3. Carry out SWOT analysis and use Ansoff's matrix to generate potential strategies that could reverse Rose Toy's fortunes.
5. Suggest how they might improve the management of the quality of their existing product and any future products they might make.
1. Background to the Company
Rose Toys was founded in the early 1950's by Harold and Roy Rose, who were brothers. The firm remains family owned with Harold's two sons, Richard and Michael being in the business. Roy's widow, Ann Rose is a non-executive Director.
Rose Toys manufacture high quality, hand crafted model train sets. The 1970's and 1980's were periods of great prosperity for the company. Now, however, they are facing a situation of declining sales as the markets for their traditional product face increasing competition from new types of toys and games in the UK and overseas. In the last three years sales have declined to such an extent that a loss is predicted for the current year. This will be the first time that the company has made a loss. They have paid little attention to the market and have carried out no market research as Harold and son Michael Rose, strongly believe that 'quality' will sell and assuming traditional toys are still desired by children. They have ignored the advice of their financial controller who is rarely included in decision making despite being a competent business graduate with 8 years commercial experience in small business.
A further problem has arisen: conflict between the operations director and the general manager. The operations manager to whom the general manger has to report has been constantly blaming him for problems in production and has then refused to listen to what his subordinate has to say. Geoff is considering leaving as the resentment that has built up over the months has become too great.
Further more, the quality of the product has fallen as staff's commitment to the company has waned. Recently they have received some bad publicity regarding the safety of their products. A small child electrocuted their hamster whilst using one of the trains. Management have paid little attention to employees concerns that machinery is becoming increasingly old and unreliable and they are not able to produce the quota of trains to receive there full pay. Some of the employees have ignored quality control checks simply to produce more trains. Scrap rates are high at around 10%. Bad feeling has evolved with the manufacturing and assembly staff as the operations manager Michael has blamed them for the major lapses in product quality. Staff, although highly trained and loyal to the company are becoming increasingly dejected and absenteeism is on the rise.
2. Organisation and Structure
2.1 The Organisation
The Company's management organisation is as follows:
? Harold Rose Managing Director
? Richard Rose Sales & Marketing Director
? Michael Rose Operations Director
? Geoff Holland General Manager
? Gillian French Financial Controller
? Dave Martin Purchasing Manager
? Ann Davis Administration Manager
? John Preston Engineering Manager
? Jean Anderson Technical Development manager
The Company employs 155 people in total.
2.2 The Structure
The manufacturing is structured around two specific models
The Traditional Model: Engine section, rolling stock section, ancillary section, packaging and dispatch section
Push-along Model: Injection moulding section, Assembly Section, Packaging Section.
The Push-Along model is a radical departure for the Company into a simple, injection-moulded toy aimed at pre-school children. The traditional model operation employs some 120 people and the push along operation employs some 15 people.
3. Sales and Profitability
The sales and profit figures for the past four years are as follows:
Year Model Sales (£,000) Profit (£,000)
Current (C) Traditional 4,100 20
Push-along 700 90
C-1 Traditional 5,100 600
Push-along 300 70
C-2 Traditional 5,400 850
C-3 Traditional 5,100 920
3. Benchmarking Exercise
Rose Toys have conducted a basic benchmarking exercise to compare themselves with six other similar manufacturers based in Europe. The results are shown below:
Benchmark factor Rose Toys Competition Average
Profits (% of sales) 1.82% 6.5%
Unit cost price
Traditional £35.00 £22.00
Push-along £3.99 £1.75
Marketing support (pa)
Traditional £40K £65K
Push-along £40K £95K
Delivery times (weeks)
Traditional 12 8
Push-along 6 2
Scrap rates 10% 5%
Successful Management in the 21st Century
Management in the 21st Century
As the world moves through the 21st Century, business is becoming more dependent upon professional managers, who can bring success to an organization. Issues such as globalization and decentralization adds to the need for organization's to hire flexible managers capable of leading. A 21st century manager should possess three traits and utilize them to lead organizations: the ability to stimulate change, excellent planning capabilities, and ethics.
What a manager does and how it is done can be categorized by Henri Fayol's four functions of management: Planning, Organizing, Leading and Controlling. Through these functions managers can be catalysts for change or by definition change agents - "People who act as catalysts and manage the change process." (Robbins, Bergman, Stagg and Coulter, 2000, p.438) Whether performing the role of the change agent or not, change is an integral part of a manager's job. Change is "An alteration in people, structure or technology." (Robbins et al., 2000, p.437) Change occurs within and around organizations today at an unprecedented speed and complexity. Change poses threats and creates opportunities. The fact that change creates opportunities is reason why managers need to encourage change.
What a manager can change falls distinctively into the three categories stated in the definition of change: people, structure, and technology. The manager can make alterations in these areas in an attempt to adapt to or facilitate change. The change of people involves changing attitudes, expectations, perceptions and behavior. These changes are used to help people within organizations to work together more effectively. Changing structure relates to job design, job specialization, hierarchy, formalization and all other organizational structural variables. These changes are ones that need to be flexible and not static to be adaptable to change. Technological change entails modification of work processes and methods and the introduction of new equipment. Changes in this area have been enormous especially in the areas of computing and communications.
An organization's environment has both specific and general components, and micro and macro environments. The organization also has its own personality or culture. This environment and culture can be the generator of forces for change. Needs from within the organization can stimulate change; these are internal forces for change. "Of course, the distinction between external and internal forces is blurred because an internally induced change may be prompted by the perception of an external event." (Barney, 1992, p.755) Today's organizations are characterized by frequent disruptions to its environment. New strategy, new technology and change in employee mix or attitudes are all internal factors that can create force for change.
