Toms Coffee Cup - on the Verge of Imminent Collapse - Essay Example

Tom’s Coffee Cup on the Verge of Imminent Collapse Executive summary Coffee Cup is a coffee restaurant that was recently opened by a first-time entrepreneur named Tom and which is situated in Baltimore, Maryland. The coffee shop has been facing a few challenges which can largely be attributed to poor management that has seen it fall out of favor with most of its regular customers. Today, businesses are facing numerous challenges emanating from various aspects such as unhealthy competition, lack of skilled human resources and poor customer handling skills among other reasons. This has led to most businesses ending up in debts and most others especially the start-ups going out of business in a very short time. It is upon the decisions and actions taken by business management that determines the success or failure of a business. This report will review Coffee Cup’s business strategy and the decisions that have led to its rapid deterioration as a result of the actions taken by its management. The report will provide recommendations at the end based on various principles of management such as planning, organizing and leading. This will in part borrow most of the information from the popular P-O-L-C framework of management. Through these recommendations, the management will certainly get back on course to revive this business. Table of Contents Executive summary 1 Challenges facing Coffee Cup 2 Analysis of the problems facing Coffee Cup 3 Planning 4 Organizing 4 Leading 5 Alternative solutions and recommendations for business survival 5 Overview of Coffee Cup Coffee Cup is a sole proprietorship business owned by Tom. It started out as a coffee house although it has recently expanded its services to serving sandwiches and salads for lunch and smoothies for breakfast. Tom started the business after leaving his corporate job and has enjoyed fair success as a first-time entrepreneur. The business currently has 12 employees after Tom employed Willie Cheet to fill up the position of the manager. Willie is the only salaried employee in the business with the rest being paid on hourly-rate basis. The business has seen numerous changes since Willie took up the management position and the business is facing a possible collapse due to his selfish management decisions aimed at increasing his earnings. Challenges facing Coffee Cup As earlier mentioned, Coffee Cup is experiencing several challenges that are emanating from Willie’s high-handed style of leadership which has seen the business adopt various changes in products quality and quantity. Willie has also introduced strict and somehow irrational rules in the workplace that have affected the morale of the workers thereby leading to reduced productivity and loss of cooperation from a section of them. The effects of these management challenges have seen an increase in complaints from customers and consequently a drastic reduction in sales. Willie continues to make amendments by laying off two of the workers to cut costs while also lowering the quantity and quality of products at the coffee house. The coffee house is currently facing closure and could already be making losses. Analysis of the problems facing Coffee Cup Having outlined the various challenges facing Coffee Cup, it would be necessary to have a closer look and in details at what could be the actual cause of these challenges. From a general view of things, it is clear the main problem lies with the management style being practiced at this business. Willie is clearly overstepping his mandate and misusing his authority for selfish earnings gains. On the other hand, Tom is also to blame for putting too much trust in Willie and rarely monitoring the progress of his business. The best way to analyze this situation would be to use a popular management framework referred to P-O-L-C, abbreviating the four main principles (and subsequently functions) of management. These are planning, organizing, leading and controlling functions in a business. The figure below illustrates the P-O-L-C framework of management (Carpenter, Bauer & Erdogan, 2009, p. 86). PLANNING ORGANIZING LEADING CONTROLLING Vision and mission Organizational design Leadership Systems and processes Strategizing Culture Decision making Strategic human resources Goals and Objectives Social network Communication Groups and teams Motivation Each of these four roles, if not executed properly, may lead to challenges in the management process which can result in the overall breakdown of a business. This is exactly the case with Coffee Cup, with three of these principles having been violated by the management in general. Planning Planning is the first management function that involves setting objectives and determining in advance the course of action through which these objectives are to be achieved in a business. This is a very important function and mainly involves the manager having a clear understanding of the business environment and also forecasting any future conditions likely to take place. For example, at the inception of Coffee Cup, Tom had an excellent plan for his business, soliciting for ample funds to successfully kick start his business. He had a clear vision for the business with the business’s mission statement stating that he focussed on providing a quality atmosphere for his customers. However, Tom lost his plan clarity once he ceded his business control to his manager who in turn lost focus of the initial business vision. Organizing This function deals with developing an organizational structure while also allocating the necessary human resources to ensure efficiency in the accomplishment of the business objectives (Garavan, 2007, p. 17). Poor organizational design decisions may lead to lack of clarity in the job description, lack of accountability and poor productivity. This is evident in this case of Coffee Cup with Willie laying off two employees which certainly destabilized the structure that Tom had put in place. Willie also introduces a quite different organization culture when he introduces very harsh regulations including fewer interactions between the customers and the workers, and other rules that affected the working conditions of the workers. This demonstrated a huge organizational gaffe that ultimately cost Coffee Cup. Leading In this management function, managers are expected to use social and in some cases informal sources of influence in an attempt to inspire the actions taken by others and especially their subordinates (Alavi, Kayworth & Leidner, 2005, p. 202). It is evident Willie lacks this quality as he does not practice it in his administration of duties. He employs a one-way method of communication and does not give room for discussion or suggestions from his subordinates. This is seen in the low morale by the workers and consequently reduced productivity that nearly cripples the business. Alternative solutions and recommendations for business survival The report has so far analyzed the challenges facing Coffee Cup especially with respect to what is expected of management. This section will provide the actions that should be taken by Tom in order to salvage his business from the imminent collapse if no action is taken. Tom should revisit his business mission and vision and formulate the way forward towards resuming his initial preference for quality over quantity. This will mean seeking the services of his quality materials suppliers again as Willie had ditched them for cheaper but low-quality sources. Tom should also formulate a better strategy that encompasses the high potential of business growth that initially saw him abandon his role due to overwhelming responsibilities. He should also outline a more firm organizational structure and culture that should be followed by everyone including his employees in the managerial positions. The structure and culture should be modification-proof to avoid cases of misuse of powers and authority by the managers. Tom should also ensure that he is involved or consulted before all major decisions are taken in the business. For example, change of suppliers, product price alterations and employees’ dismissal and promotion among others. Tom should also formulate a more open and engaging channel of communication between his management team and the employees. Discussions and suggestions should be encouraged for inclusivity and participation in decision-making processes. Finally, Tom should be available whenever possible, even if it means creating time in his busy schedule to ensure that he monitors his business more closely which grants him an opportunity to have a personal assessment and account of what the business demands. References Alavi, M., Kayworth, T. R., & Leidner, D. E. (2005). An empirical examination of the influence of organizational culture on knowledge management practices. Journal of management information systems, 22(3), 91-224. Carpenter, M. A., Bauer, T., & Erdogan, B. (2009). Principles of management. New York: Flat World Knowledge. Garavan, T. N. (2007). A strategic perspective on human resource development. Advances in Developing Human Resources, 9(1), 11-30. Read More