July 25, 2011
Kimberly Clark (K-C), the consumer products company, has become a market leader in the majority of Latin American markets. Its dominance is attributed to the fact that, unlike its competitors, the company is organized regionally, which allows responsiveness to its customers and more empowerment to the regional teams, giving K-C advantage over its competition. (Anderson) K-C's Andean region stands out among the Latin American regions because of its performance as well as because of the leadership and management style of Sergio Nacach and the culture that he has put in place in the Andean region. The culture that exists within the Andean region and Sergio Nacach’s leadership and management styles have caused K-C Latin America to request this assessment and set of recommendations to try to address the challenges that the other regions might face in trying to replicate the Andean region's and Sergio Nacach’s successes and to ensure the continued success of the Andean region, especially if Sergio Nacach were not there, due to promotion or getting a better offer from a competitor. There are several key issues that will face K-C as they assess the strengths and weaknesses of both Sergio Nacach and the culture that he has put into place. The issues that will be analyzed are: what elements of the culture, if any, are transferable to other regions within the company; how much of the culture is country specific and how much of it has been built based on organizational norms which are most likely to be transferable; what are the elements that need to be focused upon when looking at building cultures in different regions; what unifying set of company values need to be present in all of those regional cultures. This assessment recommends that K-C implement a hybrid approach, blending Sergio's transferable knowledge with country culture specific practices. PROBLEM STATEMENT/KEY ISSUES
Sergio Nacach, after running Kimberly-Clark’s (K-C) operations in El Salvador was moved to head the operations of the entire Andean region. He has produced impressive results with his unique organizational culture and people oriented management style. However, in spite of Sergio’s achievements, corporate senior management questioned the sustainability and adaptability of Sergio’s management styles to other regions of K-C’s operations. Sergio’s management style was well suited to the Andean region but with obvious differences among regional cultures, it can be challenging to apply one management style to all. Thus, it is important to understand which characteristics of the Andean culture and Sergio’s management styles contributed to the success and which are management best practices are transferable. With this set of transferable best practices, a leader without Sergio’s management capabilities and style would also be able to lead their region to success. The key issues discovered for K-C are as follows which are addressed through this paper: - Ensure that K-Cs growth in the Andean region is sustainable, and in that process create a team of future leaders and managers who can lead the Andean region in the absence of Sergio, thereby also addressing K-C management’s concerns regarding having a succession plan in place. - Analyze and understand Sergio’s management style to come up with a set of core values and best practices which can be taken to other geographies of the company i.e. beyond the Andean region. - Create an organizational culture and structure that fosters and encourages employee empowerment, thus creating a management style which allows leaders to adapt to and take decisions as required by local needs and cultures. SUPPORTING ARGUMENT
At the macro level, the Andean region reported impressive growth numbers with a 24% revenue increase and 50% operating income increase (Table 1). However, as we look...