The introduction of new equipment or technology can create the need for change within the workplace. The staff will need to learn how to use the new equipment and it may affect the duties required of them. Their jobs may have to be redesigned. New company strategies, which may involve the change in management practices, enterprise agreements and industrial relations, will create a vast variety of needs for change. So will the attitudes of the workers. In fact employee attitudes can create the need for new company strategies in the case of job dissatisfaction, poor team spirit, lack of commitment and job insecurity.
External forces affecting an organization demand change by creating threats and opportunities. The organization it compelled to respond to these threats and opportunities. These external forces are apparent in many of the segments of the organizations external environment. These include political-legal, technological, economic, marketplace and socio-cultural dimensions.
The political-legal environment is that which consists of government bodies, pressure groups and laws. It is pertinent for companies to keep abreast of and change in political environment because these changes can have dramatic effect. Change in political environment can see legislation introduced that will not make selling or providing a product feasible or somewhat difficult. There are many political factors and laws that can affect business. Pricing, competition, fair trade packaging, labeling, advertising, product safety and minimum wages can all affect business. The marketplace is a major contributor to forces for change. These forces are created by changes in customer buying needs, expectations and buying habits. The lifting of import tariffs or market deregulation are other factors. The technical environment is created by developments of new products or processes that affect an organizations opportunities and operations. These advancements in technology purvey benefits and impel organizations to change.
The first factor to consider for motivating change deals with whether the organization is facing some obvious need for change, such as increasing competition; pressure on prices; changing customer needs / expectations; advances in technology; reductions in external funding; or regulatory changes (Cummings, 1997, p. 81). The actual change does not occur until the force for change exceeds that of the force resisting the change. People who may not necessarily lose from the change still contribute to the force resisting change. People inherently resist change because change causes uncertainty and ambiguity. Through good management these uncertainties and ambiguities will be removed and the resistance to change will not be as great.
Planning is "A process that involves defining the organization's objectives or goals, establishing an overall strategy for achieving those goals, and developing a comprehensive hierarchy of plans to integrate and coordinate activities." (Robbins et al., 2000, p.247) One of the reasons for planning is to reduce the impact of change. It does this by creating an environment that is accepting of change and by predicting change. "Planning reduces uncertainty by forcing managers to look ahead, anticipate change, consider the impact of change and develop appropriate responses." (Robbins et al., 2000, p.247) No amount of planning or anticipation can get rid of change all together. "Planning cannot eliminate change. Changes will happen regardless of what management does."(Robbins et al., 2000, p.437) Planning just enables us to best cope with and manages change.
Change can be modeled by two different metaphors: calm-waters and white-water rapids. The calm waters model involves unfreezing changing and refreezing; this is also the some as Lewin's model of change. We have seen that planning is a tool that can be used to predict change. In this environment of predictability the calm waters metaphor is an apt model. The organization is in a stable environment and can anticipate change so it goes through a process of unfreezing, changes implemented to overcome differences and meet new goals, and refreezing to keep changes in effect and return to stable environment. Total quality management uses this model. "Total quality management is essentially a continuous, incremental change program. It is compatible with the calm waters metaphor..." (Robbins et al., 2000, p.454) Total quality management continually seeks out problems and implements changes as they strive to ever improve their organization's efficiency and effectiveness.
Plans are difficult to develop for a dynamic environment. "This calm waters metaphor has become increasingly obsolete as a way of describing the kind of seas that managers in today's organizations have to navigate." (Robbins et al., 2000, p.441) This calm waters metaphor "... is not very helpful to people faced with the detailed task of bringing change about." Today the white water-rapids metaphor is more prevalent in organizations. It is a more comprehensive model. The white water-rapids metaphor depicts change as an ever-present perpetual event. An organization in white-water rapids is in an uncertain dynamic environment (Barney, 1992, p.757). Disruptions to the status quo may never stop. Managers in this chaotic world need to respond quickly to every changing condition.
Organizing is defined as "The process of creating an organization's structure." (Robbins et al., 2000, p.351) By comparing the definition of organizing to the definition of change we can come to the conclusion that organizing, a function of management can be a major contributor to the change of an organization through change in structure. Changing technology may be a contributor to an environment full of uncertainty, although this technology has enabled managers to organize for much greater efficiency and effectiveness.
Work specialization is necessary as jobs become more complex and it also increases efficiency. Although job specialization does not create an environment that is capable of accepting change; managers could adopt a structure of multi-skills. This multi-skills approach will provide the organization with an adaptable workforce.
Decentralization is "The handing down of decision-making authority to lower levels in an organization" (Robbins et al., 2000, p.359) Decentralization is prevalent in organizations that exist in complex uncertain environments. An increase in decentralization would create an organization capable of making faster decisions. This faster decision making ability is far more capable of reacting to change. This ability to react quickly to change is hence conducive to change.
An organization that is well structured for change is one that is organic. An organic organization has the structural characteristics mentioned above and others like wide span of control, cross-functional teams, free flow of information ...
2 Attachments - [1st MS Word attachment] - 7 pages - 3016 Words - 8+References Including Management in the 21st Century from Robbins, Bergman, Stagg and Coulter, Barney, Griffin, Graham and Dyckman. [2nd MS Word attachment] 10 Pages - 3029 Words - 17+ References Including SWOT analysis; Ansoff's matrix; Market penetration, Market and product development; Diversification; Marketing Mix; Positioning; Strategy; Growth; Maturity; Decline; Problems; The Core; The Actual and Augmented