Casual Togs Company’s Management Problem

Abstract

Casual Togs weaknesses are found in its organizational structure, its leadership, adopting change, and the use of technology. The firm has a weak organizational culture that supports neither the organization’s goals nor strategy. The firm lacks a formal employee reward system. It’s quality control is questionable because employees doubt the quality of the products they produce.

Judy, the vice president, lacks the emotional intelligence to motivate other employees. Cy does not play an influential role in influencing organizational culture. The firm needs to use technology to increase the flow of information. The firm can use the dual-authority matrix structure for quick decision making. The firm needs scanning and monitoring of deviation from the budget to prevent problems from becoming too big to control.

Introduction

Casual Togs weaknesses are found in its organizational structure, its leadership, adopting change, and the use of technology. The paper analyses Casual Togs with the aim of identifying strength and weaknesses in its form of management. The objective of the study is to apply concepts found in management studies in forming an opinion about the company’s form of management.

The study begins by identifying the management issues that affect the organization. The firm has a problem with recruiting and managing workers. It may need a formal human resource department to manage issues such as employee satisfaction and compensation.

The firm needs to increase resources directed towards forecasting because its survival is reliant on it. The firm can use an information system that links vertical hierarchies horizontally. The firm may need a liaison to increase communication among departments. The firm needs to modify its organizational culture from emotional outbursts to logical presentations.

Cy, the president, needs to play a key role in influencing employee behavior. In the middle part, the paper looks into Cy’s leadership style. His leadership style combines autocratic and laissez-faire leadership styles. Almost all leaders consult him for decision making. In the last part of the body, the paper examines the organization structure and responding to the competitive environment.

The final part consists of the conclusion and recommendations. The firm needs to create a task force to investigate the issue of returning goods. I have realized that making drastic changes to management may be counterproductive. A firm needs to use a continuous improvement system that runs even when no problems are anticipated.

Management Issues

Recruiting and firing

The firm has a problem with recruiting and firing employees. Managers in key positions are relatives of the president. The president’s sister is vice president, and the president’s nephew is the treasurer. Judy fires employees without consulting their supervisors. The firm should recruit new staff based on some strategy and organization’s needs.

The firm should adopt a “lead the market” strategy when employing employees in the design department. It will complement its branding strategy when it has the best designers. A “lead the market” strategy involves a company paying employees higher salaries to attract the best talents in the industry (Mathis & Jackson 2011, p. 211).

Late delivery

The firm has problems in the making deliveries on time. The source of the problem has not been identified accurately. Various reasons are identified as leading to a big percentage of returned goods. There is a mismatch between dates provided by customers and those entered by employees.

The mismatch can be eliminated by using an information system that allows customers to fill the dates directly to a database that can be accessed by the sales forecast/budget department. The difficulty in production should be reduced by using technology that allows the processing of several lines at the same time.

Bulky printouts

The firm is slow in adopting new information technology. The printouts use a lot of paperwork that could be managed easily if the company used a database that was updated daily instead of printouts. Casual Togs uses computers to process data.

However, it is unable to use computers to make data more accessible. Daft, Murphy & Willmott (2010, p. 100) explain that a firm can increase communication in the horizontal levels of an organization’s structure using information systems.

Casual Togs should use databases to support the exchange of information in the firm. Daft, Murphy & Willmott (2010, p. 107) suggest the use of virtual network grouping. The databases should be accessible through passwords assigned to managers or selected employees in the firm to prevent competitors from accessing advantageous information.

Weak organization culture

The firm needs to modify its organizational culture to manage emotional outburst during meetings. Schein (2010, p. 14) describes organization culture as the observed behavior when people interact. Casual Togs employees’ culture constitutes verbal aggression. The president has to lead through a culture of logical reasoning and supporting arguments by facts.

The meetings should be based on functional problems. The firm needs to develop a formal philosophy to guide the firm’s response to problems and conflicts. Schein (2010, p. 8) cites weak organization culture for communication problems experienced by reasonable people in some firms. Culture is a major stabilizing force, which Casual Togs needs to develop.

Organization structure

Managers in the company do not follow the chain of command in the organizational structure. The vice president, Judy, ignores the department managers when making decisions concerning their departments.

Any department manager can meet the president regarding an effective change regardless of whether it affects his department or not. Managers take time to process information that is not useful to their departments. It leaves them with less time to focus on their departments.

Reward system

There is a need to develop a reward system. Mathis & Jackson (2011, p. 231) suggest that “tying pay to performance holds a promise that both employers and employees find attractive.” Promoting Sol Green and leaving Andy Johnson in the same position did not motivate the sales forecasts/budget manager. Andy has worked in the company for 15 years as a valuable employee.

He has gained competencies that are valuable to the firm. The firm may use the intrinsic rewards, such as praise, which are less costly. Employers need to manage the drawbacks of using the incentive system, such as competition among employees.

