Armellini Ice Cream and Caf Chain - Essay Example

 Armellini Ice Cream and Café Chain Armellini Ice Cream and Café chain was started by Maria Armellini, after the WWII, in Venice and rapidly gained popularity for its innovative flavor and quality handmade ice creams. The unit later expanded to include espresso coffee and light snacks. After the untimely death of Mario, the eldest son Alessio took over the business and with the help of other family members rapidly expanded it with branches across Europe and South East Asia. Alessio’s primarily enforced strict quality control and adherence to the original quality of ice cream, food and beverages through surprise personal inspection or audits. The managers, who kept to the system and ensured that it worked, were rewarded and those who failed to meet the expectations were sacked. Creativity was not encouraged during Alessio’s stewardship. After his retirement, Helen Patterson, an Australian management consultant was brought in as CEO. Helen is following the ‘bounded rationality model’ of decision making as she firmly believes in the principle of management by objectives which need to be achieved within the given constraints through empowered managers. ‘Bounded rationality takes into consideration the real decision making constraints which confront managers’ (handbook). Effective decision making is essential part of managerial leadership to achieve desired objectives and optimal performance outcome. She has set targets for the expected results of the various outlets of Armellini Ice Cream and Café chain. Helen has considerably empowered the managers of various outlets in the management of the outlets and creating regional boards to boost their efforts, but their human resource policy and recruitment needs to be whetted by the head office. While inspections were still carried out, they became more of an exercise to look over the progress rather than a ‘checklist’ inspection. She has also broadened her objectives to include ‘franchising’ as a means of expanding the business. Helen’s management style is very relevant in the contemporary environment because the market has become more complex and highly competitive in the contemporary environment of fast advancing technology and rapid globalization. Wilson and Gilligan (2003) have assert, ‘marketing is increasingly being conceptualized as an organizational philosophy or ‘an approach to doing business’ (Wilson and Gilligan, 2003, p4). The increasingly changing pattern of society and the influence of technology need to be addressed in the wider application of social imperatives and included in all spheres of public and private business strategy. By delegating and empowering the managers, she acknowledged the real time problems, faced by the managers. In the rapidly changing environment of globalization, the dynamics of the business across the globe is undergoing tremendous transformation. The organizations need to implement necessary changes to not only survive but compete with their rival with confidence and effectively meet the challenges of the constantly evolving business environment. The highly competitive nature of emerging new models of global business has increased the risks and responsibilities of the organizations. The role of decision making, therefore, becomes increasingly vital to the strategic management of the organization and projection of its aims and objectives in the eyes of the public and stakeholders, especially in different economies. This approach facilitates decisions made by informed choice and therefore become more critical for the given situation for the outlet managers across the globe. The business practices of the domestic market are inadequate in the global market and tacit knowledge of the new market is essential for expanding business across the globe. There various macro environment like: economic; demographic trend; changing socio-cultural paradigm; developing new environmental compulsions; advancing technology; and political environment of the region, indirectly influence the performance outcome of the organization. Kotler et al (2007) assert that in the changing global scenario, demographic compulsions significantly impact market position and need to be taken into consideration in a company’s market strategy. By empowering managers, Helen has ensured that demographic compulsions are taken care of. Hence, rational model of decision with defined constraints becomes the critical factor for the de-centralized managerial leadership so as to evaluate different options and choose the best that can meet the challenges of the time. Nutt believes that flexibility of approach and initiative in decision making is vital part of leadership as ‘strategic choices are influenced by the manager’s decision style’ (Nutt, 1990). Helen’s managerial leadership should promote collective decision making which is conducive to the increasingly changing environment of global competitiveness. ‘Brand building is needed because products are the same’ (Kotler, 2005). The brand name ensures that the product maintains a high standard of excellence at a price that a customer is willing to pay for. Helen must ensure that outlets of Armellini Ice Cream and Café chain maintain their Italian flavor while incorporating the changing paradigms of global business equations. Effective brand advertising therefore, would greatly facilitate good market positioning of the goods and services of Armellini and help it to expand and exploit global market to gain necessary leverage. The strategic role of marketing demands a focused approach to offer a wide spectrum of informed choices to the various segments of the market, thus creating needs which are later fulfilled by the promised product and service. Indeed, all businesses are driven, tangibly or intangibly by the needs and requirements of the people, marketing becomes intrinsic part of their business strategy. In the competitive business environment data, information and knowledge become the three major elements of the informed choices that need to be effectively linked within the organizational goals and objectives. They help are highly relevant marketing concepts for all sectors as they help gain leverage to improve and improvise performance outcome. Indeed, a good leader ensures that all types of changes must be gradually introduced with full participation of the employees so that at each stage, they are able to understand the necessity and viability of the changes that must be enforced, in order to meet the broader aims and objectives of the organization. The imperatives of organizations must involve a ready preparedness for changes. Therefore, the management must make efforts to develop consensus through proper dissemination of information. It is important for the leaders and management of the organizations to promote empowerment of its staff through well designed process of problem solving and self learning through mutual cooperation and innovative management approach. The conflicts can be solved through effective communication that encourages discussions and doubts clearing sessions and leaders must adapt such techniques to overcome resistance and create congenial atmosphere in the organization. One can conclude that the compulsions of the present times require versatility in the work ideology and functioning. The new skills and strategies are evolved to meet the emerging challenges with efficiency and unmatched proficiency. ‘Countries have different political, economic, and legal systems… All these differences can and do have major implications for the practice of international business’ (Hill, 2004). The wider perspectives of the changing paradigms of the business environment have become important ingredients of business to understand and address the emerging challenges in the dynamics of new business equations. The bounded rationality model of decision making would go a long way in achieving organizational goals and objectives. Helen must, therefore, consider these factors within the strategies and seek proactive participation of various stakeholders to come up with collective decision making for realistic goals which are sustainable. Reference Armellini Italian Ice Cream and Coffee Chain Case Study. School of Management. University of Leicester. Hand Book. (2002). Strategic Analysis and Choice. University of Leicester. Hill, Charles. (2004). International Business: Competing in the Global Marketplace. 7th ed. Irwin/McGraw-Hill. Kotler, Philip. (2005). Toward Stronger Marketing. unpublished presentation to the ARF, “Future of Advertising” Conference, Chicago, 10.24.05. Kotler, P., Brown, L., Adam, S. and Armstrong, G. (2007). Marketing. 7th Edition. Pearson Education Australia. Nutt, P. C. (1990). Strategic decisions made by top executives and middle managers with data and process dominant styles. Journal of Management Studies, 27 (2), 174-194. Wilson, R. and Gilligan, C. (2003). Strategic Marketing Management: Planning, Implementation and Control. Butterworth Heinemann. Oxford (e-book) Read More