Sealed Air
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Executive Summary
In 1995 Sealed Air Corporation, a world renowned packaging manufacturer, saw the trend toward globalization and realized that some changes were necessary in order to take advantage of the ever evolving global economy. Sealed Air began expanding in Europe in 1972, international sales have become a major contributor to the total sales of the company. Sealed Air has identified its corporate culture as a major obstacle to tackle on its way to becoming a global firm.
Sealed Airs culture evolved over time in the United States, and was characterized by open communication, low level of bureaucracy, autonomy, ethical behavior, a divisional structure, and a dedication to customer satisfaction. The uninhibited flow of information was crucial to the success of the company. Workers enjoyed a great deal of autonomy. A strict code of conduct was clearly stated the companys commitment to having and honest respecting workplace. The”1″ card outlined the company priorities in which customer satisfaction was listed first followed by increasing cash flow and world class manufacturing.
Not all of these cultural aspects transfer overseas. The French saw the “Code of Conduct” has too invading; the push toward World Class Manufacturing as behind the times. The Japanese are not aggressive in their sales or personal relationships. Step one was to refine the company culture policies, starting with an introspective look at the American culture and determine how well it fit with the rest of its foreign entities. Introducing new policies overseas must be done so as not to create too many waves and keep everyones eyes on the big global picture.
Sealed Air Culture in the United States
Sealed Air Corporation, founded in 1960, has a long history in the packaging industry. It prides itself on being the premier world supplier of specialty packaging materials. It is important for Sealed Air to develop relationships with customers in order to create customized packaging solutions. Consultative selling has been a hallmark of the companys selling approach. Over time, Sealed Air developed unique packaging products, such as Bubble Wrap®, AirCap®, and PolyCap®, unavailable from other suppliers. Sealed Air began international expansion in the 1970s when it expanded to England and subsequently throughout Europe. By the mid 1990s Sealed Air operated in 25 countries with 39% of its net sales from international operations. Sealed Air was well aware that the importance of international operations was going to increase over time and significant changes were necessary to plan for the future with a goal to become a truly global company. Sealed Air has been a highly profitable company over the years delivering a return to shareholders of 40% since 1990.
Over time Sealed Air has developed a distinct corporate culture in its United States operations. The culture at Sealed Air is important to management who believes the culture in its U.S. operations is ideal. The culture is designed to limit the feeling of centralization and bureaucracy and is characterized by open communication and low power distance. Since Sealed Air is expanding internationally, management feels the need to proliferate the culture exhibited in the U.S. to its foreign operations. Although Sealed Air has had international operations dating back to the 1972, to become a global company it had to develop a global culture. The values of employees must be aligned with their behaviors. If an employee behaves a certain way only through subordination and not their beliefs, it creates cognitive dissonance. Employees who do not share the companys values will be unhappy and could be a detrimental to the company. Sealed Air realized the difficulties in accomplishing this feat due to the differences in peoples values stemming from their native cultures.
Geert Hofstede, a leading researcher in organizational culture, uses five main cultural dimensions for analysis which are: power distance, individualism, masculinity, uncertainty avoidance, and long term orientation. The culture at Sealed Air is similar to the U.S. culture as seen in Exhibit 1. The power distance at Sealed Air is low and is characterized by an open door policy for communication and a lack of a clearly defined hierarchy. Collectivism is more the trend than is individualism at Sealed Air relative to the U.S. in general. Teamwork is very important and many decisions are made by committee. The masculinity exhibited in Sealed Air is about average compared to the U.S. average. The uncertainty avoidance in Sealed Air is low given the emphasis on sales and their corresponding commission based compensation. Finally, the long term orientation is above average for similar companies. Sealed Air expends much more on research and development compared to their competitors. The industry average is 1% of sales whereas Sealed Air spends 2%. This expenditure suggests a longer term orientation for the company.
To determine the best way to achieve this goal it is important to first define what corporate culture is in order to analyze Sealed Airs culture in the U.S and how it has evolved. Edgar Schein, author of “Organizational Culture and Leadership”, defines organizational (corporate) culture as a pattern of basic assumptions that are considered valid and that are taught to new members as the way to perceive, think, and feel in the organization.
Management has imposed two main symbols to help promulgate the culture which are the code of conduct and the “1” card. The “1” card was laminated and given to every employee. Its purpose was to reinforce the companys priorities. The sign emphasized a commitment to customer relations, cash flow growth, and world class manufacturing. A visual aid such as the card is a constant reminder to employees of goals the company is trying to accomplish. Management wanted the card to engrain company priorities in the employees so that they would take ownership of them. In order for the company to succeed everyone needs to be on the same page.
The code of conduct was described by CEO Bill Hickey as “non-negotiable, inviolate principles” that was “supported by a set of values like openness and trust and how we think about work life, hierarchy, and relating to customers.” This was the heart and soul of the corporation and its values. It begins with an emphasis on ethical standards that employees should uphold to maintain a favorable reputation of the company. It further states that an employee can directly contact the president of the company if there is doubt in any situation. This contact is an example of the