Strengths And Weaknesses Of Cy’s Leadership

Strengths

He delegates authority to other managers. When he hired a market analyst, Stan Levine, he gave him the authority to make changes in areas Stan deemed fit. Judy gave instructions on his behalf. Other department heads had the authority to make changes where they considered it necessary.

Cy has the trait characteristic of a good leader. Anbuvelan (2007, p. 229) discusses that the trait approach of identifying a leader’s ability is to look at his enduring quality as an individual. Cy portrays some of the qualities of a good leader such as intelligence, self-confidence, will, and dominance. These are exhibited by his unwavering resolve in making decisions.

Weaknesses

He may have given the authority to department heads to make decisions, but he does not create a climate that allows it to happen. Schein (2010, p. 14) explains that “climate is the feeling that is conveyed in a group.” Department heads are uncomfortable to make decisions without consulting him. It could be because they fear confrontation with Judy when their decisions are not backed by the president.

Cy’s laissez-faire style results in emotional outbursts instead of friendly, logical arguments. Cy uses Judy, who lacks emotional intelligence necessary for effective leadership (Hill & Jones 2012, p. 21). It leaves many employees displeased with her expression. Anbuvelan (2007, p. 234) discusses that unregulated employee behavior is a sign of failure to provide competent leadership. Arguments should be based on facts.

His style of leadership is relationship-based using leadership models and theories (Lussier & Achua 2013, p. 116). Relationship-oriented leadership can be strong if the employees are not relatives of the firm owner. He should adopt a task-based leadership to balance the relationship-based workforce that he has employed.

A leader should play major roles such as an ambassador in conflict management, an advocate in logic and rational persuasion (Galford & Fazio 2006, p. 55). He may also be inspiring people, supporting creativity and fairness.

Cy has failed to develop a stabilizing organization culture rooted in the firm’s goals and strategy. A good leader is supposed to transmit organization culture through deliberate coaching, role modeling, and teaching (Schein 2010, p. 246).

Cy needs to build the firm’s culture by controlling what he pays attention to and what the firm rewards. He should retain people who fit the organizational culture he prefers and fire those who have failed to change (Flamholtz & Randle 2011, p. 56). He should align leadership practices with the culture that he wants the organization to promote.

Suggestions To Prevent Future Problems

Structural change

The firm has two options to increase coordination between departments. One of the options is to spread the departments horizontally under Judy and Cy.

It would reduce the levels of hierarchy that one has to go through before arriving at the final decision. Judy and Cy will also find it easy to coordinate all departments when all departments managers report to them. Daft, Murphy & Willmott (2010, p. 108) discuss that organizations are adopting flatter organization structures to increase the speed of flowing information.

The other option that Casual Togs can use is to use enhanced vertical structures. The vertical structures are enhanced for the flow of information using a computerized information system. It creates a routine exchange of information between frontline employees and managers (Aquinas 2008, p. 144).

The firm can also use a person who plays the role of liaison or a full-time integrator to create linkages between departments and increase the flow of ideas.

The firm can use a task force to find out what is the cause of the returned goods. Daft, Murphy & Willmott (2010, p. 103) suggest the use of teams in areas where the firm needs coordination between departments over a long period. Aquinas (2008, p. 144) discuss that there is a need to balance between differentiation and integration in the organization structure.

The advantage provided by the vertical structure is that departments may choose the sub-cultures that work for them. The department managers can make quick changes that affect only their departments more effectively than changes made in the entire organization. Schein (2010, p. 311) explains that changes made based on certain goals are likely to meet less resistance.

Departments can make such changes more easily than the entire organization. Scharbracq (2007, p. 176) suggests that people will be resistant to change so long as learning anxieties exist. Casual Togs can use vertical structure and training to reduce resistance to change. The vertical structure also allows managers to process only what affects their departments.

The firm has to use either the divisional organizational structure or the matrix structure to match the dynamic nature of the competitive environment. Casual Togs uses the functional structure where departments are formed based on one major function that it performs such as production and shipping (Daft, Murphy & Willmott 2010, p. 110).

The dual-authority structure of a matrix organization combines the vertical structure with the use of liaisons or full-time integrators to facilitate the flow of information between affected departments (Daft, Murphy & Willmott 2010, p. 115). The full-time integrator takes the position of a product manager and coordinates with the vice-presidents of the departments regarding the need for his product.

The product manager plays a role similar to a project manager. Changes in product requirements can easily be notified to the vice-presidents in all affected departments, who respond by making timely changes. Casual Togs problem fits the three requirements necessary for a dual-authority matrix structure.

There is uncertainty in the environment, the pressure to share power, and frequented new products (Daft, Murphy & Willmott 2010, p. 114). Product managers can be responsible for the success of a line of product. They can directly demand the resources they need from the other departments.

Responding to changes in the competitive environment

Casual Togs needs to analyze the competitive environment and the general environment. Some of the changes in sales could have been derived from the macro-environment (general environment). The firm can use PEST analysis in the macro-environment and Porter’s Five Forces to analyze the industry. It may also be necessary to use the SWOT analysis for its position as an individual firm (Henry 2007, p. 70).

