This report analyses and discusses the problems that Natural Beauty Shop faced as a result of the change of management. The report discusses the major problems that led to the sudden decline in the organization which was growing at a tremendously high rate. One of the major problems that resulted in declining of the organization in terms of brand image is the lack of strategic leadership by the top management of the organization. Another problem that resulted to the decline of the company is hiring the top management who had no experience in the industry and the market. The report identifies all the problems that may have resulted to decline of the company and outlines recommendations which can be implemented to solve the prevailing situation. The report also contains an implementation plan. This pan discusses the steps and tactics to be undertaken, who to undertake them, when and where in order to solve the problem facing Natural Beauty Shop. The aim of this report is to advise the owner on the strategic plans that should be implemented in order to rescue the company as first as possible. The report also recommends steps that will be undertaken to win back the trust of customers.
One of the problems facing Natural Beauty Shop is that the company is headed by the wrong team of management. The managing director of the company has had no prior experience in the beauty industry nor in a market that has to deal with consumers directly. This lack of experience has resulted in the managing director together with other managers making irrational decisions which have affected the company adversely. The decision-making process in an accounting firm is completely different from that of firms that are involved in the goods market. The manager was so focused on the financial aspect of the business and forgot the core values of the organization. Over emphasis on reducing costs by the management bore a very big burden on some departments which means that they were not able to run smoothly (Dettmer & Dettmer, 2007).
Another problem that resulted in the decline of Natural Beauty Shop is the sudden and unplanned change in the organizational culture of the company. The culture of the organization determines how people behave and relate to one another in the organization. Organizational culture is very crucial to the success of any organization. Due to this reason, a positive organizational culture encourages togetherness and instills important core values among employees. This helps the employees of the organization to perform to the maximum without close supervision (Bonem, 2011). The entry of Tony Smith as the new managing director of the organization must have caused shivers among the existing employees of the firm since they were so used to Maggie who is hands on and who treasured the culture of the organization. The rate at which Tony started changing the culture of the organization is alarming since he did not take time to learn how the organization works. He imposed his own culture of intolerance and authoritative leadership style on employees. Since many of the employees were so much into the culture of the organization, they resisted this change. Bearing in mind that when the company was starting many employees indicated that they wanted to join the company since they wanted to work with Maggie or were touched by the values of environmental conservation and promoting poor countries, the culture of the organization meant a lot to them. The first step that Tony took that went against the culture of the organization is the change of suppliers of the company (Haropoulou,2013). This was in direct contravention of the core values of the business organization.
The poor interpersonal relationship of the managers with the employees was a significant problem that resulted in the decline of the company. Having a good relationship with junior staff in an organization helps managers to transmit their ideas and vision of the organization to the employees. This is because employees are the ones who help to create value for the organization. The fact that Tony created a hostile environment of not engaging employees in decision-making or listening to their complaints made employees resist the ideas he had for the company. Failure to engage the employees also meant that the manager could not detect where things were going wrong on time and correct on time (Menkel, Scheider & Love, 2015).
Disregard of ethics and professional code of conduct also played a major role in putting the company in this situation. Ethics in an organization govern the way people behave and relate to one another within the organization. The violation of professional ethics began by Tony creating the position of supply chain manager with an intention of appointing his close friend and business associated. This was a very in professional move which caused a lot of friction among employees mostly those who were highly experienced. The behavior of the two while at work is also so nonprofessional to the extent that most employees had noticed that they were more involved in personal affairs than running the organization. Tony and Wallace used to go for drinks during business hours. The two also changed suppliers in order to contract suppliers whom they had a close relationship with. The process of choosing suppliers was no longer competitive and this resulted in the company buying poor quality raw materials which translated to poor quality output.
The removal of store employees bonuses, target bonuses, and other staff motivation bonuses played a big role putting the business in the current situation. The bonuses were a huge motivation for workers to work and become more productive to help achieve the goals of the organization. Removing the rewards means that the employees would have to work more for less and therefore, they lost the desire to work for the company. This brought about the large employee turnover which was experienced in the company (Nakoi & Boateng, 2014). The removal of career development pathway which helped employees working in the company to develop professionally also affected the morale of the employees which in turn affected productivity.
From the above discussion, it is clear that the decline of Natural Beauty Shop was caused by a variety of factors. However, there are some factors which were more influential than others. The following are the two major problems that resulted in declining of Natural Beauty Shop.
The lack of change management in the organization resulted in the unplanned change of the culture of the organization which was met with a lot of resistance from the employees since they were not involved.
