Describe about the Business Decision Making Report for Australian Departmental Store.
The Company for my decision making research is David Jones Limited that trades as David Jones or DJs. This is ab Australian departmental store that is currently under the ownership of the South African Woolworths Holdings Limited. David Jones was founded by a Welsh immigrant, David Jones in 1838. The company has the history of being the oldest and continuously operating store worldwide with its original name. Currently, the company has 39 stores within Australian states. The organization has remained to be the favorite for Australia’s generations’ shoppers (David Jones, 2016). For many years, the organization has dealt with fashion but it’s now diversifying and getting into the food industry. The stores of the company offer men’s shoes, accessories, suiting, grooming products, pants and clothing for men; women shoes, bags, accessories, intimates and clothing for women; shoes for boys and girls and their accessories; skin care, nail, make ups, hair, bed and bath products.
Management Problem Identification
The main problem that David Jones faces is concerns the restructuring of the management. In 2010, Mark Mcinnes, the former CEO resigned from his senior position after he was accused of sexually harassing an employee. The employee took legal action accusing the chief executive officer that he had made unwelcome comments and sexual advances. Paul Zahra was appointed to replace him after the legal battle. Although Mcinnes’ actions were illegal and inappropriate, the former CEO handled the situation in a manner that was positive. He behaved well by resigning and informing David and Jones’ board immediately. In order to avoid management issues, the former CEO should have waited for credibility levels to be restored as the organization awaited a replacement. However, this was not the way that a senior manager was supposed to behave with his subordinates (David Jones, 2016).
Later after Paul Zahra took over, David and Jones underwent a management restructure across every senior management position. This management problem led to a decline in sales within the organization. Earnings of 2015 were much lower than those of 2014. There was 20 percent reduction in profits in the first half. Staggering went on to 40 percent by the end of 2015. 2015 profits were only $100 m while those of 2015 had reached $160 m. These declines clearly indicate that David and Jones has been experiencing a management problem (Ellem, 2016).
The organization has also been left far behind by its competitors both in terms of sales growth and ideas. This is one of the largest development and growth areas. Currently, technology is advancing at a very high rate. It is important that any company that wishes to remain ahead advances as technology does so. However, this is not the case for David and Jones. The company has not yet embraced online/mobile shopping like all sales companies are currently doing. Processes within information technology are supposed to correlate with the objectives of the business and remain progressively adapted to advancement in technology and environmental changes (David Jones, 2016).
Do David Jones stores have the chance of remaining favorite for this and the coming generations?
Designing a Research Program
In order to determine whether David Jones branches have chances of remaining in the fashion industry for long and still maintain its popularity, a research was conducted. Qualitative research method was used in this case. Since the company has been in existence for long, there are a lot of recorded information about the company. This fact led to the design of a research program that mainly sourced secondary data. The research question guided the design of a research program as well as the research itself. The research focused on determining whether David Jones stores will remain popular in this and the coming generations. The organization has recently been undergoing different changes due to problems it faces. The reasons behind its changes is a reflection of the challenges and management issues the organization has been going through.
Qualitative research method was used in this research. The research questions that guided this research did not require extensive use of numbers, making qualitative method to be the most relevant. Secondary data acted as the source of information. These secondary data included peer reviewed articles and journals, books and websites. The process of collecting the information included typing the key words and phrases in google internet search engine and other databases. Some of the databases used included: Academic Search Complete (EBSCO), CQ Researcher, News Bank, ProQuest and Lexis-Nexis Academic among others. Words and phrases that were used for the search included David Jones Ltd., David Jones changes, David Jones transformation, David Jones problems and David Jones decision among others.
A wide range of important information was gathered concerning the company. Most of the changes that have been taking places recently were considered important as they would provide a good idea as to the management problems the company has been facing.
Between 1957 and 1981, David and Jones opened several stores and closing them later due to various reasons. According to Ellem (2016), the Newcastle store opened in 1957 was closed in 2011; the Warrawong branch opened in 1971 was closed in 1986; Wagga Wagga store opened in 1953 was closed in 1971; the three stores opened in 1982 in Northland, Chadstone and Bourke street were closed in the year that followed, 1983; Bon Marche (Perth) that was acquired in 1954 was later closed in 1979; Foy & Gibson acquired in 1964 were later closed in 1978; branch in McKimmons was opened in 1960 and closed in 1994 ('Insight: Brand Health Check, 2014); Marsh & Webster acquired in 1963 was closed in 1981; Boland's branch opened in 1963 was closed in 1984; Wyper Bros acquired in 1972 was closed in 1981; and Stuparts opened in 1977 was closed in 1981.
The company also tried engaging internationally by acquiring 12 stores in the United States in 1974. These did not stay for long as they were closed in 1991. The organization decided to diversify from fashion to foods industry. In 2003, gourmet food retail food chain stores were among other stores that were closed. In 2013, Meyer had approached David and Jones with an intention to merge and the request was agreed. However, David and Jones Company got into a Scheme Implementation Deed with Woolworths in 2014. On July 2016, David Jones opened stores in Wellington, New Zealand (David Jones Opens in Wellington, 2016).
