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Best Snacks is part of a giant industry in the modern world. The fast food industry is a rapidly changing industry. As we will see in the pages to come, Best Snacks is finding itself in a difficult position lately. It is one of the oldest operating companies in the sector with a very reputable name but it has been losing market share the last years.
As a business it should take dear the benefiting of its stakeholders. But we must not forget that the mission of a business is, after all, to increase profits (Simon, 2006, p. 22). This means it has to serve particularly a certain group of its stakeholders; its share or stock holders. At the same time it has a social responsibility part that it cannot forget. Its loyalty to its actual work force is one of those aspects that a good company cannot allow to lose. At the same time, in this global market place competition is growing fiercer and the need to improve professionally and cut costs is immediate if you want to “survive the tide” (Simon, 2006, p. 23).
Describe the Situation
Issue and Opportunity Identification
The issue at hand regards a very particular situation. The fast food industry has been growing fast during the last two decades. It is a particular issue because it deals directly with the quality of life, with the health, of every individual in society. In fact, what we eat affects us in a positive or negative way during our daily lives. Nutrition is a basic feature of human beings. As a result of the industrial revolution and the boom in population that this planet has had during the last one and a half century, new ways of producing and serving food have been used. The company we are analyzing here, Best Snacks, is one of the oldest in the market. It has led the fast-food industry for many years. Now, it wants once again to become the leading company in offering consumer healthy food (Jones, 2006, p. 318).
But lately it is facing difficulties and starting gradually losing market positioning. The management team has identified lack of proper innovation and labor force un-engagement as major factors contributing to this negative situation. This is leading to loss of customer confidence which in turn will cause the loss of supplier and investor confidence. Thus, they found necessary that Best Snacks has to strengthen relations with the general public, the consumer, since the products it is dealing influence directly on consumer’s health. A company has to earn public confidence because “building a positive image since the start of the company, or using the previous positive perception that the public may already have on other products you have launched before, will help the companies gain a strong market share position” (Gomez-Mejia et al, 2006, pg. 7).
For Best Snacks to do that means to reorganize its actual labor force and motivate them in such a way that the innovative creativity they hold be unleashed. It is well proved now that a company’s productivity and image is not only related to its branding, its products, or leadership, but also on how it treats and evaluates its work force (Simon, 2006, pg. 4).
If the work force is motivated the productivity of the company will boost. But when a plan that can, or will, affect the work force is deployed it is better to communicate with them in order to have their feedback. In our case, the re-organization plan directed by Sabrina will have a direct impact on the work force. Thus, it is important, as Steve points out, to communicate with the work force in order first to have their point of view and then develop strategies that will boost morale and raise their contribute to innovation.
The issue of making innovation as the driving force for the company leads us to another important point for Best Snacks, which is that of attracting investors to invest their money in the company. First thing that investors are going to see is the leadership of that company. If the leadership has a high level of integrity and creativity it will be a plus in attracting investors because they “believe” in the business sense of the leadership. But if the leadership, for example board executive members of Best Snacks, do not deliver as they should the re-organization plan and fail to make innovation the driving force of the company, this might make investors worry about investing their money in this company, thus damaging the company’s liquidity.
Stakeholder Perspectives/Ethical Dilemmas
Shareholder’s prime interest is that the company maximizes its revenue and diminishes its total costs. This way the company will increase the net profits which will in turn result in more profits for the shareholders. There may be additional values that shareholders take dear but the above mentioned is, in my belief, more important. This is due to the fact that they have invested their money in a business profit company for the reason of gaining profits. They expect the company to return their initial investment as soon as possible and then pass to the stage of gaining profits. And that is one of the major ethical dilemmas that we find in the business world today: how to increase profits without “moving away” from the so called social responsibility part of the business?!
Best Snacks is a company that deals with nutrition and can affect the health of people directly. If an “only-for-profit” tendency is shown then consumers would negatively react to it.
This situation would damage the branding name of the company and public perception of it. The results will be that revenues, and subsequently profits, will decrease. As a result investors would be afraid of putting their money into this company and this would result in a lack of liquidity that will ruin the company.
