Decision Making At Dow Chemical

Decision Making At Dow Chemical

The Dow Chemical Company is a leading global science and technology company that creates, manufactures and markets an assortment of chemicals, plastics and agricultural products and services for customers in over 150 countries around the world. "The Company's 50,000 employees share this mission: To constantly improve what is essential to human progress by mastering science and technology ," according to Dow Chemical. Dow Chemical is, by far, the world's largest chemicals producer, with $28 billion in annual sales, generated by some 3,200 products and services. Dow's basic products enrich consumers' lives in markets ranging from "food, medicine, personal care and water purification to transportation, construction, publishing and electronics1". In nearly a decade, Dow has reshaped their corporate strategy around and focused on their inherent strengths, which is core chemicals & plastics-manufacturing operations, while at the same time reducing infrastructure debt through divestiture, expanding its market share through acquisition, and building new strategic alliances in the global market. The main catalyst behind this transformation was former CEO William Stavropoulos. In changing the strategy of the company, Stavropoulos focused Dow on four strategic themes. First, set standards for each of its core businesses. Secondly, increase productivity within the core businesses, "which led to our cutting $2.7 billion in cost ," according to Stavropoulos. Third, focus on company growth within the core businesses. Fourth, change the culture within the company in order to support the strategy. This paper will discuss Mr. Stavropoulos' decision-making style during this time of transformation and how he saw its relationship with the new corporate structure.

William Stavropoulos used a collective - participative style of decision making when Dow Chemical began transforming itself into a leaner, more productive company. According to the Leadership Management Development Center, "collective - participative decision making is when the leader involves the members of the organization ." Stavropoulos encouraged employees to participate by giving their ideas, perceptions, knowledge, and information concerning the new strategic direction that he envisioned. In his interview with Richard Hodgetts, Stavropoulos gave subtle clues about the manner in which the decisions were made in recent years. The style is best characterized as assessments made in a collective group environment, with Stavropoulos using the word "we" in describing the need for change, in the interview.

About five years ago we began looking critically at our business lines. In some of them we were very strong and in some we were not. And because of globalization, technology, and deregulation, if you're not world-competitive in everything you do, you're going to lose in the long term. So we examined all of our products and our businesses and we asked: Where are our inherent strengths? Where can we be world leaders, either today or two or three years from now? And we looked at these things very critically because products and businesses are like children-you love them all and don't want to get rid of them. (Hodgetts 2)

As President and CEO, Stavropoulos is ultimately responsible for the good or bad outcome as a result of the decision to change not only the strategic direction but also structure of the company to attain his vision. The advantages of including some group participation and involvement is especially valuable when employees are negatively affected by the decision. Stavropoulos mentions the change in corporate culture that would be needed as difficult but needed. In doing so, Dow Chemical could ensure the new strategy would be successfully carried out in an ever-changing world.

The decisions that Stavropoulos made during the transformation of Dow affected the corporate structure in a very profound way. In order to become the global leader in science and technology, Dow had to make a fundamental shift in the way they ran the business from top to bottom. As a result, core values were developed by Stavropoulos to help guide the employees into new territory. Dow people, Dow customers, Dow product and services, and Dow conduct were the four core values that Dow adopted to help make it a bigger success. Most important of all were the people. "People are the source of our success ," according to Dow. "We treat one another with respect, promote teamwork, and encourage personal freedom and