IC Company Management, Creative and Commercial Attitudes - Case Study Example

IC Company Management, creative and commercial attitudes IC Company is an international brand retailer which was established through the merger of two Danish companies. The companies involved were Carli Gry international and In-wear Group. The merger happened in the April 2001. The company is known to be one of the leading brands in Northern Europe. The company has about 2,250 employees with over 11,000 wholesale distribution points in over 40 international markets. The company has 21 outlets and 220 shops in thirteen countries. IC Company’s flagship is its peak performance. The company is positioned as a premium brand in the field of active sports. The company has faced numerous challenges. The company had been suffering from inadequate management capacity and poor working climate. The widespread frustration within the company accompanied by mediocre economic performance necessitated the merger as one of the strategic move to prevent further loss. The chief executive officer of the international retailer, Henrik Theilbjorn, had seen tensions among the shareholders rise for six years. However, the merger was an organizational blunder in terms of revenue. The company faced the challenge of implementing many cost saving measures, economics of scale and elimination of over 400 redundant employees. Notwithstanding the measures, the company continued to suffer substantial annual losses. The management of the company suffered paralysis. This led to the resignation of important people. This point caused a crucial shareholder and founder of In Wear Group, Niels Martisen, to call for a special general meeting. The goal of the meeting was to install a new management. The new chief executive officer understood the need to unleash the full potential of the IC Company and restore confidence through profitable initiatives. The challenge demanded that growth be felt in all markets and brands. The company embarked on the strategy of internationalization. The company developed an increased focus on accessories, golf wear, and sportswear for both men and women. This caused increased growth in revenues outside Scandinavian countries. Orders for up to eighteen collections grew. The In-Wear Group believed that increased penetration into the existing market was important for the growth of the brand. The company embarked on establishing new retail and franchise stores. As part of the strategy, the company paid special attention to the casual wear. Additional Challenges The company lacked the experience and the expertise to meet the market expectations. The challenge included inadequate resources to enhance innovation and transform ideas (Miner 2002). The company also needed better mechanisms of protecting intellectual property. This would encourage innovation among the organizational experts and knowledge workers. The multiband organization concentrated power around brand directors. This created a challenge in information and knowledge sharing. The company’s model allows the managers to incorporate many stakeholders in the process of decision-making. The initial structure of the organization made it difficult of structured consultations. The company faces the challenges from employees who are resistant to the proposed changes. According to chief executive officer, the business model has been weak making the competitiveness of the organization to be greatly affected. The traditional decision-making was ineffective because of bureaucracy (Cameron & Green 2004). The challenge of the distorted balance in power matrix has been a big challenge. The organizational transformation requires intensive training to ensure full consumer participation (Blackshaw 2008). The company had to face stiff competition from major brands like Hugo Boss who were competing for the same target market and keen on internationalization and increased franchise stores. The company suffered from unbalanced growth between the new and the original brands. The company’s had special focus on the middle market. However, the brand competed in different market segments with different price levels. Although the IC Company is a high market segment brand, the plan to target many social classes led to increased revenues. The mid-market grew by over 2 percent. According to statistics, most of the sales in the company concentrated on the Northern European market. The image values and brand identity led to demand for increased company labels. The market penetration in other European markets was relatively poor. The company suffered the challenge of indecisiveness especially after the merger. This affected information sharing and efficiency in team work. The IC Company had to replace dysfunctional design models and replace them with vibrant models. The traditional models had power concentrated at the top. This created a disconnection with the lower cadre employees. The value chain of the company called for vibrant and competent management. The company had to perform prior market research before launching new products or entering new markets. Besides competent leadership, the company had to improve the brand image and align strategies to address the needs of the market. Innovation skills played a significant part in improving the brand portfolio (Blackshaw 2008). Commercial approach The design process of the company lacked a clear commercial goal. The company had to reinforce the commercial awareness and business orientation. The management realized the need for appropriate mixture of products to attract a large market segment. The designers become both fact based, innovative and artistic. This demonstrated high level of design-competence. The management placed value of the ability to accurately intepret trends. The management introduced a systematic and commercial way of designing products (Finkelstein & Cooper 2012). The strategy encouraged the designers to interpret the mindsets of the consumers’ tastes and preferences. The new strategy embraced the use of systematic sale reviews and enhanced market feedback. The company revitalized the marketing strategy. This entailed the use of messaging and commercially supportive campaigns. Managing knowledge; how well does current managing knowledge and innovation scholarship support decision making in this case? Knowledge is a major source of competitive advantage in a developing society. Integrating and sharing knowledge in an organization is crucial for innovation. The organizational management must incorporate conscious knowledge with collective or social knowledge. If an organization is going to succeed, then it must innovate and manage knowledge successfully (Kissling 2009). The new management of IC Company has embraced knowledge management strategies. Under the M-form model of organizational model, it is