Business Administration Capstone – BUS Affiliation Here 499
Assignment 1 Great Lakes Great Decisions
Strayer University
April 15, 2012

Abstract The Great Lakes Great Decision case is about the social responsibility a company leader would have to face, based on her decision on joining one of the top lead addictive producers Octel & Associates. It narrows down to two questions. Does the company end production of the lead addictive, since there have been added pressure from the environmentalist? Or do she continue for the benefit of the company’s profits and earning? Although originally a gas and oil exploration company, Great Lakes has had it changes throughout the years, since being founded in the early 1930s. Today, there are they are a top lead addictive producer, ever since the purchase of the company Octel in 1997, which in fact never sat well with US environmentalist.

The Case
1.) Perform an analysis of the social / demographic, technological, economic, environmental / geographic, and political / legal / governmental segments to understand the general environment facing Great Lakes. Describe how Great Lakes will be affected by each of these external factors.
The Analysis of the Social/demographic- The primary consumers of the products produced by Great Lakes—especially lead additives—comes from developing/third world countries. Although the case study does not specifically comment on the demographics of these countries or the social status of their people, it is presumed that it affected everyone especially in large populated areas, once the negative effects on lead were discovered. These dynamics, complemented by the fact that most cars in developing countries did not have catalytic converters clearly indicates that social/demographic factors did not adversely Great Lakes. And the numbers appear to bear this out: as of 1996, leaded gasoline comprised 93 percent of all gasoline in Africa and 94 percent in the Middle East. The numbers were 30 and 35 percent Great Lakes were originally only an oil and gas exploration company in the 1930’s. In 1948 when Charles Hale was named the CEO, he made an attempt to change the company into a natural resource corporation. In the midst of the 1950s they sought ought the production of petroleum, but quickly entered the bromine and chemical field. By changing their line of products continuously, the environmental/geographical aspect was affected. It was a change in the type of product they carried and eventually changed their business practices to a more positive outlook. (Hitt, Ireland & Hoskisson 2011) Technological – Technological considerations could have a negative impact on Great Lakes their counterpart countries in which it does business.. Since leaded gasoline use was banned in the United States and most other developing countries, segments of the world’s population—especially environmentalists—have insisted that Great Lakes stop manufacturing lead additives. To date, the company has not yielded to these demands because of the negative impact it would have on its profits as well as its customers who have not made the move from leaded to unlead for their vehicles. Despite its production of lead additives, Great Lakes had indicated that it was committed to environmental responsibility (Hitt, Ireland & Hoskisson 2011)
Economic Segment – This segment shouldn’t have any impact in the way Great Lakes conducts business. However, if the decision was made to convert to lead-free gasoline, the majority of customers would be at loss when it comes to grasping the complex elements associated with making such a transition. The other factor is that refineries in developing countries are often controlled by governments or ruling elites whose financial incentives are to stay with the status quo (Hitt, Ireland & Hoskisson 2011). Long term, however, the economic segment could be of significant concern to Great Lakes. If customers decided to convert to unleaded gasoline on a large scale, Great Lakes would assist (economically) during the transition to demonstrate themselves being respectable corporate citizens both in the United States and abroad (Hitt, Ireland & Hoskisson 2011)
Environmental/Geographic Segments – Great Lakes operations are greatly affected by factors in this segment. Environmentalist had for years campaigned for Great Lakes to cease its production of lead additives. According to (Hitt, Ireland & Hoskisson 2011). numerous reports had chronicled the dangers associated with leaded gasoline including brain damage to children, respiratory problems in the elderly and damage to air quality. Statically in numbers and percentages below are the affects in adult and children that lead has ▪ Lead adversely affects the neurological system, kidneys and the cardiovascular system. ▪ In the adult population, exposure to lead causes elevated blood pressure, hypertension and an increased risk of cardiovascular disease. ▪ Children are most adversely affected by lead exposure. Those between the ages of one and two years of age absorb 40 to 50 percent of ingested lead while adults absorb only 10 to 15 percent of ingested lead. ▪ Children under the age of two and more living in developing countries where lead gasoline, lead paint and other major exposure routes were still common, have blood levels that exceed the World Health Organization standard. The same findings were recorded for 80 percent of children between three and five year old in the same countries. In total, an estimated 15 to 18 million children in economically developing countries experience permanent harm from lead poising, resulting in decreased intelligence, learning disabilities, hearing loss, diluted attention span and behavioral abnormalities. ▪ In the mid 1990 in Egypt where lead gasoline was still being used, airborne lead was responsible for 6,500 to 11.600 heart attacks, 800 to 1,400 strokes, 6,300 to 11,100 premature adult deaths and some 820 infant deaths annually (Hitt, Ireland & Hoskisson 2011). Factors in the Political /Legal/Government Segments has always had negative effects on Great Lakes and their business practices. When founded 1930, the flag ship product on its inventory—were always lead base or had lead additives—were being doomed as hazardous. The National Lead Company in 1921 admitted that lead was poisonous. Three years later in 1924, 15 workers at refineries in New Jersey and Ohio died from exposure to tetraethyl lead. Throughout that decade, experts spoke out about the dangers of lead in gasoline production and fumes. The U.S. Surgeon General in 1925 temporarily halted the production and sale of leaded gasoline, but the use of lead in gasoline continued. Since those days, individuals and assorted bodies in the political/legal and government segments worked virtually nonstop to rid world of leaded gasoline. The United Nations in the 1990s called for a worldwide phase-out of leaded gasoline. In 2000, the European Union banned its use completely (Hitt, Ireland & Hoskisson 2011)
