Case 27 3M Company
Part 1
Minnesota Mining and Manufacturing Company (3M) is a multinational conglomerate company in the United States that operates in healthcare, industry, consumer goods, and worker safety. The company was started in 1902 and is based in Minnesota, United States. The company grew successfully until the 1990s when problems began arising. The following factors may have contributed to these problems.
By the 1990s, the company had stopped creating blockbusters. The company could not develop new technologies as their resources were thinly distributed over many opportunities, thus decreasing the funding allocated to the many Research and Development projects. Decentralization contributed to duplication of manufacturing, Research and Development, and marketing functions in the organization. Duplication increased the cost of production and the underutilization of economies of scale. The company was not successful in improving its operational efficiency and productivity due to its unwillingness to adjust its culture and structure.
Questions
- Why was less funding directed to Research and Development projects?
- The financial crisis at the company
- The company focused on too many R &D projects thinning the funds allocated to them.
- The R &D projects were not on the priority list of the 3M company.
- The innovative culture at the company had died.
- What was the main aim of decentralizing the operations of the 3M company?
- To diversify the innovative culture in the company.
- To increase the sales of the company’s products.
- Lack of trust in the central leadership
- To reduce operation costs.
Part 2
The 3M company continues to rip big during the COVID-19 pandemic, with its N95 masks placed on the top of Wall Street rankings. The demand for the respirators continues to surge, with the company set to produce 2 billion N95 masks before the close of the year (Staff, 2020). The sales from 3M’s healthcare unit have registered a 25.5 percent jump and account for 25 percent of the company’s total sales. The industrial unit grew by 6.9 percent on sales, while the transportation and electronics unit dropped by 7.4 percent (Staff, 2020). The company’s operating expenses increased by about 8 percent as of 30th September. Its net sales rose by 4.5 percent to $8.35 billion as the net income fell to $ 1.41 billion.
References
Staff, R. (2020, October 27). 3M profit beats on healthcare boost; says demand for N95 masks to continue. IN. https://in.reuters.com/article/us-3m-results/3m-profit-beats-on-healthcare-boost-says-demand-for-n95-masks-to-continue-idINKBN27C1GJ