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Case study: Job losses - Essay Example

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Case Study Fields’ initial actions upon acquiring LPB The first thing that Mrs Field’s Holdings did was to reduce the administrative staff of the acquired company from 53 to just 3. They did this by merging the various support functions that were common to both the organizations…
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Case study: Job losses
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Case study: Job losses

Download file to see previous pages... To give the senior management a feel of the new operational scenario, they were asked to work in these combination stores. Many outlets were closed down as a consolidation drive. Reasons for the above actions The company felt that their present staff strength in the support function areas was enough to take up the consolidated work load. Mrs Field’s always believed in the philosophy that keeping high employee strength diverts the attention of the employees from processes and operations to employee management which causes inefficiencies to creep into the system. Hence, only indispensable employees of the previous organization were kept. This makes a logical sense as the support functions usually add to the administrative cost and hence reduce operating margins. R&D and operations of the acquired company are the functions where Mrs Field’s employees would not have any expertise. Hence, it is imperative to keep the experts of these functions so as to understand the technicalities of operations and products and carry out a smooth merger of the two entities. New store designs were also required because the company plans to sell both products from the same outlets as this merger is considered to be logical extension of the previous business. Using same facility for both the products will also provide economies of scale to the company as Mrs. Field’s already has a store structure which has the bake area just behind the service area. Some modifications (if required) can be made for baking the new products within the same facilities. The facilities added from LPB act as outlets to reach out to the new market segment of LPB. Thus, there will be synergistic effect from merger of outlets. Asking senior management to work on the shop floor will help them acclimatise themselves with the new environment which will further help them in understanding the pros and cones of the new situation for better future planning. Views as an LPB store manager at this time As an LPB store manager I would be very much worried about my job security. Looking at the way support functions of LPB were integrated, with just 5.67% of the staff retained, the situation does not look very promising. However, one positive aspect of this retention policy is the fact that employees with expertise in areas not known to Mrs Field’s employees have been retained. Since at present both operations at the store level have to be merged, inputs of LPB store managers would definitely be required as the acquiring company’s managers would not understand the nuances of the business. Thus, in the near future, there is some amount of job security depending on one’s performance standing before the merger. It is understood that only the best performing store managers, who are perceived to be well acquainted with the business, will be retained. But after that it depends on how well the LPB managers are able to gel with the new work culture and create a niche for themselves. LPB managers will have to face the challenge of understanding the work culture of the new organization and adapt to it at the fastest pace. They may also face resistance from junior team members of Mrs. Field’s as they would perceive the new managers as different from them and lack trust in them. Pros and cons of the merger On the face of it, the business does look like an expansion into similar products. Most of the new products require baking in which Mrs. Fields is already an expert. There is ...Download file to see next pagesRead More
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