Page 4: Thinking global and acting local
In a business environment which is simple to operate within and static, organisations tend to gear themselves towards operational efficiency by standardising operations and management practices. This whole approach is bureaucratic, suited only to mass production companies. At the beginning of the 80s Morgan Crucible abandoned its mass market activities, such as metal melting, in order to focus upon highly specialised niche markets and products. This changing emphasis required a different way of managing the business. It meant running the business through global product divisions with a shift away from centralised control.
This process of change succeeded in creating a business focused upon developing market opportunities through constant product development, based upon the long-standing specialist knowledge, skills and expertise of Morgan’s employees. Emphasis within the Group was upon the introduction of value-added products in rising demand cycles. In fact 20% of Group sales in 1994 emanated from products developed since 1992.
There were many benefits from this approach. The constant search for profitable product opportunities, involves the constant development and tailoring of products to the needs of many separate and distinct markets. This can be contrasted with the marketing of ‘global products’ which serve all markets and assume that needs across the globe are the same. It also allowed Morgan to develop products which related to and build upon the competencies and skills of employees across the Group.
A major feature of the process of change was growth by acquisition and the development of joint ventures. Since 1983 Morgan has bought 90 companies around the world. There has been one strategy with companies only being bought where there was a clear connection by product, market and technology and preferably if there were geographic synergies to be obtained.