Specialty Medical Chemicals (Case Review)

Specialty Medical Chemicals is a company that deals with medicine but doesn’t deal with the customer.  They deal with the medicine making companies.  Carl Burke, in 1997, became CEO for SMC in a non-traditional way.  Instead of someone inside the company being promoted to CEO the company decided to hire a firm to locate and find him.  This right off the bat, in my opinion, puts a boundary between him and the other employees.  Non the less in his first couple months with the company he had it in his mind to learn everything about the business that he possible could; from the ground up.  His first response was that he was concerned about where this company was headed. He realized that this company was 20% bigger than his old company but his old companies market capitalization was four times as large as SMC’s.

His review of the company was to understand three main things:  the business, how it works, and the people.  He came to realize that the company did a fantastic job with the existing customers but didn’t really do much to find new ones.  His basic assessment was that the reps didn’t want to spend the time to form these new relationships.  From this he came to the conclusion that they need to figure out how to “tap into new markets”.

The upper management was working but was working poorly at best.  They each run their individual part pretty well but with each of them is reluctant to help the others in their areas.  Not only that the reviews are all a joke.  The reviews are tailored to help them get paid higher and aren’t used in constructive criticism.  The people in the company need to be more straight up with each other.

Carl decides to seek outside help.  He talks to the agency that hired him and is pretty upset that they put him into this situation without letting him know more about it.  They decide to hire Laura Wells to come in with an outside view and help the company.  Her plan is to test and to get to know all the upper management very well and to sit in on many meetings to get a feel as to where these people are.  She is also going to asses Carl in order to gain the trust of the others and to show that the company as a whole is being looked at and that no one is pointing fingers.

After the assessment was done it clearly painted a picture for Carl as to what he should do.  He wants to reorganize the company into three business units.  This is a great idea if anything else just to mix things up a little.  It will create more initiative for the managers to perform.  This also will create each little entity to work entirely as a team.  It also allows Carl to put the people in charge that should be and with Laura’s help these people can be taught what their strengths and weakness are and can work on them.  This will help the company as a whole because they each will be involved in all aspects of the company as opposed to just one discipline, say for instance just finance.  The managers, in order to run properly, will have to look at every aspect of their own unit.  This will also create a community effort in the company in that everyone will be able to talk about issues with the others without fearing criticism.

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