3M's Organizational Culture
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Case Details:
Case Code : HROB022
Case Length : 14 Pages
Period : 2001 - 2002
Pub Date : 2003
Teaching Note : Available
Organization : 3M
Industry : Mining and Manufacturing
Countries : USA
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Inventing 3M
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In 1902, five businessmen founded Minnesota Mining and Manufacturing (popularly
referred to as 3M) in Two Harbors, US. The new company was in the business of
mining corundum, a mineral best suited for making sandpaper and grinding wheels.
In 1904, when an artificial abrasive replaced corundum, 3M decided to
manufacture sandpaper.
Edgar Ober (Ober), one of the founding members of 3M, approached his friend
Lucius Ordway (Ordway), a successful businessman for funds for the new venture.
Ordway agreed to invest $25,000 in the company, on condition that he won't be
involved in the day-to-day affairs of the company.
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However, by 1906,
Ordway had invested around $200,000 in 3M and had become involved in the
day-to-day affairs of the company. In the same year he became the President
of the company.
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When 3M realized that the corundum owned by it was a
low-grade anorthosite, it decided to shut down the mine and shift to
Duluth in 1905. In the same year, 3M decided to import garnet5
from Spain. 3M received its first shipment of garnet in 1907 and
started producing sandpaper. By 1911, 3M reported sales of $212, 898
and in the same year Ober appointed William L. McKnight (McKnight),
who joined the company in 1907 as assistant bookkeeper as sales
manager.
In 1911, 3M brought out its first breakthrough product, Three-M-ite
cloth. Three-M-ite became the company's first profitable product.
The Carborundum Company, which had developed artificial abrasive
coated emery cloth before 3M, filed a patent infringement suit
against the company. |
3M hired Paul Carpenter, a Chicago based lawyer and expert in
patent law, and won the case against Carborundum. Due to Three-M-ite's success,
3M became debt free and announced its first dividend of 6 cents per share in
1916. In the same year, McKnight became vice-president.
In the 1920s, 3M recruited people with diverse backgrounds and expanded its
product portfolio. It also introduced two breakthrough products, waterproof
sandpaper and Scotch masking tape, invented by Francis Okie (Okie) and Dick Drew
(Drew) respectively. In 1922, 3M entered the English market and reported sales
of $68,000 in the first year of its operations. In order to consolidate its
presence in global markets, 3M established research laboratories, and a sales
and marketing network across Europe...
Excerpts
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