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Domtar hiring test

21/04/2021 Client: muhammad11 Deadline: 2 Day

CASE: Taking Charge at Domtar; What it Takes for a Turnaround*

Domtar is the third largest producer of uncoated freesheet paper in North

America. In the decade prior to 1996, Domtar had one of the worst financial

records in the pulp and paper industry. At that time it was a bureaucratic

and hierarchical organization with no clear goals. Half of its business

Chapter 1 Training in Organizations

was in “trouble areas.” Moreover, the company did not have the critical

mass to compete with the larger names in the field. The balance sheet

was in bad shape, and the company did not have Investment Grade Status

on its long-term debt.

In July of 1996, Raymond Royer was named President and Chief

Executive Officer. This was quite a surprise because, although Royer had

been successful at Bombardier, he had no knowledge of the pulp and

paper industry. Many believed that to be successful at Domtar, you needed

to know the industry.

Royer knew that to be effective in any competitive industry, an organization

needed to have a strategic direction and specific goals. He decided

to focus on two goals: return on investment and customer service. Royer

told Domtar executives that in order to survive, they needed to participate

in the consolidation of the industry and increase its critical mass. The goal

was to become a preferred supplier. The competitive strategy had to focus

on being innovative in product design, high in product quality, and unique

in customer service. At the same time, however, it had to do everything to

keep costs down.

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