References - Blogs by Sammie Jones



Have You Ever Tried To Milk a DowSammie L. JonesUniversity of Alaska FairbanksOrganization Description History:In 1897, Herbert H. Dow created the Dow Chemical Company (DOW) to supplement the needs of the Midland Chemical Company. CITATION The15 \l 1033 (Britannica, 2015) The company’s initial purpose was to produce bromines but quickly expanded to phenol and magnesium, which was used in ammunition during World War I. CITATION The15 \l 1033 (Britannica, 2015) Today, Dow is one of the leading chemical companies in the world. CITATION Dow163 \l 1033 (Dow, 2016) Dow’s portfolio generates revenue streams of nearly 49 billion dollars from the various products that it makes. Dow creates over 6000 products, spread across 179 sites, in 35 different countries. CITATION Dow163 \l 1033 (Dow, 2016) The products they make touch virtually all facets of life to including: agriculture, automotive, buildings & construction, consumer goods, and packaging, to name a few. Dow Chemical Company or its products have affected everyone in the United States, whether they know it or not. Plastic wrap anyone?Mission:According to their website, Dow’s mission statement reads: “To passionately create innovation for our stakeholders at the intersection of chemistry, biology, and physics.” CITATION Dow163 \l 1033 (Dow, 2016)In addition, their vision statement is:“Maximize long-term value per share by being the most valuable and respected science company in the world”. CITATION Dow163 \l 1033 (Dow, 2016)For a company that is been around for 126 years, Dow has effectively kept their stakeholders interested in their business through innovation and profit growth. Dow’s research and development (R&D) team continues to create products that help them be competitive and inspire people to believe in anization Structure:Being an international company with over 49,500 employees, it is no surprise that The Dow Chemical Company has a complex organizational structure. (Dow, 2016) Currently, Dow has eight officers, who report directly to the CEO, that include: Chief Financial Officer (CFO), Chief Operations Officer (COO), Sales & Market Business, Manufacturing & Engineering, Human Recourses & Aviation, Chief Technology Officer, President of Dow Europe, Middle Ease, Africa and India, Legal/General Counsel (see Figure 1). (Unknown, Dow Chemical, 2016) The eight officers are spread out horizontally on the organization chart indicating the company has a five on the horizontal differentiation scale. Dow’s international operation requires the company to have a complex internal organization structure to deal with the governmental, legal and accounting regulations of the various countries in which they operate. Dow’s COO, James Fitterling, has executive accountability for all of Dow’s business including Environment, Health & Safety and Sustainability, Manufacturing and Engineering, and Supply Chain, as well as Research & Development. (Dow, 2016) In the United States alone, there are 68 Dow Chemical Plants, spread across 25 states, which Fitterling is responsible for. (Dow, 2016) Hardly any of the plants make products that go directly to the consumers. (Dow Louisville, 2016) Assuming there are regional managers to keep Fitterling’s span of control closer to the ideal number, the vertical positions might includes the Regional VP of Operations, Site VP of Operations, Managers, Supervisors, and of course the people in the field. This possible variation brings the total number of vertical differentiation to a minimum number of seven. The examples structure is based an oil and gas refinery, which is quite similar to chemical plant. The Dow chemical company is located in the second quadrant titled Symmetric (see Figure 2). Businesses in this area rate high on both horizontal and vertical differentiation. Because of Dow’s business structure, “[t]he business presidents will be fully accountable for generating increased earnings, and the accelerated advancement and execution of company strategy” says Hydrocarbon Processing magazine. (Unknown, Dow Chemical to Revamp Organization Structure, 2012)Organization Culture:Dow’s culture includes “differing experiences, backgrounds and perspectives among [their] employees, and draw from those differences to fuel innovation”. CITATION Dow169 \l 1033 (Dow, 2016) It is corporate thinking like this that led Dow’s to be voted UAE’s and China’s Top Employers and Best Places to Work For LGBT Equality. CITATION Dow163 \l 1033 (Dow, 2016) Dow’s open culture seems to start from the top and work its way down. In addition, Dow is constantly training manager to recognize “unconscious bias” in the workplace. CITATION Daf161 \l 1033 (Daft, 2016) By doing so, “the number of women in higher level positions increased”. CITATION Daf161 \l 1033 (Daft, 2016)Environment:Dow fits into a Type 4 company. As seen in Table 1, it is expected to have a turbulent environment, which it does. Dow is highly dependent upon their suppliers in all locations in which they operate. As the oil prices fluctuates, so does their profits margins. In addition, more stringent environmental regulations are on the horizon, which will force Dow to implement more and more processes to reduce emissions. Installation of these non-product driven units will decrease the profits for their shareholders. Alternatively, Dow is quite in tuned with their organizational environment and successfully predicts when the wind will turn. They have been in operation for over 100 years and have successfully operated overseas for over 40 years. (Dow, 2016)Problem Statement Dow does a great job creating profits for their shares holders. However, as every business owner knows, there is always room for improvement. A SWOT analysis was performed on Dow Chemical to assist in determining both their strengths and the locations in which there is space for enhancement. Dow’s strength lies in product diversification, joint ventures and innovation. They’ve partnered with companies in Kuwait and opened multiple ethylene glycol production plants, which produces 600,000 metric tons a years. (Dow, 2016) Moreover, the joint venture in Saudi Arabia is one of three with Juffali & Brothers, which manufactures and sells latex specifically designed for coatings systems. (Dow, 2016) Dow does not shy away from joining forces with other companies to produce common products in area they do not operate. Nevertheless, Dow’s has weaknesses in their current reputation and customer satisfaction, which could possibly bring down their stock value. The three recommendations that Dow can integrate into their organization are: implementing a matrix organizational structure, increasing public opinion, and become a benefit corporation. Recommendations 1.) Type 4 companies demonstrate a matrix type of configuration, which incorporates a mix of functional and divisional form. The only item that does not fit in Dow’s corporate strategy is the configuration aspect of Type 4. I believe that Dow exhibits a divisional or multi divisional configuration. Each plant has their own tasks and goal that meet that community and business needs. Moreover, the strategies that each plants implement aligns with the corporates mission of “low cost in all products and assets positions, leveraging integrated sites”. (Dow, 2016) Even though divisional organizations structure is ideal for large companies with multiple products, Dow losses technical competence and coordination with this type of structure. The two techniques lost are essential to efficient product development. Dual-authority matrix structures are designed to help improve organizational goals when technical expertise and product innovation are indispensable to the mission. Dow meets all of the conditions needed to successfully implement this type of structure. This type of organizational structure will assist in meeting the dual demand from the customers and the ever-changing environment. Since, the implementation of their new structure in 2012, Dow’s company has increased their gross profit by 15% and decreased their operating expense by 4%. (Yahoo Finance, 2016) If Dow changed their organizational structure to matrix, they could possibly reach their goal of $10 billion in revenue by 2020.2.) Large corporations are highly susceptible to lawsuits. Dow Chemical Company is no exception. With over 119 years of innovation, a lawsuit for patent rights was bound to happen. (Dow, 2016) In 2015, Dow finally settled a multi-year dispute with Bayer over four patents involving genetically modified plants. (Penton, 2015) The International Chamber of Commerce International Court found Dow in breach of a contract and awarded Bayer $456M. (Penton, 2015) It is law suits like these that have hurts Dow’s public reputation. And once tarnished, it is quite hard to repair. Dow continues to remain in the public eye for other patent infringement suits.Public relations are aimed at altering public opinion of a company. The goal is to shape the general publics opinion of a company in a favorable light. This could include website, speeches, or billboards. Dow’s public relation team needs to get ahold of the company’s image and get it more on the favorable side. Through recent experiences in Midland, MI, where Dow headquarters is located, the general populous seems unimpressed with the company as a whole. Dow needs to start with the local population and work their way out.3.) Maryland was the first state to adopt the Benefit Corporation legislation, on April 14, 2010. (B Lab) Six years later, 30 states have joined them, with 7 