Free Essay

Airchair

In: Business and Management

Submitted By constance0608
Words 1794
Pages 8
Overview
Cabletronica U.S. is a mature successful cable and wireless company, which had just made an acquisition of WorldFurniture in New York. Through several researches, Cabletronica invested Cushy Armchair in Hong Kong, which strategically related to achieve expanding the scope of operation. Cushy Armchair is the well-known leader in global reclining chair business and has fully autonomous business group in 17 countries. Alison Sampson is the new leader of CA with abundant cable background financial knowledge, who announced new decisions to executives through e-mail after two weeks on the job. However, two months later, she found that no one responded her decisions.

Problems:
1. Senior personnel change
The suddenly senior personnel change is one of the serious problems.At first, Cabletronica appointed Sampson to be the new head of CA, replacing the well-regarded founder, Frances Wong, who was very familiar with the operation of CA. Moreover, the period that Sampson started the appointment was in the busiest time of year, there were a lot of tasks of design and manufacturing to achieve a strong end-of-year holiday sales. The most serious problems were that although Sampson had professional financial ranks and successful background, she did not work with line managers in a manufacturing setting.

2. Communication system
The problem of communication system led to no one responded Sampson’s decisions. It was an ineffective way to announce the important changing of policies to executives through e-mail memorandum, because e-mail is a low powerful communication channel in business communication. Although Cabletronica generally used e-mail to communicate, it was not as well as at CA. While Wong, who was very familiar with the process of CA, indicated that e-mail was not an effective way to announce, Sampson still insisted her own idea. There is a communication problem between Sampson and Wong. However, Sampson indirectly knew that the executives did not follow what she required through communicated with the head of procurement for WorldFurniture two month later.

