Restructuring the Organizational Restructure at Kimberly-Clark

Restructuring the Organizational Restructure at Kimberly-Clark

In 2003, Kimberly-Clark, the maker of paper products including Kleenex, Huggies, and Depends, announced it was creating a radical new structure to shore up underperforming parts of its business by restructuring its products into three categories.   The categories were “grow,” “sustain,” and “fix” – somewhat unconventional categories.   They weren’t devised based on product type, customers, or geographic locations in which they sold, but instead on the perceived strength of the product themselves.
Background
Kimberly, Clark and Company was established in 1872 by four young businessmen, John A.Kimberly, Havilah Babcock, Charles B.Clark, and Frank C.Shattuck.   Based in Neenah, Wisconsin, the company initially manufactured paper, but over the years it began to branch out, broadening into the personal hygiene consumer products area to compete with companies like Procter & Gamble.

In 1978, Kimberly-Clark introduced what would become its top seller: Huggies disposable diapers.   Huggies were an instant hit and soon became the nation’s number-one brand.   In the next two decades, Kimberly-Clark introduced Depends for adults, training pants for toddlers, and merged with Scott Paper, a leading maker of toilet paper and paper towels.   Today, the merged company sells its products in over 150 countries around the world.   In about 80 of those countries, it holds the number-one or number-two spot in the marketplace.

Restructuring Problems
Like many corporate mergers, the merger between Kimberly-Clark and Scott Paper in 1995 didn’t roll out smoothly.   Most of Scott’s senior management team left after the merger, and Kimberly-Clark fell behind integrating the two companies.   The following year, operating income and sales dropped.

Although senior management finally worked through the integration challenges of the merged companies by the late 1990’s, the dawn of the twenty-first century brought new challenges.   Chief among these was the lack of growth in developed countries...

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