Caso Harvard

9-594-056

REV: DECEMBER 1, 2003

JOHN A. QUELCH

Bausch & Lomb: Regional Organization

Daniel Gill, chairman and chief executive officer of Bausch & Lomb (B&L), a diversified

multinational with sales of over $1.7 billion in 1992, believed that a change in organization structure

was necessary to guide the further growth of B&L’s international business. Despite a compound

annual revenue growth rate of 17% since 1986 and an average return on sales of almost 10% over the

same period, several internal problems had arisen that Gill attributed in large part to B&L’s current

organizational structure. The challenge was to manage B&L’s rapid growth through an organization

structure that would respect the company’s core values of autonomy and decentralization.

In 1992, Gill was considering creating an international organization structure based on three

geographic regions: Europe; Asia/Pacific; and Western Hemisphere. However, he wanted to be sure

that the organizational change would resolve the problems that had arisen, add value to customers,

and enable the company to sustain a compound annual growth rate of at least 15%.

Company Background

In 1853, John Jacob Bausch, a German immigrant, opened a small optical goods store in Rochester,

New York, and discovered a hard rubber called Vulcanite that could be used to make spectacle

frames more durable and at lower cost than the metal and horn-rim frames then currently in use. By

1903 the company had added microscopes, binoculars, and telescopes to its eyeglass business and

expanded its sales network and manufacturing capabilities. In the 1920s, B&L was asked by the U.S.

government to develop an absorptive glass to help pilots overcome harsh glare conditions; the

result—Ray-Ban sunglasses—quickly became a profitable business. Over the following three decades

the company went public and developed several breakthrough optical products such as the Oscarwinning Cinemascope lens. Diversification via small...