Decision making has been a major challenge for David and Jones. The closure of many branches that have been opened shows how decisions to opening branches were poorly made. Most of the branches did not operate for more than a decade. Some like the three stores opened in 1982 in Northland, Chadstone and Bourke streets were closed one year later after they were opened. The company later diversified into food industry but the branches were closed in 2003 due to the losses that they were making. Some of these losses made individuals in the management level to resign. For instance, Mark Mcinnes who was the CEO resigned in 2010 due to the 6.4% sales decline that were being experienced in 2009. Paul Zahra took over and led the company but he also announced to resign three years later, a move that shareholders could not allow after his good leadership ('Woolworths' David Jones Deal in Limbo', 2014).
The Merge with Woolsworth was a good idea even though the Company had already considered another deal with Myer. The Wellington store is the first international store to be opened by the company over its 178 years of existence. This was a bold move to embrace globalization. This decision to move to New Zealand means that the company’s employees will be meeting new cultures (Limited, 2016). This presents a communication/cultural barrier problem if there is poor management. Even though communication/cultural issue is a problem that is yet to be documented. The findings indicate that the company has had a series of poor decision making. This is a problem that the organization could solve smoothly.
Alternatives Identification and Recommendations to Improving organizational performance
Management issue has been a major issue for the company. Results of the research indicate that poor decision making has cost the company resources that would have been efficiently used in other investments. In order to avoid poor management the first alternative would be to consult human resource firms to provide the organization with managers to replace all the ones in all the branches. New managers would bring new ideas in the organization without being hindered by those who have been within the company for long. Each manager would also want to do the best in their part as they would consider the fact that none of the other managers would take a top position without excellent performance. This would be a good alternative as the organization would receive a fresh lot of management. The disadvantages with this alternative as several. The company would waste more resources while conducting the whole recruitment process. Considering that not all managers perform poorly, more finances would be wasted.
The second alternative would be leave the management as it is and focus on a different problem that is closely related to the management such as the technology issue. Considering the fact that there was a recent recruitment in all top positions in all branches, it would be better to avoid doing it again in order to save resources. A leadership training program should be designed to ensure that the leaders get the right skills required for the company. In this alternative more finances should be used to make customer experience better by improving on technology. The latest mobile applications should be introduced by David and Jones to ensure that customers enjoy purchasing items using technology. David and Jones should also diversify on the products it sells. If the company adds electronics onto its fashion online shop, more customers would prefer to remain the organization’s customers. This second alternative would be the one that I would recommend the organization to implement.
How the problem should be managed
It is apparently clear that if one stops moving, he/she would die sooner. The same principle applies to every organization. Problems will always arise in organizations. In order to manage those problems, the organizations must continue changing in order to adapt to management pressures. The important thing is determining when the organization needs to start the change process. Since management changes have already taken place within the organization, it is now important for the company to focus on other important areas.
There is continuous advancement of technology and it is changing the manner in which organizations are executing their daily activities. David and Jones needs to embrace such technological changes. The organization should use a different strategy in order to succeed in leading the international stores that it has started focusing on. David and Jones should put more focus on improving user experience. The organization should do this by first launching to its customers the most recent and updated mobile applications and sites. The current mobile applications are user friendly and customers can shop as the like so long as the app is available (Kondalkar, 2009).
To remain in tandem with technology, it is also important that the company maintain its market share and try to attract more. The company can do so by increasing the number of items that it trades so that customers can check other things as they shop for fashion. Currently most online shops include most of the items that customers require and at a lower price. A David and Jones’ customer might move onto a different shop if there are more items sold there. Still on technology, the organization should introduce the point of sales system. This will boost the employees by increasing their efficiency and also customer service in a better manner. In addition to advancing technology, training programs would be designed for the Organization’s leadership. A leadership that constantly undergoes training will be better placed to avoid making wrong decisions that negatively affect the company.
'Woolworths' David Jones Deal In Limbo' 2014, WWD: Women's Wear Daily, 207, 124, pp. 2-1, Business Source Complete
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'David Jones Board Recommends Sale Offer' 2014, WWD: Women's Wear Daily, 207, 72, pp. 2-1, Business Source Complete,
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Ellem, J 2012, 'When it's too good to be true, it usually is -- David Jones', Keeping Good Companies (14447614), 64, 8, pp. 455-457, Business Source Complete
'Insight: Brand Health Check - David Jones in battle to stay afloat' 2014, Campaign Asia-Pacific, p. 45, Business Source Complete, EBSCOhost, viewed 7 October 2016.
Limited, D. (2016). David Jones Limited: Private Company Information - Businessweek. [online] Bloomberg.com. Available at: https://www.bloomberg.com/Research/stocks/private/snapshot.asp?privcapid=8180957 [Accessed 7 Oct. 2016].
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