Great lakes intention was never to be a lead additive producer; they purchased Octel, because they had the capacity of producing bromine. They would use this product to produce other products. When reports were being outlined about the dangers using lead gasoline, Great Lakes had to change their political stance. Eventually they no longer had the ability to hide and producing lead needed to end. Great Lakes needed to be dedicated to environmental accountability. (Hitt, Ireland & Hoskisson 2011)
2.) Analyze the lead additives industry in the U.S. using the Five Forces of Competition Model. Describe the impact of each of the five forces on the industry and based on this analysis, determine if the industry is attractive or unattractive. The five forces of competition model consist of the external environment, attractive industry, strategy formulation, assets and skills and strategy returns. The ultimate end of the strategy is superior returns. (Hitt, Ireland & Hoskisson 2011) According to Hitt, Ireland, Hoskisson (2011) by looking at the external environment which is the general, industry and competitor environments were impacted because of the change. No longer was a need for lead based products. The lead based products were no longer attractive to the industry because they posed a danger to the health of the public. Both adults and children were affected by the toxic lead based products. In adults the products caused high blood pressure and the danger of cardiovascular disease was increased. In children more than 15 million children suffered from hearing loss, reduced attention span and behavioral abnormalities just to name a few. (Hitt, Ireland & Hoskisson 2011) The industry was affected because Great Lakes had the ability to tap into new markets for the Octel Company. Great Lakes never t intended to be a lead additive producer, they wanted to use the product for color stabilizers and fire retardants. Although the CEO in 1977 wanted to capitalize on Octel’s unique saltwater bromine-extraction process according to (Hitt, Ireland & Hoskisson 2011). The strategy for such an attractive industry was to expand their services to other areas. By doing so, they were able to increase their profit from the $50 million in revenue in 1997 to $1.8 billion in sales by 1993. Great Lakes had a plan on how to acquire more money and increase their profit margin with the purchase of Octel. In return, Octel was an acquired asset that allowed Great Lakes to receive superior returns. The skills that were needed began with a CEO, Emerson Kampen in 1977 who was able to see a vision. Under his leadership he turned the company into a multinational success. (Hitt, Ireland & Hoskisson 2011) The firm’s strengths and success stemmed from great a leader who had a vision of success and was not afraid to venture out. The acquired assets such as Octel eventually became their success as well as the company’s skill set to handle the critics over a long period of time. Great Lakes wanted to continue to protect not only their employees but everyone whose health and safety may have been at risk. Ellie Shannon the company’s division manager used her skills to look at the company’s policy operations states Hitt, Ireland & Hoskisson (2011). The company would continue to supply lead additives to developing countries, the product would still be in demand and there was very little competition. Great Lakes could stop selling leaded gasoline and not indulge in the negative aspects. This option would allow the company to save their reputation but financially it would be detrimental. Lastly the company had the option to work with a five year plan of getting out of the business; however it would create additional work for the company to get developing countries’ to change their policies and use start using unleaded gas. (Hitt, Ireland & Hoskisson 2011)
3.) Describe who Great Lakes’ immediate, impending, and invisible competitors are and how Great Lakes measures up against these competitors. Fortunately, Great Lakes had no real competitors. With the ban on the use of lead-base gasoline in the United States, most other major producers had discontinued making tetraethyl lead (TEL). And while lead gasoline was banned in the United States, it was still in very high demand in developing countries. This situation enabled Great Lakes to enjoy a virtual monopoly in the industry, controlling about 90 percent of the market (Hitt, Ireland & Hoskisson 2011)
Variety of retail and industrial products and was particularly important as a fire retardant additive in textiles and plastics. Towards the end of the 20th Century, Great Lakes developed and produced a wide range of specialty chemical products for such applications as water treatment, specialty household cleaners, flame retardants, polymer stabilizers, fire suppressants and performance chemicals. Among the company’s products were: methyl bromide, used in agriculture; clear brine fluids for oil drilling; bromine-phosphorus and antimony-base flame retardants and synergists; and fluorine specialties for automotive component systems. The company’s greatest capability however was in the tetraethyl market (Hitt, Ireland & Hoskisson 2011) One of its subsidiaries, Octel Associates, annual produced more than 40 million pounds annually (Wiki, 2010).
4.) Describe the main capabilities of Great Lakes. The main capability of Great Lakes was their ability to offer a variety of products. Great Lakes not only offered gas, but they also offered a number of various different specialty chemical products such as water treatment chemicals, specialty household cleaners, flame retardants, polymer stabilizers fire suppressants and performance chemicals states Hitt, Ireland & Hoskisson (pg 155). Their businesses savvy lead them to acquire Octel Associates which allowed the company to grow and increased their financial status. Great Lakes did no fear taking on a challenge that could have back-fired due to the public’s feelings about lead based products. They had a great CEO that saw a vision of where the company should go and strategically placed them at the top of their industry. According to Hitt, Ireland & Hoskisson (2011) they took control before they were regulated by the government. (Hitt, Ireland & Hoskisson 2011)
Analysis
Great Lakes made a business decision that proved to be beneficial to the companies long running success. The CEO and employees welcomed the change and accepted with a positive outlook; hence this is what made them successful. They took responsibility sociably and economically, and kept their shareholders into consideration. Elli Shannon had a job to do and it was important to the company as a whole that they remain a well respected corporation.

References
Great Lakes Chemical Corporation. (2010 December 24). Retrieved April 13, 2012, from http://en.wikipedia.org/wiki/Great_Lakes
Hitt, M.A., Ireland, D.R. & Hoskisson, R.E. (2011). Strategic management: Concepts and cases: Competitiveness and globalization (pp .156-159).
Hitt, M.A., Ireland, D.R. & Hoskisson, R.E. (2011). Concepts and cases strategic management, competiveness & globalization (9th ed). South-Western Cengage Learning