A second group to be considered is the work force, labor force, of the company. They have their interest too in this respect. In the company has to go through a process of reformation, so too must the work force. As it comes out from the management team discussion, there will be significant changes in the work force structure and expectancies. This will definitely have an impact on the work force which will be ‘forced out’ of the self-created normality.
Thus, it is important, as Steve points out, to communicate with the work force and develop strategies that will retain the above medium work force moral and will minimize the negative effects that this can have on company’s productivity.
But the success of failure of the re-organization plan will depend on the way the work force responds to it.
For example, if the management team takes the risk of implementing this strategy and you find that it might be hazardous. How do you increase profits with a non-motivated work-force and a bad public relation and brand image?
On the other hand, the implementation of this risk based strategy can create opportunities in the immediate future. It can open new market segments and increase customer satisfaction because of the increase in high quality related products and services.
And there comes the ethical dilemma once again: shareholder satisfaction on expenses of another group of stakeholders (the work force) or maintain a satisfied work force at the expenses of less profits for the investors? Surely it is a dilemma where there cannot be no loosing because somebody has to “give up” from something in order to remain competitive in the market.
Last, but not least, are the consumers. They too are stakeholders in this enterprise. Ultimately are them who are going to consumer the products of Best Snacks. And here their interest is not only of having high quality products that are certified to be healthy and have no collateral negative impact on them. Their interest is also to have a product at an affordable price and not out of the reach.
Frame the “Right” Problem
Best Snacks intends to become a market leader in the fast food sector and a respected competitor into the food industry. Its goal is to offer to the general public, to the consumers, a healthy and high quality product; a product that can be acceptable by many groups within society in terms of cost. It also aims at having the best treatment and relationship with its work force and make sure that investors are satisfied with the trust they put into this company.
Best Snacks’ vision is to enhance the company’s market value and profits for the benefit of its shareholders.
At the same time, retain its social responsible approach toward its staff and work force along with a high quality service for its customers.
In order to achieve these objectives the necessary managements and operation plans should be made in order to make the correct steps toward the realization of the plan. The achievement or failure of the above mentioned objectives depend on the unleashing of innovative creativity of its actual staff. Innovation will be the tool that will guarantee success to this company.
Describe the “End-State” Vision
The problem of Best Snacks is that it is lacking that innovative creativity in business that allows a company to remain the top choice of consumers and with a ‘cash cow’ market positioning. Having the right innovative creativity does not mean to always introduce new products and services in the market. Even re-organizing the way you deliver those products and services or the network of production from supply to sales, still is to introduce a new innovation (Davila et al., 2006, p. 32).
In fact this is the major problem at Best Snacks. As we can see from the discussions at the management team meeting Best Snacks has introduced five new products in the market last year and still is performing worse than competition. The problem is that the input in innovation from the labor force has dramatically decreased during the last decade and the relationship work force – management has been becoming ‘colder and colder’. Also, continuing on ‘old’ models of business has led them to increasing costs with their supply and sale chains of production. The survey conducted by Sabrina on the labor force demonstrates the low morale the employees have and their scarce optimism for the future of the company.
It also tells us that proper communication from within the company (management –labor force) is lacking. In fact, the end state solution will depend on the cooperation of these long-time partners, management team and work force, and their mutual agreements of the ways to proceed. On the other hand, we have the point view of investors which want assurances of the stability of the company and innovative breakthroughs that will ensure a good market position. This good market position would be a guarantee for investors that their initial investment will return as soon as possible and their profits would be attractable.
The end state solution will depend on the achievement of a non-conflict position between these two different viewpoints.
Identify the Alternatives and Benchmarking Validation
In order to become the market leader the company should re-organize itself. As mentioned above, the management team has the duty of ‘listening’ to the labor force more and take into consideration its thoughts. This means to establish a feedback system within the company in order to collect labor force’s ideas and thoughts.
Also, the management team has to make significant changes in its production line capabilities by finding alternative ways to cut costs that have been gradually rising for the last years. Thus, it has to introduce new ways of managing production and not only new products to the market.
Evaluate the Alternatives
What is the result of a feedback system that collects ideas of the work force? The first effect will be that new product development will become easier and the management team will have plenty of ideas to develop what it likes.
Another thing to consider is that it will boost the morale of the labor force and make them contribute in company’s increasing performance. The third result would be that this situation will impact positively the ‘outside’ viewers. Investors will be attracted and invest their capital in this company.