more bills in process, to include Alaska. (B Lab) The societal and environmental impact of becoming a Benefit Corporation was quite attractive to companies like Kick Starter and Patagonia. (B Lab) The desire for corporations to become Benefit Corporation will continue to grow. As business and their competitors join this elite group, others will follow. People want to work for companies that are known as community and environmentally conscience. Moreover, 64% of investors state that they would prefer that companies adequately disclose of their non-financial risk. (B Lab) If there were one thing that Dow can change it would be attracting new customers by becoming a Benefit Corporation. Committing to this change will give new investors the assurance that they need that Dow’s mission statement aligns with their personal views and will not change. (Benefit Corp, 2016) Moreover, adequately disclosing of non-financial risk will allow investors to see Dow’s environmental compliance. (Benefit Corp, 2016)Conclusion Overall, Dow Chemical Company does a fantastic job of creating wealth for its shareholders, employees, and the community in which it operates. Still, implementing the three recommendations outlines above may be the little push they need to reach their goal of 10 billion dollars in revenue. Moreover, assist in keeping the public opinion high and create new environmental conscience customers and maintain their loyalty. References BIBLIOGRAPHY B Lab. (2010, April 14). Maryland First State in Union to Pass Benefit Corporation Legislation. Retrieved October 8, 2016, from CSR News Wire: Lab. (n.d.). State By State Status of Legislation. Retrieved October 8, 2016, from Benefit Corporation: Corp. (2016). Benefit Corporations. Retrieved October 9, 2016, from Why Do Investors Like Benefit Corporations: , T. E. (2015, December 11). Dow Chemical Company. Retrieved October 21, 2016, from Encyclopaedia Britannica: , R. L. (2016). Organization Theory & Design (12th Edition ed.). Boston, MA: Cengage Learning.Dow. (2016). Corporate Officers. Retrieved October 9, 2016, from The Dow Chemical Company: . (n.d.). Dow Chemical Company. Retrieved September 16, 2016, from Dow Chemical Company: . (2016, September 21). Dow Launches new RO Product Line for Unique Industrial Application Needs. Retrieved September 27, 2016, from Dow Chemical Company: . (2015, December 15). DuPont and Dow to Combine in Merger of Equals. Retrieved September 27, 2016, from Dow Chemical Company: Louisville. (2016). Louisville Plant: Product. Retrieved October 9, 2016, from The Dow Chemical Company: . (2016). Our Company. Retrieved September 27, 2016, from Dow Chemical Company: . (2016). Partnering for Growth. Retrieved September 27, 2016, from Dow Chemical Company: . (2016, August 11). A Powerful Combination Unlocking Exceptional value. Retrieved September 27, 2016, from DowDuPont: , J., & Stohr, G. (2016, February 26). Scalia's Death Prompts Dow to Settle Suits for $835 Million. Retrieved September 27, 2016, from Bloomberg: . (2015, November 15). SWOT Analysis of Dow Chemical. Retrieved September 27, 2016, from Marketing Dawn: Self Improvement: , R. (2014, April 02). Chevron Philips Chemical Breaks Ground on Ethane Cracker. Retrieved September 27, 2016, from : . (2016). SWOT Analysis of Dow Chemical with USP & Competitors. Retrieved September 27, 2016, from MBA Skool: , K. (2015, October 29). Dow Must pay $456M to Bayer In Plant Patent Row. Retrieved September 27, 2016, from : . (2016, Februrary 11). Dow Chemical Eyes High-Margin Products Gains from GoM Expansion. Retrieved September 27, 2016, from Petrochemical Update: , B. (2016, September 16). . Retrieved September 27, 2016, from Why Bayer's Massive Deal to Buy Monsanto is So Worrrisome: , J. (2014, September 14). Dow Chemical Fails to Overturn $1.06 Billion Price-Fixing Award. Retrieved September 27, 2016, from Reuters: . (2016). Dow Chemical. Retrieved October 9, 2016, from The Official Board: . (2012, September 4). Dow Chemical to Revamp Organization Stucture. Retrieved October 9, 2016, from Hydrocarbon : & Partner. (2016). Dow Chemical Co SWOT Analysis. Retrieved September 27, 2016, from : Finance. (2016, October 7). Yahoo Finance. Retrieved October 9, 2016, from The Dow Chemical Company (DOW): 1: Dow Chemical Company: Divisional Organizational StructureType 1Type 2Type 3Type 4Organizational complexityBlob Tall FlatSymmetricConfigurationSimpleFunctionalDivisionalMatrixEnvironmentCalmVariedLocally stormyTurbulentStrategy typesReactorDefenderProspectorAnalyzer with innovationOrganizational goalsNeitherEfficiencyEffectivenessEfficiency and EffectivenessTable 1: Organization Complexity3429000364490DOW00DOWFigure 2: Vertical vs. Horizontal Differentiation ................
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