becomes possible to incorporate multiple sources of information leading to increased knowledge management. The new management needs to establish advanced decision-making systems through high level knowledge management. This is expected to have a positive impact in brand management and enable exploitation and exploration. The new management has invested in leadership competencies and management (Finkelstein & Cooper 2012). The management is learning from the lasts failures. This has created a conducive environment for effective knowledge and decision-making support systems. Studies show that organizational innovation occurs when employees or workers are willing to collaborate in order to create, share and apply knowledge. There is a correlation between organization decision-making processes and information sharing (Foss 2012). The employee relationship affects the willingness to share knowledge and innovation. The new management ensures knowledge management thorough talent reward management and promotion opportunities. Incentives and motivation are known to promote teamwork and boost employee’s morale. The possession and the use of power affect the organizational knowledge processes. Organizations are turning to ICT enabled decision-support systems (Finkelstein & Cooper 2012). IC Company is depending on competence trust to build a strong reputation and decision-support system. However, the new management is alive to the fact that companion-trust among employees can enhance teamwork and contribute to development of better decision making processes. The new management, through creativity, exploited its brand portfolio. The strategic team targeted organic growth (Foss 2012). The company began to recover from unsuccessful merger in 2001. The management dismantled unprofitable brands to increase cash inflows. The new brands had a bigger share of profit than the original brands according to IC Company’s annual report 2005/6. The management embraced a creative and commercial attitude. The new management introduced industrial competences and strategic clarifications. This was followed by a significant shift in the managerial paradigm. The value-chain activities of IC Company adopted a more commercial approach. These included design, sales, marketing and purchasing. Research shows that trust is intertwined with decision-making in an organization (Foss 2012). The IC Company is harnessing institutional and process-based decision making through encouraging teamwork. The new management at IC Company recognizes that the decision-making process involves teamwork and clarity. It also affects organizational perception of equity. High level of involvement leads to better decision making. At the same time, workers feel appreciated for their skills and intellectual abilities. The knowledge workers in IC Company are valued. The new organizational management has recognized knowledge as an organizational, economic asset. The employees are trained on when to apply certain bits of information and knowledge. A friendly organizational atmosphere is one of the initiatives at IC Company to promote better decision-making and sharing tacit information (Keogh 2002). This is one of the strategies to increasing the productivity and efficiency. The management at IC Company has established structures that support innovation and knowledge management. This is expected to the give company a competitive advantage with faster structured decision-making and service delivery. The company is appreciating the knowledge-based society and its perceptions. The marketing team is presenting designs that appeal to the changing market designs (Finkelstein & Cooper 2012). These include that N-form, I-form and matrix forms of organization designs. This entails proactive management and decision making. What research says on the ideas The traditional models did not facilitate information sharing. This led low employee morale and divided platforms when it came to realization of organizational synergies. Most of the employees lacked shared platforms. However, the technologically supported decision-support models are said to be vulnerable to network hitches (Blackshaw 2008). Blackshaw (2008) argues that this can have a devastating impact in the structures operating under the shared platform. The models suffer from complications that arise from unharmonized models. This is because it is not mandatory for IC brands to use shared platforms and the proposed models. This makes payments and other services difficult. According to the management, this is one of the limitations of the proposed models. The decentralized and autonomous brand structure has made it difficult to facilitate continuity (Finkelstein & Cooper 2012). According to research, the organizational management must be collaborative and professional. All managers must have the skills to run the organizational human resources. This shall make it easier to define brand activities from shared platforms. Organizations should disintegrate activities and training the organizational leaders (Cameron & Green 2004). Studies indicate that upgrading human resources can address some of the limitations of the organization management models. The traditional organizational model was hierarchical. The proposal to execute multiband strategy continues to encounter challenges. According to the IC company annual report 2003, the company needed revised models that were both productive and lean. As a solution, the management believes that equipping leadership with the relevant competencies and executions skills can unlock the organizational potential. Management is a means to make an organization operate effectively. A model is a theory that indicates which organizational factors play a critical role. Therefore, a model can be viewed as a roadmap that should affect the terrain of the organization. A model can be implicit or experience-based. The IC company organizational models had to incorporate multiple needs from shareholders and brands. Studies suggest that an organization’s major premise is effectiveness and management. Therefore, an organizational model must have capacity for feedback, adaptation, internal interdependence and equi-finality. The management of IC Company has embraced a modern model that is transformative and reflective of the organizational model in the case of strategic mergers. Organizational creativity is central to the meeting the consumers needs. Any organizational success must be pegged on sustainability. Marketing and packaging are a reflection of the organizational strategy. Packaging is a form of advertising (Finkelstein & Cooper 2012). Some brands require more exclusive packaging and careful handling. Organizational strategic moves must address organizational competencies. The move by the IC Company to merge had an impact in the organizational competencies. Through