Case Summary of Kohler

Win Thu

BMGT440

Summary of Kohler

1) What is the goal of the company in this case? (2) What are the key questions at issue in the case? (3) What data, information, or evidence from this case do you need to draw from to answer the questions at issue?

Kohler is a well-known maker of plumbing fixtures and a manufacturer of small engines and generators. The company recently had expanded its overseas business operations into 12 different countries and diversified into furniture and luxury resorts businesses. The goal of Kohler Company was to determine the fair market value of its stock because many investors dissatisfied with the price the company offered them to buy back the shares. To avoid the risks and trial dispute procedures, the company decided to negotiate with the investors by reevaluating the fair value of its stocks. The company’s history started since late 1800s. The innovation, true vision and effective leadership of Kohler family’s ancestors, the company developed significantly and the family was well known for its business as well as their charitable enterprises. With the incredible success, the company was lead mainly by the family’s descends and Kohler chose to stand as a private company, rejecting many plans of changing the company’s ownership structure. The CEO, Mr. Herbert Kohler, Jr highly valued the privacy status of the company, disliked the publicity and high price speculation due to publicly trading, as well as feared to put many shares in the hands of outsiders. The Kohler family believed that it had an advantage of developing a long-term plan, keep the management to focus on implementing big ideas, achieving long-term performance, and freedom of financial planning.

However, due to company’s historical achievements and recent development, Kohler’s shares gained higher value over the years and the public ownership of shares grew instantaneously throughout the years. In 1978, the private ownership reached to 400 shareholders and it alarmed the...