The removal of motivational packages which were designed to improve the morale and productivity of employees resulted in a huge decline in productivity and high employee turnover.
Alternative solutions to problems identified above
Generation of alternative solutions to problem one
The new director should take time to understand the culture of the organization before making any changes
Changes in the culture of the organization should be consultative since it affects all stakeholder of the organization.
Change is gradual and does not occur overnight. Therefore, the new management should be patient while implementing change in the organization
The management of the organization should plan for the change and put all the necessary resource to help in implementing the change.
The management should remove the changes brought by Tony and his management team which violated the core values of the organization.
Understanding the culture of the organization before making any changes helps the management in making informed decisions
Taking time to understand organizational culture will also help the manager to understand how employees view the organizational culture (Maacaron, 2015).
It may take a lot of time for new management to understand the organization and hence delaying the turn-around strategy of the company.
The manager may end up being influenced by the negative culture of the organization.
Establishing warm interpersonal relationship between the top management and the employees in order to help in improving unity and togetherness in the organization
Redesigning and improving the career development pathway program to help employees advance their careers.
Organizing seminars and retreats for motivational talks to help fuel the success desire of employees
Re-introducing performance bonuses will definitely improve productivity since employees will be motivated to work more.
It will help the employees of the organization to become more committed to the organization hence reducing employee turnover rate.
The move will increase the costs for the organization. This will be the short term objective of minimizing costs in order to finance the expansion of the company(Tierney, 2008).
The introduction of performance bonuses does not guarantee improved output from the employees. The bonuses may not translate to improved effectiveness among employees hence resulting in a loss by the company.
Establishing friendly relations between the management will help in making communication more effective. Effective communication is very important in decision making by every organization.
Friendly relations between employees and top management will create an atmosphere of trust and togetherness which is very important in improving productivity of individual employees in an organization
It may lead to some employees getting too relaxed and hence fail to execute their mandate accordingly. This will result in a lack of productivity among some employees hence hurting the entire organization(DuPriest,2012).
Very casual relations between managers and their juniors may lead to a reduction in the level of influence and respect between the two groups. This may eventually result in conflicts within the organization.
The owner should appoint a new management team to help turn around the organization. This step will be important in order to bring people whose values and beliefs are in line with the core values of the organization. The new management should be given time to settle in and understand the environment as well as make their own analysis of the organization. The management should consult when they intend to make changes so as to reduce resistance to change and ensure change is implemented successfully (Alas, 2011)
The company should re-introduce performance bonuses and design other types of motivational mechanisms to increase the morale of employees and hence improve productivity. These other measures include organizing retreats to help them relax, engaging in their social activities, supporting the employees during difficult personal moments and improving the working environment of employees.
Duration of implementation
Consulting of stakeholder
Changing the compensation and remuneration policy of the organization
Sourcing of new suppliers
The report deeply analyzes and discusses the problems that faced the company and which resulted to its decline within a short period of time. The problems are clearly listed and elaborated backed up with theoretical evidence and evidence from the case study. The report then identifies all the possible alternative solutions. The solutions are listed and then analyzed to determine the most feasible solutions to the problem Natural Beauty Shop is facing. The advantages and disadvantages of implementing these solutions are determined in order to know whether or not they are suitable. The report contains recommendations that Maggie should implement in order to solve the problems this company is facing.
Alas, J. E. (2011). Organizational decision making: The Fuzzy Front End. Austin, Tex.: University of Texas.
Bonem, J. M., & Wiley InterScience (Online service). (2011). Problem solving for process operators and specialists. Hoboken, N.J: Wiley.
Dettmer, H. W., & Dettmer, H. W. (2007). The logical thinking process: A systems approach to complex problem solving. Milwaukee, Wis: ASQ Quality Press.
DuPriest, L. (2012). Natural beauty: Pamper yourself with salon secrets at home. New York, NY: Three Rivers Press.
Haropoulou, M. (2013). Organizational decision-making and strategic product creation in the context of business sustainability outcomes: Theoretical synthesis and empirical findings : a thesis submitted in partial fulfilment of the requirements for the Degree of Doctor of Philosophy.
Maacaron, F. M. (2015). Natural beauty alchemy: Make your own organic cleansers, creams, serums, shampoos, balms, and more.
Nikoi, E., & Boateng, K. (2014). Collaborative communication processes and decision making in organizations.
Menkel-Meadow, C., Schneider, A. K., & Love, L. P. (2014). Negotiation: Processes for problem solving.
Tierney, W. G. (2008). The impact of culture on organizational decision-making: Theory and practice in higher education.
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