The Hanna Andersson Company’s Analysis

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The Mission of Hanna Andersson

Throughout the years, Hanna Andersson’s core mission evolved in order to address the changing values of the local community. The company was originally created with the purpose to sell well-designed and high-quality European-style children’s apparel in the U.S. As the brand grew bigger, the management started paying more attention to sustainability issues. Consequently, the company launched a number of initiatives to support community members and protect the environment, namely HannaDowns which was created to recycle old clothes, and HannaHelps and Baby2Baby programs – for charity purposes. Nowadays, the company’s mission is “a permanent cultural shift at Hanna—working from the inside out—to prioritize diversity, equity, and inclusion on behalf of our Hanna communities and families” (Hanna Andersson, n.d., para 2). In other words, it means that Hanna Andersson seeks to create products for all the children regardless of their color and socio-cultural background. Therefore, it can be argued that the company could effectively adapt to the new social realities several times since the business started operating by seeking to overcome the challenges important to their community.

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Challenges That Family-Owned Businesses Face

Hanna Andersson was initially managed by Tom and Gun Denhart implying that the company was family-owned. In this regard, it is important to discuss which challenges the family-administrated businesses face and analyze the reasons why Tom and Gun eventually had to pass governance responsibilities to Phil Iosca. The first difficulty that these companies encounter stems from the notion that owners may be inclined to appoint their relatives for management positions regardless of the latter’s abilities and skills. As a result, Zellweger (2017) maintains that such behavior leads to increased risks of low competence and free-riding among business leaders. Therefore, this type of firm may struggle to deliver the best strategic decisions to survive and strive under ever-increasing competition.

Moreover, the quality of business-related judgments may be further negatively affected by leadership that is solely concentrated in the hands of family members. Oliveira et al. (2017) support this position using the stakeholder framework, which posits that only by considering the values of all the people directly or indirectly related to the company can management deliver balanced decisions. Thus, such an administration style is strongly associated with a company’s competitive advantage (Jones et al., 2018). On the contrary, failure to acknowledge other stakeholders’ needs may lead to reduced performance.

Finally, the relationship between family members may have a tremendous impact on business governance. For instance, Chandra and Mathur (2017) maintain that harmony within the family is one of the main determining factors in decision-making quality. Therefore, conflicts between family members – either related or not related to work – can negatively affect the whole company. Additionally, such clashes are increasingly possible as the company subordination requirements are most of the time neglected due to existing family ties as members view each other as relatives, not colleagues (Zellweger, 2017). For this reason, effective management can be more challenging for family-owned businesses than other types of organizations.

In the case of Hanna Andersson, it can be argued that Tom and Gun did not have sufficient knowledge of how to respond to new market realities adequately. Indeed, the company’s active growth and development, increased competition, and introduction of online commerce necessitated new solutions that the Denhart family was unable to provide. As a result, the leadership and decision-making functions were transferred to Phil Iosca, who had more expertise in this sphere.

Hanna Andersson’s New Leadership

Although the ownership and administration functions were in the hands of other people, new leaders were consistent with the core values cultivated by Gun and Tom Denhart. Such continuous application of values-based management allowed the company to change and improve but always be true to its beliefs. As evidence of that, the company leaders, including Iosca, Petersen, and Stone, were constantly attentive to the needs of Hanna Andersson’s employees. In order to facilitate changes, managers sought to communicate the necessity of improvements and new methods of work to their subordinates and were always ‘reachable’ to the latter. Therefore, it is seen that as a consequence of such an approach, employees were not resisting the implementation of the changes.

The Company’s Leadership Analysis Applying P-O-L-C Theory

Now, it is suggested to analyze why Hanna Andersson’s management could successfully lead and administer changes using the P-O-L-C framework as this model provides guidance concerning the effective solutions of existing issues. In this regard, Adam Stone’s leadership actions would be investigated as an example. The abbreviation P-O-L-C stands for planning, organizing, leading, and controlling (Andrade, 2020). During the first stage, Stone summoned numerous inventory and operational planning meetings in order to understand and discuss the opinions of various stakeholders before delivering a final decision. Next, the CEO could effectively divide bigger tasks into smaller ones and allocate responsibilities among different teams and employees to facilitate development. Finally, during the leading and controlling phases, Adam Stone and other leaders were constantly interacting with their subordinates concerning the new working methods to ensure better understanding and supervise the overall progress.

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References

Andrade, M. S. (2020). Cross-cutting skills: Strategies for teaching & learning. Higher Education Pedagogies, 5(1), 165-181.

Chandra, Y., & Mathur, K. (2017). Strategic entrepreneurship within family owned firms vs. corporate decision makers: Opportunities and challenges. Nirma University Journal of Business and Management Studies, 12 (01-02), 85-102.

Hanna Andersson. (n.d.). A permanent cultural shift

Jones, T. M., Harrison, J. S., & Felps, W. (2018). How applying instrumental stakeholder theory can provide sustainable competitive advantage. Academy of Management Review, 43(3), 371-391.

Oliveira, J. L., Miranda, S. R., & Mendes-Da-Silva, W. (2017). The process of professionalization and governance in long lived family-owned companies: Advances and challenges. Revista Espacios, 38(13), 4-17.

Zellweger, T. (2017). Managing the family business: Theory and practice. Edward Elgar Publishing.

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