Sunflower Incorporated management - Essay Example

? Today’s manager is tasked with a number of different duties and responsibilities geared at ensuring that the company maintains productivity and efficiency. The different stakeholders of a given organization each have their own goals and expectations that must be met in order to maintain a positive atmosphere among members. The viability of any given company gives credence to its continued growth and its ability to compete head-on with any of its competitors existing and new in the industry. The manager has the obligation of ensuring that things run smoothly and that there will be no surplus or shortages in the production of their products distributed to customer. Sunflower Incorporated is primarily a distribution company which purchases salty snack and liquor and supplies it to various retail stores in the United States and Canada. The company has had an established system focusing on geographical location as its main consideration. The main unit of Sunflower has given its branches ample leeway in terms of autonomy since each location consists of a varied demand correlative to the predisposition of the consumers of their given area. Understandably, each region consumes a greater amount of one product over another. Where whisky and bourbon is a major demand in the northeast part of the United States, vodka, gin and rum is popular in the West while Mexican taste is replicated in the snacks distributed to the southwest. The company in its outlets in the two countries is divided into 22 regions where each has an independent finance department, purchasing department, sales team and a central warehouse. The New Executive Primary to consider is the reason why Agnes Albanese was hired and given a comprehending reach in implementing policy changes to the company. It was in 1989 through the adoption of a financial reporting system that Sunflower found the astonishing disparity among the profits of the different regions. A number of these regions showed a significantly high profit but a cost. Management found that these regions may have been using substandard items in order to record increased profits. This practice could gravely affect the brand’s image and could easily tarnish its reputation resulting to worst case scenarios. Alternatively, national distributors threaten to decrease Sunflower’s market share by introducing new products and lowering their prices. Brands such as Frito-Lay, Nabisco, Pringles, Borden’s and Planters are determined to increase their market share through renewed marketing strategies of their products (Cummings and Worley 239). These imminent dangers to the company propelled the president of Sunflower, Mr. Joe Steelman, to pirate Agnes Albanese from a competitor. The new position of Director of Pricing and Purchasing was created specifically for her. Her direct superior was Mr. Mobley, the Vice President for Finance. The president and Mr. Mobley both gave her freedom in her position and to create rules and procedures as she sees fit. Her position as a new top executive of the company necessitated coordination with each region and this was made known to all concerned personnel for compliance. Less than a month from taking on the job, Albanese implemented a number of new policies that every region must comply with toward a standardized system for all regions. These changes are, first, financial executives must notify her of more than 3% changes in local pricing, second, contracts amounting to more than $5,000 must first be cleared by her office. Though the latter rule is in fact inoperable since majority of the items are bought in bulk and distributed from the head office and only 40% are from within each region. These guidelines, she decided, were to be sent to the regional executives through email and shall be implemented immediately and thereafter be included in the company’s policies within four months (ibid 240). Haphazard Changes The major mistake that Albanese committed is in coming up with new procedures without proper diagnosis of the needs of the company and consultation with each and every region as to the viability of the goals she wishes to implement. First she should have determined the existing situations in each of the regions in order to fully determine if the program is practical and whether or not it is necessary to achieve what her new position is set out to do. Sunflower Incorporated as a large company has its own culture distinct to it but also because of its extensive scope covering two continents, there are different cultures to each region and perhaps even to each office. The executives and their employees in each region will have varied organizational cultures. An adaptive culture is important to warrant participation toward a common goal. As Richard Daft puts it, “A strong culture that encourages adaptation and change enhances organizational performance by energizing and motivating employees, unifying people around shared goals and a higher mission, and shaping and guiding behavior so that everyone’s actions are aligned with strategic priorities” (387). Albanese must have first determined if Sunflower has a strong enough culture that they will not resist the changes she introduced. The absence of an adaptive culture will ultimately result to a failed attempt at immediate change. This is evident to the result of the reaction of the regional areas to the new policies. Another important consideration which Albanese overlooked is the purpose of having to inform her office of the contracts and purchases which meet the limits she has set. The why of the rules was never fully explained and the regional executives are at a lost on why they must follow it. Though the managers may have readily acceded to her email, their actions proved otherwise. This superficial conformity they have displayed may only be a manner of compliance and diplomacy. In order to avoid alienating and make it appear that they are resistant to the changes introduced by the new executive, the regional managers made it seem that they concur without airing