created a Corporate Venturing Group (CVG) that overlooks internal new product development efforts that are related to SE's existing products (but not necessarily newer versions of existing products) and a corporate venture capital (CVC) arm that invests in external startups that might help SE's businesses in the future. The Vice President in charge of these endeavors is a long-time company man who has never worked outside SE and asked for your advice in structuring these two groups. Specifically,
a) Based on what you have learned from the ART case and in-class lecture, what will be the challenges in fostering corporate entrepreneurship at SE?
b) Discuss aspects of the cultural differences and incentive systems that you may need to insert into these units (in comparison to existing business units of SE). Also compare and contrast similarities and differences between CVG and CVC groups. What roles do they play in fostering entrepreneurship at SE? (Hint: Think about centralization vs. decentralization and how this will match with related vs. unrelated product innovation)