the merger, the company was able to expand its target market. This has a positive impact in the organizational revenues. The merger gave room for organizational diversity which is a core competence in the fashion retail market. This was followed by harmonized management and organizational model. The merger gave room for a multi-brand strategy and was influential in ensuring the full potential of the company was achieved. Mergers are a rebrand strategy that made the organization humongous and led to a brand mix up. The merger was threat to brand uniqueness and thereby becoming problematic. According to research, organizational management must address the departmental management and employee morale. The organizational management gives workers defined roles and clear line of reporting. Organizational design is central to organizational effectiveness. Although the merger raised tension among shareholders, the new management was able to raising the organizational revenues. The organizational effectiveness depends on the competences and organizational design. What options do the individual/ company have? What should they do? Companies need to consider functional and productive organizational models. In expanding the market penetration, the IC Company had to alter the organizational structure and branding. The business model involves market segmentation and targeting the marketing model. IC Company had to involve vertical integration after expanding the product portfolio. The company gradually transformed from U-form organizational level to Multi-divisional and matrix structures (Sandhu et al 2009). The latter model encouraged delegation of responsibilities and sharing on information. Under the M-form organizational model, IC Company ensured structure decision making (Blackshaw 2008). This is a significant shift from the traditional model with is centralized and controlling. The decision making system in the traditional organizational models is bureaucratic and extremely hierarchical. However, with the changing strategies and approach, the organization is using a knowledge-based approach which requires the input from every employee. The ICT has facilitated decision-making systems as the company expands the market segments and community-based structures. This has facilitated knowledge sharing and innovation within the organization (Sandhu et al 2009). The need to explore market and increased collaboration has led to better market performance and knowledge sharing. Another initiative entails the use of outlet division. The management believes that improving the capabilities of the outlet activities would enhance the brand-oriented strategy. The new CEO equated the outlets to retails. This was followed by a multiband strategy to improve organizational accountability and empowerment. The leadership of the organization believes that motivation and ambition can be enhanced with M-form model of organizational management. This would address the multiple needs of the organization in the face of expanding product portfolios. The management asserts that brand-driven management must be team-based, accountable and courageous. This was unlikely in U-form model of organizational leadership or management (Sandhu et al 2009). Multiplicity in organizational management leads to increased innovation. Under the new CEO each brand was supposed to work independently. Every brand had a dedicated management accountable to a brand manager. The brand teams were supposed to enhance brand equity through building, positioning and developing the brand. Brand can be a platform to launch products or enhance the customer attitudes. The multi-brand strategy diversified the company’s risks. Each brand established a fact based and commercial development of collections. The other option is the deliberate move by the organization to bring together organizational knowledge assets. The management of IC company encourages sharing of exploration and exploitation risks. Multiple teams come together in the process of decision making. This is facilitated by the organizational decision-making systems. This brings together the knowledge sets which are profitable to the organization. The organization encourages teamwork through transmitting learning across multiple organizational players (Sandhu et al 2009). This enables the IC Company to harmonize its operations. IC Company should promote joint participation and shared efforts in enhancing the quality of the brand. The company can create incentives from internal innovation. This can add variety to the established products and lead to internal products viability and sustainability. The modern decision-support systems facilitate stakeholder participations and sharing experiences. IC being a multidivisional company, the top management must ensure functional structures for centralization of responsibility to the operation divisions. The company must value information as an important organizational asset. Companies must make deliberate efforts to search and analyze information that promotes organizational effectiveness. This calls for efforts to increase efficiency and performance assessment. IC company management is encouraging collaboration and distributed knowledge through decision support systems as an option. The top management is promoting open innovation and commercialization. The management believes that invention knowledge work mobility is a vital ingredient when it comes to looking for options that work for the company. This calls for professionalism in managing innovation in organizations. References Blackshaw, P. 2008. Satisfied customers tell three friends, angry customers tell 3,000: Running a business in todays consumer driven world, 1st ed. New York: Doubleday. Cameron, E., & Green, M. 2004. Making sense of change management: A complete guide to the models, tools & techniques of organizational change. London: Kogan Page. Dioguardi, G. 2010. Network enterprises: The evolution of organizational models from guilds to assembly lines to innovation clusters. New York: Springer. Finkelstein, S., & Cooper, C. L. 2012. Advances in Mergers and Acquisitions. Bradford: Emerald Group Pub. Foss, N. J. 2012. Innovating organization and management: New sources of competitive advantage. Cambridge: Cambridge University Press. Keogh, J. E. 2002. E-Mergers: Merging, acquiring, and partnering e-commerce businesses. Upper Saddle River, NJ: Prentice Hall PTR. Kissling, H. J. 2009. How knowledge is transferred within the Danish fashion industry: Taking a knowledge management perspective on the creative design process, 1st ed. Frederiksberg. Miner, J. B. 2002. Organizational behavior: Foundations, theories, and analyses. Oxford: Oxford University Press. Sandhu, U., Strøm, M., & Copenhagen Business School. CBS. 2009. Valuation of IC Companys A. Frederiksberg. Read More