their true position to the matter. Resisting Change Resistance to change is usually brought about because those who must follow it lack the understanding of why these changes are initiated. This need to elucidate a new policy stems from the basic fact that they should be made apprised with the purpose of the innovation. They are the ones who will undergo the changes and experience its effects whether it may be positive or negative. They may even suffer poor performance and fail to meet the demands because of the newly instituted bureaucratic setup. It is only indispensable that they understand the concept and how this will be for the improvement of the entire organization and in keeping with its goals. There should concurrently be a motivation for the managers to follow through with the new rules of procedure. There are problems that can be perceived in how the rule will be implemented and when it was implemented. Despite the valid concerns that Mobley raised to her, the new director of pricing and purchasing decided to push through with her plan. Mobley suggested that Albanese should personally visit each region to determine the feasibility of her plan. This was negated by her on reasons of financial expenditure and time consumption. The vice president was actually providing a good insight which could have led to a consultative decision-making premised on first-hand knowledge of the situation of each region. Albanese disseminated a new policy through email which is practical although it loses its personal touch. That the policy was implemented during the peak season when the regional managers had concerns more important than coping with a new system further aggravated the circumstances. The responsibility of the managers to meet the demands during holiday season and to address the problems of their respective area during this time overshadows their enthusiasm to actually follow Albanese’s mandate. The reason or the why of her notification requirement was another fault in the implementation of her decision. The rationale of why she requires the regional managers to notify her of pricing changes and contracts deemed substantial in value should be analysed in an economic perspective. Sunflower is a distribution company and their profit depends on the balancing of the materials purchased to meet the demands of the market. This requires a careful and methodical process where a pricing and purchasing expert comes in handy. Albanese was hired to provide a logical perception that will pave the way for the company to properly forecast the demands of the market and to ensure that production meets this so that equilibrium is maintained. This is inherently difficult to do since the company operates as a multinational company but this at the same time is not impossible since the two countries on which they operate do not vary significantly. Her goal of standardizing prices was an imitative reaction to the competitors’ plan of uniformed prices. Forecasting Techniques Market research plays a vital role in forecasting which could have been helpful to Sunflower. Albanese could have used any of the forecasting techniques instead of just arbitrarily applying the rules. The regional managers could have also taken part by providing executive opinion which is an achievable and cost efficient technique. The marketing departments of each region could provide important perceptions on the market and these data should have been accumulated and examined thoroughly as this will deliberately reveal market trends making forecasting easier in the long run. As previously mentioned, the different regions have different preferences to cater to the customers and these factors must be considered among others. The vested autonomy given to the regional branches cannot easily be disposed of. Applying the naive or the causal forecasting technique would have been much better than simply effecting changes without rhyme or reason. Market demand is dependent on a number of factors and not all of this is based on price. Other factors such as taste and expectations also determine consumption. This is relevant in the sense that among the problems that Sunflower faces is the decrease in quality in some of the regions because of the compromise on quality that some managers adopt in order to boost profit generation. This is a main concern for the head office since a stained reputation could have a domino effect which could redound to the company as a whole. The main concern of the company is not on the necessity of lowering prices to compete, although this may also be a concern, but on maintaining a good repute through consistent product quality without compromising its name. As a distributing company, supply is reliant upon producers and the amount of the products that the store chains are willing to buy which in turn is contingent upon direct consumer demand. Market equilibrium is the ideal state that the company vies for to avoid surplus which commonly results to the lowering of prices or shortage where the supply does not meet demand. The Stages of Change Typical to a manager’s job is his obligation to make decisions which will further the interests of the company. A sound managerial decision which puts into consideration the fundamental precepts of economics must recognize that for change to be effective it must recognize the four-stage model of change. These four stages is composed of ‘the good old days,’ ‘crisis,’ ‘reform’ and ‘recovery.’ Perhaps there is truth in the saying that the road to hell is paved with good intentions. It would be presumptuous to assume that Albanese did not mean well when she in effect decided to tear down the previously instituted culture of autonomy among regional areas and instigate an intrusive instruction that the managers must send notices prior to their transactions. Correlatively, the requirement for them to send notices for price increase and monetary contacts is not a prohibition for them to do such acts. These notices do not equate to a meddling in their affairs but a mere allocation of time to for information of the head office through their new executive. The market is characteristically competitive. The presence of competitors which offer the same product is always a major concern for a company. The industry to which Sunflower belongs constitutes a number of known brands which makes the market share of the companies a thing to fight for. Safeguarding that the company maintains a competitive edge is important not only for its development but basically for its continued existence. The national brands which threaten the company have their own veritable attributes which may not necessarily be the same for them. Where Sunflower is mainly on distribution, majority of these companies are into the production, manufacturing and distribution of their products. The same is not true for Sunflower which is not limited to salty snack alone but also endeavour on the sale of liquor. The standardization of prices by the national companies is simpler since the production cost is pretty much the same in all aspects and may only vary in distribution in terms of the freightage cost relative to distance. Source and variety is not identical in all the regions of Sunflower where supply mostly depends on regional preferences. “Adjusting to changes is one thing; initiating changes, particularly desirable changes, is something else again” (McConnell and Brue 83). Albanese is a new member of the organization. In the given situation, it may be inferred that she knows as much about the make-up of the company as the employees in the remote areas know about her. The omission of the regional managers to ignore her directive of sending notices despite making known of their concurrence that they will follow the procedure is indicative of a patronizing attitude on their part. They are either really busy because of the season or they just do not care what her opinion may be or it is most likely a combination of both. Central to the issue is the question of what is in it for them so that they will follow. At most, the sending of notices is added work and responsibility on their part without incentive. Failure to comply also does not pose any type of reprimand. Any logical person would make the obvious choice of simply disregarding this additional paper work and would instead revert to the business as usual attitude which is the first stage of change. The regional offices are encouraged to exercise autonomy in their area. They have grown accustomed to this setup and any immediate change will result in rejection since it interferes with their freedom. What is referred to as the good old days is a desirable arrangement for them because there is little to no accountability linking them to the head office. There exist a number of microcosms as many as the regional branches of the company. The crisis at this point is palpable in the organization. Albanese readily recognizes that her last-minute notice requirement is ignored by the managers. There is fault in both parties but majority of it can be attributed to Albanese because of the manner of how she attempted to institute change. Everyone must recognize that there is a change in landscape not only with the order of management but specifically because of competition. In order to rectify her wrong, she must now reform not only the policy and its wisdom but must shape it in a way that it conforms to an acceptable procedure to the regions. Restructuring is the main desire of effecting these changes to be able to attain reform that is more oriented to the management of revenue. This stage justifies the hiring of Albanese and the logic of her position. Finally, recovery as the ultimate goal moves the entire organization. This stimulates viability and promotes growth through profitability which brings change into full circle. Diagnosis and Implementation Consistent with what had been previously stated, there is no alternative to a deliberate and careful diagnosis of all aspects of the organization, the product and the competition to warrant a high degree of success to any planned change that a company wishes to implement. The signs were clear early on but Agnes Albanese opted to disregard them and instead obstinately carried on a plan which lacks procedural and substantive purpose. She acted as though time was not on her side and executed changes that are ill-fitting to the organization as it stands. She took the liberty given to her by the highest ranking executives of the company and despite the cautionary advice of her superior, Albanese proceeded with her plan instantaneously. There was no proper evaluation of all surrounding conditions nor was there a concrete plan of action that everyone is on the same page. Evidently, it is easier to say yes on email than to argue with the computer. The position of director of pricing and purchasing was a promising new addition to Sunflower. It was a way for the company to introduce an innovative office which focuses on the concurrence of economic principles with a managerial thrust. Pricing and purchasing are the two main functions which determine if the distributing company is realizing its best potential. The scope of Sunflower’s the business is far removed from a static economy where supply and demand is constant making it easy to determine future data. Together with the majority of industries, there is economic uncertainty which makes profit sporadic. The typical economy requires businesses to assume risks where profit is equivalent to reward (McConnell and Brue 283). The president of Sunflower recognizes this dynamic and thus made the bold move of hiring Albanese. She, however, was unable to effectively deliver her end of the bargain by failing to properly diagnose the problem and proficiently prompt a sustainable solution. Works Cited Cummings, Thomas G., and Christopher G. Worley. Organization Development & Change. Mason, OH: Cengage, 2009. Print. Daft, Richard L. Organization Theory and Design. 10th ed. Mason, OH: Cengage, 2008.Google Books. Web. 27 Nov. 2012. McConnell, Campbell R., and Stanley L. Brue. Microeconomic. 12th ed. New York: Mc-Graw Hill, 2000. Print. Read More