For the past year and a half, Lexington Labs has been experiencing a decline in sales and revenue. The company's chief operating officer, David Martin, would be holding an upcoming meeting with his senior sales executives. He wants to tackle how the company should be making local knowledge global across its offices worldwide in line with its goal of being a one global company.
Harvard Business Review (96302X-PDF-ENG)
May 01, 1996
Case questions answered:
- What are the problems in this case?
- How can the company tap on the power of local knowledge?
- How can this multinational team overcome challenges in their communication?
- What should they do so as to have effective teamwork?
- Why are such issues occurring in the first place?
- What solutions would you offer to the problems you determined?
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Case answers for Making Local Knowledge Global
For the past year and a half, Lexington Labs has been experiencing a decline in sales and revenue. The company’s chief operating officer, David Martin, would be holding an upcoming meeting with his senior sales executives. He wants to tackle how the company should be making local knowledge global across its offices worldwide in line with its goal of being a one global company.
The main problem with Lexington Lab resides in its internal practices. Instead of pushing for a group decision-making techniques, this company is practicing miscommunication between relevant global offices. Additionally, it fails to offer feedback to one another and forgets to follow the values they initially started with. Instead, low cohesiveness and an overboard office decentralization is present.
This company focused on the global expansion and the initial success of the company. It was so focused on this that they lost sight of the changing trends in the worldwide market, i.e., they pursued a wrong strategy to maintaining a strong position in the pharmaceutical market, which led to a humongous decline in sales and payment shortages.
Lexington Lab (with its matrix structure) failed to acknowledge the malfunctioning of the independence they gave to every office. It is quite understandable that because of their existing dominant organizational culture, they value freedom so much, but the said move has caused a break of cohesiveness between offices. They do not communicate, and every effort that Martin has tried, such as survival courses, has not produced any valid outcome.
Martin has apparently forgotten that these offices are in different countries, where diversity is present and has pushed offices to create their own group norms (they follow different strategies). So, how could a culture created for one work for sixty globally? His main dilemma is in making local knowledge global.
This strong culture of decentralization explains why offices do not work, as a whole. This also results in harder communications or encounters between them.
Although the aforementioned situation corresponds as unfavorable, Lexington’s status quo will change. The situation will be resolved when Lexington initiates negotiations between offices by following certain steps.
Martin needs to start a negotiating process with country leading offices. He should focus more not on resolving a conflict. Rather, he would have to help negotiate a common strategy to bolster their presence in the pharmaceutical market. This method will become the intergroup strategy of ideas and information sharing.
Martin needs the office representatives close to him. Since these people were appointed to those positions, it shows that…