Acquiring La Petite Boulangerie - Essay Example

ISMG Initial actions taken by Fields upon acquiring LPB According to the Investor Glossary , “an acquisition takes place when one corporation takes over controlling interest of another.” This means that with acquisition there is the absolute ownership of the company that is bought. It was not surprising therefore that Mrs. Field decided to manipulate several components of the new company, which was La Petite Boulangerie. The first significant action taken by Mrs. Field was the reduction of the number of staff on the acquired company from fifty three to just three. Mrs. Field therefore had to work with fewer employees and managers in the new ‘twin’ company than she was likely to work with if she kept all the staff of the subsidiary company. Secondly, there was the change in organizational structure to fit the organizational culture and climate of the old Mrs. Field Company. This action was perhaps in relation to the fact that the existing staffs who were to manage the new group of companies had to continue with an organizational system that they were more comfortable with. Finally, Mrs. Field adapted the existing name of Mrs. Field for the new group of companies rather than maintaining the La Petite Boulangerie for the new venture. Why those actions were taken As the saying goes, there is no smoke without fire. Indeed, Mrs. Field took the three actions discussed above for a reason. In the first place, Mrs. Field is reported to have said that “we absorbed many of the overhead functions into our existing organization including accounting, finance, personnel, human resources, training, and development” (Richman, 1989). This means that as long as positions in the acquired company such as accounting, finance, human resource and training all existed in the old company, the Fields’ felt that there was no need bringing in new set of hands to do what was already being done by existing set of hands. The Fields had therefore thought of increasing their savings by reducing cost on human capital development and payment. The second action of changing the organization structures must have been with the mentality that the staff who were going to handle the affairs of both Mrs. Fields and La Petite Boulangerie needed to operate with set of organizational structures that they were more conversant with. Since the staff-base had virtually not changed, there was the ideology that changing the organizational structure would have given the staff more concepts to learn. On the decision to maintain the name, Mrs. Fields’ we are told that “the Mrs. Fields name was demographically well established, and Randy believed whatever they put it on would sell” (Richman, 1989). This means that the name was thought of as a major competitive advantage in marketing the company to existing and new customers. Indeed, the Fields so it a herculean task having to keep a name that it could have cause them several years to make it as popular as Mrs. Fields. Personal view on the actions taken I am of the opinion that the reduction in number of staff at La Petite Boulangerie from fifty three to three was to the disadvantage of not just the workers but Mrs. Field also. This is because in as much as the workers who were laid off would have a hell of time securing new jobs, Mrs. Field would also have to deal with old customers of La Petite Boulangerie who might have fallen in love with the business culture of some of the old employees and so would stop doing business with the company because of the absence of those old employees. Still on the reduction in number of staff, it is worth noting that tough the portfolios at La Petite Boulangerie and those at Mrs. Field might have been the same, the actual size of business had increased and so more hands were needed to make up for the expansion. I am also not in support of the decision to change the organizational structure of La Petite Boulangerie. My reason for this position is that customers of La Petite Boulangerie might have worked and acquainted themselves better with the organizational structure of La Petite Boulangerie and thus adapting to any new changes would have been unfriendly to them. This argument does not however lose sight of the fact that since the old staff were going to be responsible for the running of the new group of companies, they needed to work with an organizational structure that they found more easy to adapt to. Regarding the decision to overshadow the name of La Petite Boulangerie with Mrs. Field, I am of the view that it is economically prudent. This is because the local and international track records of Mrs. Field are nothing that La Petite Boulangerie could be compared with. Indeed Mrs. Field had become a household name that could make any entity associated with it succeed. Products, customers and management challenges between the two companies Debbi and Randy held the view that the business of La Petite Boulangerie is similar to their own in terms of products and customers but not in terms of management challenges. I agree to this with regards only to the products and customers and not management challenges. Starting with the argument of management challenges, it can be said that the management challenges faced at Mrs. Field were totally different from those faced at La Petite Boulangerie because the two companies were being managed by two different people at different times and with different leadership styles. The most significance even has to do with leadership style. This is because Debbi who in charge of Mrs. Field had reported of adapting two different leadership styles. The first she talks of is autocratic leadership style where she