Corning Glass Work Case Study

1811 Words May 25th, 2013 8 Pages
CORNINGS GLASS WORKS CASE STUDY

1. Enumerate the conditions why Corning had to undergo the series of structural changes.

Following the international growth and expansion of Corning, the following problems were being faced in the organization’s structure and management processes:

i) With the international expansion of CGW, the company was becoming too big and complex to be managed by its current structure. Hence a need was felt to create the international arm as a separate legal entity and hence Corning International Corporation (CIC) was born.

ii) CIC was created as a subsidiary to CGW to emphasize the growing importance of Corning’s overseas business. The management felt that the creation of CIC as a
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vii) Furthermore, the capital allocation process also changed following the majority shareholding in foreign subsidiaries. Before the consolidation, the decision process for capital allocation was done primarily by the local managers of the foreign affiliate, who would then go out and raise the capital on their own.

However, after these subsidiaries were acquired by Corning, they were required to submit a formal capital appropriation request prepared in English. The subsidiary general manager then had to chase it to the end through a series of corporate decision making filters. This allocation system had other major implications on the relationship between the technical personnel on each side. Whereas before, the technical managers from the parent company provided assistance to subsidiaries on projects, the former now became a part of the judge and jury system to decide on the capital allocation to these subsidiaries. As a result, the technical managers tended to become more conservative with their advice and assistance to the subsidiaries. viii) Due to the incoherency of its area based organization structure, CIC found itself grappling with the global marketing coordination necessary for some businesses. There was no one who was responsible for coordinating between different foreign subsidiaries on global actions like price, product, sourcing etc. The needs of global product development were not being communicated to the R&D

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