Strategic and organization Change at Black & Decker - Essay Example

The purpose of this report, is to pursue the question as to why did it take Black and Decker two decades to effect a change in strategy and structure. Black and Decker have been primarily known for power tools .It has been one of the older multinationals initially with operations in Canada and Britain. The company has two well known brands, the Black and Decker Consumer Power tools, and Professional power tools. . Black and Decker have been selling in 100 nations. Revenue has gone in excess of $5 billion, more than half of which the company has been able to generate outside the United States.

The company has grown rapidly, and has also been able to make name and create monopoly Share in the consumer and professional power tools market. This monopoly has been based on the handheld power tools. Black and Decker have also significantly grown in the international markets. The company has been able to achieve this by setting up wholly owned subsidiaries. The company has 23wholly owned subsidiaries in foreign nations and two joint ventures. Black and Decker during its rapid growth phases, and also during its international expansion period, have functioned with 'decentralized' form of organization.

Each subsidiary has been given considerable autonomy to run its own business. But it is then observed that in the mid 1980's competition emerges in the form of 'Nakita','Panasonic' and Bosch. The Black and Decker's monopoly beg. Factories have closed down. Particularly, in Europe. Globalisation remains a key strategy for Black and Decker. This is highlighted in their Annual Report in 1985. Also in 1985 the company made sound progress. The company have been designing and marketing products for the worldwide market instead of just the regional ones.

Design Centers, created by Black and Decker have promised to deliver more global products in the future. Because of these design centers, Black and Decker has cut on the number of R&D's it had. Major decisions regarding where to produce have all been made in the corporate head quarters. The autonomy of the factories also has been decreasing significantly. The national subsidiary is still maintained a fair degree of autonomy.The Black and Decker companies have been competing each other. Black and Decker have recently announced a restructure initiative.

The Effectiveness of Black and Decker's decentralized, rationale, management style during the earlier years of growth in power tools market is most evident by the fact that their revenue had an excess of $5billion , they were expanding well nationally and internationally . By , setting up of wholly owned subsidiaries , giving them considerable amount of autonomy , accepting and realizing , that globalisation was upcoming , they needed to be apart of this and so they setup design centres . In order, to achieve the targets, of producing global products in the future.

Looking at the not so effective side of this sort of decentralized Organization. We then observe, in the long run, as competition rose, Black and Decker started eroding from the market. The two very famous, brands had to see tough competition on hands. The factories were closed down, particularly in Europe. National subsidiaries on