describes how she had always wanted to do everything because of too much are and concern for the company. Later on, she is quoted as saying “I was forced, kicking and screaming; to delegate authority because that was the only way the business could grow” (Richman, 1989). This means that Debbi later realized the need for her to be democratic thereby deleting power to other people. But from the quotation, we realize that Debbi did not achieve that feat with ease at all. It could be said that the management challenges faced by Debbi were more personal and individualistic and could hardly be thought of as the same set of management challenges faced by managers at La Petite Boulangerie. It is when Debbi talks of similarity in product that I agree with her. This is because the two companies were all into bakery and thus dealing in pastries. By pastries, it means the two companies were trading in flour baked food items that were commonly eaten wit beverages, eaten alone or eaten as dessert. Because the two companies were trading in the same products, there customers were also relatively the same (though not the same individuals). Age wise, pastries are consumed by people of all ages – from adolescence to old age. This therefore made the two companies have very wide customer base because the consumption of pastries was no respecter of age. The consumer base of the two companies also comprised of people of all social status because cookies come in different flavors, sizes and quality. For this reason, it is affordable both among the rich and poor. A person actually made an order depending on his or her economic preference. Fields information systems Technology and for that matter information system was not part of the original plans of Mrs. Fields. The idea was adapted from how Debbi ran the original Palo Alto store. Clearly, Debbi had showed from her end that it worked for her! The good part is that the experiment did not fail as the use of information system proofed as useful at the Fields’ as it was at any other place. In fact as the world keep closing itself out in the space of technology and information system, the benefits of information technology in any organization cannot be overemphasized. For instance once introduced, a lot of pressure was taken from the workers of the company as they no longer had to do a lot of manual work because of the presence of technology. Randy envisioned the role technology can play in getting a lot of hard work done easily and relieving people of pain when he remarked that “why human beings be made to work that machines could do?” Information system was indeed helpful everywhere because “information system helped Debbi maintain a degree of personal involvement with each store manager” (Richman, 1989). It was also used in making hiring decisions very simple. In terms of finances, the information system introduced at Mrs. Fields’ played very crucial role in conducting a lot of the business transactions that took place in the company. On the portability of the information system, it can be argued that the information system was very portable because it had actually been transferred from one company to Mrs. Fields’ and was making almost the same level of impact as it was in that company. Even among the departments at Mrs. Fields’, the information was transferable from one department to the other. Randy’s explanation of the losses after the acquisition Randy was trying to give reasons to the losses of the company after the acquisition but his reasons and explanation cannot be considered as economical or scientific. Randy wanted to explain that the company had started recording losses because it was yet to recover from the expenses made in the acquisition. I am however of the view that if all measures had been put right, Mrs. Fields’ should have started benefiting in terms of income from the acquisition right from the following day of the acquisition. For instance there could have been enough publicity on the acquisition so that customers of acquired company would have psyched themselves with the doing of business with the new ‘twin’ company (Thompson, 2009). In the absence of that, existing customers of La Petite Boulangerie were not happy with the sudden change in organizational structure of how La Petite Boulangerie did its business. Much blame could also be linked to the cutting down of staff, which was taken only with the view of cutting down on expenditure on salary rather than thinking of the need to be in a position to absorb the number of customers who were going to double because of the new size of the company. The future of La Petite Boulangerie and its employees, including store managers, when Fields begins bringing in its marriage of management structure and information technologies Clearly, the information system at Mrs. Fields’ has come to stay. The task on employees at La Petite Boulangerie was for them to continue to get themselves fully adapted into it. Individual workers are challenged to take up refresher courses that will help in bringing them up to speed on the new trends in the information systems usage. With a team of workers who were learned enough to be up to speed with the information system, the employees and managers at La Petite Boulangerie are sure to have very bright future that would see their company grow from strength to strength. REFERENCE LIST Thompson, Terry. The Basics of Merger and Acquisition. PrintMark Publication. Print. 2009. Toronto. Investor Glossary (2011). Acquisition Definition. http://www.investorglossary.com/acquisition.htm. 2011. Web. September 11, 2011 Richman, Tom Mrs. Fields Secret Ingredient. Harvard Business School. Print. Boston, 1989 Read More