Narrowed List of Alternatives
Create a feedback system for the purpose of listening to labor force ideas and thoughts regarding the process of production and delivery of products. This will not only bring more innovation to the company but also increase its performance as labor force morale will boost.
Find new alternative ways of organizing the supply chain in order to cut costs. The same should be done with the delivery chain of products. This could be achieved by investing in new technology for the supply chain or by the implementation of new ways of managing it as would be the use of business intelligence, for example.
Identify and Assess Risks
The major risk for Best snacks is timing. It may be ‘too late’ for it to re-structure its labor force management and listen to their feedback. This process could take too long and this would negatively impact the current market situation.
Also, the implementation of new management systems for the supply and delivery chains means additional costs to be added to the actual the company already has.
The final risk is that the management team will fail in re-establishing a positive atmosphere within the company with its labor force and thus damage company’s reputation.
Make the Decision
Even though the risks mentioned above are serious still the management team should carry on with its plan.
Develop and Implement the Solution
A new feedback system should be introduced in order to collect labor force’s ideas and thoughts. Also, different training sessions could be held with the work force in attempts to motivate it in increasing its performance. For this reason even a new system of incentives should be introduced with the scope to motivate the staff to promote new innovative ideas.
On the other hand, the implementation of new innovative managing techniques will be the driving factor of decreasing costs for the company. The implementation of business intelligence techniques and methods will dramatically improve performance in the supply and delivery chains and decrease the overall company’s operating costs.
Evaluate the Results
The results should be evaluated with measures that are specific, measurable, attainable, realistic and timely. If this is done correctly then we can have a correct evaluation (Chlondowski, 2007).
The number of the actual work force that decides to pursue the trainings offered by the company is a specific measure of the implementation of the first phase of the plan by the Human Resources. This along with the other measure of the number of workers that are going to contribute in ideas for product development within the first five to six months from the beginning of the implementation of the plan. These two are also measurable measures because the company can calculate the number and advertise the results in its favor if the percentage of workers that have relocated to other local companies or that have taken the training is considerable.
Another important factor is the increase in performance of the work force and the decrease in costs of the supply and delivery chains.
Another evaluation measure would be the image created by Best Snacks in the eyes of the public. This can be tested by surveys. The same can be done in Wall Street to see the perception that investors have for the company.
Conclusion
In conclusion, I might say that Best Snacks has to take some difficult decisions.
The new market era has led companies all over the world reshape their structures and change their policies time after time. Competition has become fiercer and this has raised new ethical and moral issues regarding the relation between business and the people who both work for the business, or this late serves (Miller, 2006, p. 2).
By making a mixture of management staff members and work force treatment, best Snacks is trying to remain both loyal and positive toward its local work force, retain its creative members and not forget its purpose of benefitting its shareholders. For this reason it has drafted a plan that has all the capabilities of attaining positive results for both the company (its stakeholders) its young talented professionals and the work force.
References
Chlondowski, Z. (2007) “S.M.A.R.T. Site: attributes reference table”. S.M.A.R.T. Linux. 2009. Web.
Davila, T.; Epstein, M.; Shelton, R. (2006) Making Innovation Work: How To Manage It, Measure It, and Profit From It, Wharton School Publishing.
Gomez-Mejia, Luis R.; David B. Balkin and Robert L. Cardy (2008). Management: People, Performance, Change. 3rd edition. New York: McGraw-Hill.
Jones, R. G. (2004). Organizational Theory, Design, and Change: Text and Cases, Fourth Edition. Published by Prentice-Hall, a Pearson Education Company.
Miller, K. (2006). Organizational Communication: Approaches and Processes. 4th edition. McGraw-Hill Company: London & New York.
Simon, H. (2006). Administrative Behavior. 4th edition. Blackwell Publishing: London.
Table 1: Issues and Opportunities Identification
Table 2: Stakeholder Perspectives and Ethical Dilemmas
Table 3: Analysis of Alternative Solutions
Table 4: Risk Assessment and Mitigation
Table 5: Pros and Cons of Alternative Solutions
Table 6: Optimal Solution Implementation Plan
Table 7: Evaluation of Results
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