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Problems Facing MEGlobal and their Possible Solutions
MEGlobal is a Dubai-based company, which specializes in the production, sale, and distribution of monoethylene glycol (MEG), and diethylene glycol (DEG), which are used in the manufacture of various products, such as polyester resins, solvents, coolants, films and fibers, among others. In its initial years, MEGlobal performed well in the market, and emerged the second most successful company in the glycol (MEG) and diethylene glycol (DEG) market, replacing Saudi Arabia’s SABIC, which had previously held this position (Hayes 1). MEGlobal has experienced lows and ups in the market. However, in 2011, this company registered its best performance in the market. The company sales were high, thus resulting in great profits. Despite this, MEGlobal is still faced with different problems, which have prevented it from achieving stable performance in the market. This paper therefore, addresses some of the problems MEGlobal experiences, and the possible solutions to these problems.
The main challenges of MEGlobal have their roots in the management of the company. MEGlobal is a joint venture, therefore, this company, like many other joint ventures, has experienced considerable obstacles, which have influenced the company negatively. Dow Chemical Company of the United States and Petrochemical Industries Company (PIC) of Kuwait own MEGlobal jointly. In 2004 when the joint venture was formed, Dow contributed technology and expertise, while PIC contributed finances. Once the joint ownership documents were signed, MEGlobal began operating as a joint venture. During the initial period of this joint venture, great profits were realized. However, after considerable period, these profits came down (Hayes 1).
Cultural difference in this company presents a major problem. This problem has been experienced since the initial developmental years of MEGlobal. This joint venture resulted in the integration of employees from the two different countries. These have different cultures, therefore, initially; it was a challenge for them to get along harmoniously without any misunderstandings based on their cultural differences. Employees from Dow had to work with Kuwaitis, while other Kuwaitis were transferred to Canada. Cultures for Kuwait people and Canadians are different, therefore, initially, it was hard for the employees from different cultural backgrounds to coordinate and cooperate. For a company to succeed there must be a coherent culture in the company, which all employees adhere to.
Poor integration and communication in the company during its formation is another factor that presents a problem to MEGlobal Company. When the company was formed, there was poor communication with the employees. The employees were not informed of this development, until the last minute. Dow employees were called to the control room, and briefly informed that they no longer worked for Dow, since the company had gotten into a joint venture (Hayes 2). This had a negative impact on the attitude of employees toward their employers. Employees felt they had a right to know about this development in advance, thus concluded that their employer did not put their interests at heart.
In addition, this company faces a major problem with regard to its growth. The growth of this company is considered to have stagnated in its growth. However, the company has enough money, but it lacks any plans for growth (Hayes 9). In addition, the company has enough talented and resourceful employees, who can be used to contribute to the company’s growth. This is a multifaceted problem, since it has various root causes. However, the main cause of this problem is rooted in the management system of the company. Normally, the company’s top management performs the planning for growth and investment of a company. The management must therefore, be strategic in their planning. In MEGlobal, since it is a joint venture, it is hard to reach a final decision-making, due to the fact that there are many parties involved in decision making, therefore, dragging this process.
Furthermore, MEGlobal faces problems, with regard to its size and employee turnover (Hayes 10). This company has a small number of employees, but still experiences employee turnover. This therefore, impacts negatively on the company, since employee turnover results in losses for the company, with regard to the investments the company makes in the employees. Employee turnover in this company is however, blamed on poor career development for the employees (Hayes 10). The company also does not develop employees through promotions. This therefore, would definitely drive away employees.
In order to restore success and competitiveness in MEGlobal, this company should adopt various strategies, which will help to restore it. First, the company must adopt a corporate culture for its employees. This is a good way of addressing the various cultural differences of its international employees. The company has failed to address this issue, therefore, barring successful interaction among employees.
Additionally, the company must develop an effective human management system. This will help in resolving most of the problems the company faces, with regard to human resources. This will help in prioritizing employee development in order to reduce employee turnover, which is costly to the company. Furthermore, Dow and PIC must agree on how major decisions in the company will be handled. These two own the company, thus should agree on specific strategies, which will allow for the growth of the company. This will help to address the company’s growth problem.
In conclusion, MEGlobal is a joint venture, which experiences problems, just like most other joint ventures. Therefore, the main solution to these problems is for the two companies that own MEGlobal to strategize on how the company will achieve effective management. When the management of a company is effective, this will address most challenges experienced in the company. This will address issues of employee development, corporate culture, company investment, and financial management, which are problematic in MEGlobal Company.
Works Cited
Hayes, John. “MEGlobal: A Case for Culture.” Gulf University for Science & Technology,
2012.
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