3. Decision
Sampson made several decisions, but there were some problems. At first, Sampson made decisions only after two weeks on the job. The efficiency of decisions was questionable, based on her limited experiences and understandings of manufacturing setting and CA’s internal operation. Because the differences across the world, the business groups in 17 countries have autonomy to satisfy the needs of different customers. Currently Sampson required all advertising campaigns should be co-ordinated through New York, which was doubt. It is difficult to evaluate the advertising made by New York experts will achieve customer satisfaction of different countries. However, the centralization is counter to the general decentralized model of CA. CA used the decentralized model was sensible and had paid off handsomely compared with inconsequential economies of scales while national market differences were substantial.CausesThere was a “lack of fit” between process and task. In this case, the process is the communication system. Because the different corporate cultures, the different communication systems influenced Sampson cannot achieve her task. In Cabletronica, using e-mail to communicate is a usual way. In instance, the senior personnel changing as an important decision, was also announced by the chief operating officer through e-mail. However, it is not useful in CA. Based on the suggestion of Wong that e-mail was not the most effective way to deliver message, there must be a more effective way than e-mails. As the helm of CA, Sampson has to clearly and effective convey her decisions to executives. Because of the different communication systems, Sampson cannot achieve this task.There was a “lack of fit” between people and task. It is doubtful that Sampson can be a successful leader as Wong in CA. although Sampson got this appointment because the successful background integrating a lot of acquisitions in the cable industry and the high financial ranks, this was the first time she worked into manufacturing setting and worked with line managers. The limited experiences and understanding of armchair industry and CA led her to choose the ineffective communication channel to convey her decision, ignore the suggestion of Wong and make hurried thoughtless decisions.There was a “lack of fit” between structure and task. The task, in this part, is the customer satisfaction. CA performed decentralized model, the business groups of 17 countries can autonomous design and procurement in order to satisfy the different needs. However, because Sampson considered to greater centralization, she made decisions that all designs and procurement have to get approval from WF. The relationship between CA and WF is confused. Under the confused structure, it is difficult for the company to satisfy the customers’ needs absolutely.Goals 1.To hold midyear and end-of-year plenary meetings, and the next meeting will be hold at the end of year.2.To make six new designs in 6 months.3.To concentrate both CA and WF in Hong Kong in 6 month.Action AlternativesRestructuring CA and WF is an alternative. Restructuring CA and WF is to reformulate the structure, operations, policies and goals. Sampson has a successful background integrating numerous acquisitions for Carbletronica, and the reason she made the decisions is to greater centralization. Because of that, it is reasonable to come out: Sampson has capacity to integrate acquisitions to achieve centralization. After combine advantages of the two companies, the restructuring can come out a unified communication system, ensure the relationship between CA and WF, and allow CA can still have right to autonomous design and procurement under the monitor of WF. This alternative can almost achieve three goals and solve problems.Another choice would be appointing Wong as helm of CA and arranged Sampson to WF. Because Wong was the founder of CA, she is familiar with the operation and culture of CA. She can handle the communicational problems. However, Sampson stood for centralized to transfer parts of power from CA to WF. Currently, there is problem about the confused relationship between CA and WF. If choosing this alternative, they can corporate each other, especially Wong have worked with Sampson over 2months and she knew the decision what Sampson made. This alternative can achieve two goals and solve most problems.CA still performs decentralized model to compete with rivals. CA became the regard leader in global armchair business was based on the sensible decentralized model and multi-domestic strategies. Although the competitors had used centralized operation to enhance potential cost and cycle-time advantages, it doesn’t mean that the same strategy is also suitable for CA. In the case, all the causes appeared due to Sampson decided to perform centralization. So if CA still perform decentralized model as before, the problems can be almost solved and two goals can be achieved.RecommendationThe best alternative is restructuring CA and WF to be one company. As discussed above, restructuring CA and WF can reformulate the structure and process in unified. In instance, unified communication system can solve the communication problems, and the decision will be made more reasonable and considered. However, the restructuring of CA and WF is also integrating acquisitions, which illustrated the Sampson’s work capability and performance. In the same structure, no matter either decentralized or centralized operation uses, if CA can still autonomous design and procure for different needs of customers, the company will make more valuable products keep existing customers and win new customers. Moreover, the company can also earn profit quickly. However, in the new structure, it is easily and effective to achieve the goals such as six new designs in six months. CA still performs decentralized model is no as well as restructuring. In this alternative, Sampson can follow the CA's corporate culture to choose effective way to communicate with executives and no problems about centralization will appear, but it will result in no corporation between CA and WF. Both CA and WF are the acquisitions of Cableturina if no corporation between two relative acquisitions, Cableturina cannot catch profit opportunities as much as restructuring. Reappointing Wong in CA and arranging Sampson to WF is also not the best choice. Although problems will be also solved and almost goals can be achieved, and the corporation between CA and WF is also close. However, the division of two companies is still fuzzy, and they are still two independent companies. Cableturina needs to provide much more resource and capital than what it concentrated invests in a restructuring.ImplementationThe first step is to do both internal and external research. During the analyzing of internal and external research, the top manager can find the main problems of the company, what goals and tasks the company want to achieve, and how to compete with rivals. Because Sampson had done a careful examination of industry analysis and competitor analysis, so the company can save a lot of time to do the internal research. This step may cost two weeks. The second step is both helms of CA and WF have to meet together to design the detail of restructure. Restructuring is necessary to combine both advantages and ideas of two companies to find out a unified structure. In this meeting, they need to discuss the new mission, goals and strategies; the policies and process; organization culture; organized structure and centralized and decentralized operations. This step also needs one week.The third step is adapting period for staff in new structure. The staffs of both these two companies have to adapt the new structure, policies and process. They also need to follow the new rules and keep doing their best to achieve the tasks. This step will need two weeks.The fourth step is phasing over from old to new structures. The company must leave some tasks which made in the old structure. It is necessary to consider which tasks still need to cancel or achieve in the new structures. This step will need one week.The fifth step is making the new structure operational. In this step, top managers should evaluate the degree of restructure after the four steps and do some correction and improvement for the further controlling. Totally these five steps will cost over two months.ContingencyAfter the restructuring, there still has four month before the end of year. Because of that, there are four months to evaluate the efficiency of the recommendation. If at the end of year, restructuring cannot achieve the goals such as 6 new designs and holding plenary meetings, the emergency plan is to appoint Wong as the leader in CA and arrange Sampson to WF. As discussed above, this alternative will also solve most of the problems and achieve the goals. It can catch up with the process as soon as possible, and the corporation between CA and WF can be the warm up for the next restructure to integrating acquisitions.

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