Kohler Co. Case Summary

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Kohler Co. began as a manufacturer of plumbing fixtures in Sheboygan, Wisconsin in 1883. John Michael Kohler, an Austrian immigrant, who for ten years prior to that, produced farm implements and yard ornaments, started the company. John Michael’s son, Walter J. Kohler Sr. became president and CEO in 1905 after his father’s death. Walter headed the company for 35 years. Under his control, Kohler became one of the leading plumbing fixtures manufacturers in the country after introducing numerous innovations. One of the major progressions included manufacturing electric generators starting in the 1920s, which proved very successful. After Walter’s death in 1940, his half-brother, Herbert Kohler, Sr. took over the company. When he died in 1968, the first non-family member took over: Lyman Conger, a vice-president and Kohler Co. veteran. A member of the Kohler family took back over as CEO and Chairman in 1972: Herbert, Jr. He furthered development, diversification and international expansion in his reign. The company’s mission statement was “improving people’s sense of gracious living” through its products and services. This brought together “the Kohler family of business.” Their diversification and international expansion brought significant revenue growth. They had four groups of income segments: kitchen and bath, power systems, interiors, and hospitality and real estate. Kohler Co.’s private status made it so successful. Because of this, it was able to take a long-term view of development and make investments that may have been difficult to justify in a publically owned firm. As a private company, Kohler was not required to disclose its financial results. This worked to the company’s benefit because they believed such disclosures gave away too much information to competitors as well as undermine the firm’s commitment to its mission and long term development. They believe that “private ownership and privacy of results help focus [their] people on implementing big...
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