A subsidiary Initiative at Bayer MaterialScience North America;

This is a case study, you need to answer 3 questions.

322 “”313 CORPORAH LEVEL srRAItGlES
I Case Discussion Questions
r and head count by 30% It actually overdeliveredf; 3:13:
$60 million of the $70 mllllOn allotted for growt ‘ r has a matrix structure! It has maintal
d around and 1 While Baye r “9’5 93m
Spent By 2010′ BMS NA S sales mneoro ales went ‘ flavor of a geographic area structures What are ma
t l rowth (‘2 5 ‘ . V
l 5213f:2dgugtfirglglr3riall: ybgnom of $2.1 brlern m advantages and email/£22339: of a geographic area
2009) What was more valuable was that some of the structure as Seen m I es ahd disadvama
reorganized processes (such as outsourong transpona’ 2_ what are the adYa?h?fcase, ges of a Watt,
tron), so foreign at the time to BMS, now becal‘ne structure as seen In l ‘ . l
implemented by BMS around the world_ Overall. by 3_ oN ETHICS: While this IS a’successful case of SUbSldlaq
endOrSlng the regional subsidiary’s lnlllallVE, BMS 5 9’9′ initiative, from a corporate or drvrslon headquarters’
bal leadership team took some significant risk. But In standpoint, it is often difficult to ascertain whetherthe
the end, the payoff was handsome. subsidiary is making good-faith efforts acting in the best
interest of the MNE or the subsidiary managers such as Bay3
‘Iy promoting their own self-interest. such as
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CLOSING CASE
A SubSldlal’y lnltlative at Bayer Mat
erialScience North America
Bayel GrOUp is a $50 billion chemical and health care ta
based in Germa’ly‘ Its three main prodUCt diVISlOnSg air: key concepts of the proposal, many of which devuaterl
Bayer MaterralScrence (EMS), Bayer Cropscience and from Bayer’s global norms For examp’ev “ampmmlon
Bayer Healthcarg‘, ,m th’s matrix organization, ea’Ch of Evaabs h’Stoncany deemed by Bayer as a core competence
these_producfiegwggljefszgountry/regional subsidiaries mer: $053859: 11: outsource it, which would allow custo-
ggfjgagialkience North Ara:riac:d(82h€11s1ilge CEO for pmg’ OVER”. Babefrgiggstjriozztimogfis [Exilcifttfrasiefn
Babe. contributing 25% of BMS’ global reven‘ti: $3512 gaitti‘efing‘ige, ln the end, the bold proposal paid off
NA delivered highly respected performance It had strong own word – meeung Wlth $70 million m hand In his
sales growth in 2005 ($3.5 billion, increasing from $2.7 Si
billion in 2004), and suffered a modest flattening in 2006 I was excited, but also scared to death, because

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