Porter’s Five Forces are used to analyze the nature of the industry. The forces to be analyzed include “the threat of new entrants, the bargaining power of buyers, bargaining power of suppliers, the threat of substitutes, and intensity of rivalry” (Henry 2007, p. 68).

Casual Togs is only aware of the threat of new entrants. The bargaining power of suppliers and the bargaining power of buyers enable a company to choose an appropriate profit margin when setting product prices.

Casual Togs could be losing customers as a result of substitutes’ threats or buyers with high bargaining power. Oldroyd (2007, p. 77) discusses that “competitors who supply close substitutes are in a strong position to win customers by offering better value for money”. New entrants are likely to use competitive-pricing and aggressive marketing towards establishing a customer base.

Oldroyd (2007, p. 77) suggests that a firm should “use product differentiation and branding as a natural response to competition”. Branding involves building reputable products that can be sold above average market prices. Oldroyd (2007, p. 77) explains that the dimensions to product differentiation include the product, price, place, and promotion.

The product refers to the product’s brand name, it’s quality, design, packaging, and delivery. The price is the second dimension. It may include offering credit sales and improvement in other terms of payment. There is a need for promotional activities to support building brand names as a third dimension.

The place is the fourth dimension that Casual Togs may use to increase its product differentiation. The firm can target different segments with different products. Oldroyd (2007, p. 53) cites the importance of focusing on customers to meet revenue targets.

Casual Togs needs to ascertain that it produces quality products. It needs a feedback system to measure and analyze customer perception of its products instead of relying on assumptions that returned products are a quality issue. Hill & Jones (2012, p. 88) describe that quality has two dimensions. One is quality as excellence. The other is quality as reliability. Quality as excellence is obtained through the design of the product.

It can also be built through branding. Quality as reliability is when products perform what they are designed to do. Casual Togs usually checks quality. It needs to emphasize value creation by using the excellence dimension of quality.

Casual Togs can use scanning and monitoring to find the source of deviation from the budget. Henry (2007, p. 43) describes that monitoring should be able to track a weak signal of change until its source can be established.

Monitoring tracks the weak signals identified through scanning until they become bigger and more visible. Casual Togs needs tools for analysis and models for scanning their business environment. They can use Smith’s statistical skills for scanning.

Henry (2007, p. 44) suggests the use of scenarios to deal with the unknowable. The unknowable is described as an event in which the cause and effect cannot be established, or it cannot be understood (Henry 2007, p. 44). Developing scenarios will allow the firm to anticipate certain effects.

Based on their frequency, the firm can form its knowledge regarding the unknowable. Scenarios may involve setting a gap between the best case scenario and the worst case scenario. The firm analyzes how often an unknowable outcome approaches one of the scenarios.

Conclusion And Recommendations

Conclusion

Casual Togs’ situation became worse by choosing to make large changes instead of using a continuous improvement process. The firm recognizes the importance of forecasting. It should direct more resources at forecasting because it relies on forecasting for survival. The firm has a weak organizational culture that supports neither the organization’s goals nor strategy. The firm lacks a formal employee reward system.

It’s quality control is questionable because employees doubt the quality of the products they produce. Judy, the vice president, lacks the emotional intelligence to motivate other employees.

Cy does not play an influential role in influencing organizational culture. The firm needs to use technology to increase the flow of information. The firm can use the dual-authority matrix structure for quick decision making. The firm needs scanning and monitoring of deviation from the plan to prevent problems from becoming too big to control.

Recommendations

Anbuvelan (2007, p. 243) discusses that control requires more delegation and decentralization. The firm’s control system should be able to spot the areas of weakness and deviation from the budget early enough to mitigate loss. Control should lay much emphasis on workers rather than the work (Anbuvelan 2007, p. 245). The firm should adopt continuous improvement instead of drastic changes that eliminate people with experience in the firm.

The company has no option but to use Just-in-Time (JIT) to manage its inventory (Saxena 2007, p. 219). The firm has adopted new technology but still fails to meet the delivery expectation. It is noted that the firm has the latest large-capacity cutter and high-speed sewing machines. Forecasting needs to be its main focus. More resources should be directed towards forecasting.

There is a need to develop a quality assurance department that examines and manages product quality standards. Saxena (2007, p. 223) discusses that quality review procedures should be carried out by individuals who are not directly involved with the area under review.

The firm needs to develop a human resource department to deal with issues that arise among employees. Sims (2007, p. 6) describes that human resource management involves forecasting the firm’s human resource needs. The company needs to improve its recruitment process from assigning key positions to relatives.

Schein (2010, p. 259) explains that when organizations have achieved growth, it is necessary to change from hiring family members to hiring people based on their competence. Companies that are considered using fair recruitment and job promotion procedures are likely to maintain talented employees (Sims 2007, p. 254).

Reference List

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