Organizational Management Challenges at Fashion Unlimited

This case study analyzes the organizational management challenges faced by Fashion Unlimited, a Canadian fashion retailer, due to the Least-Developed Country Tariff program. The report identifies issues such as rising operational costs, lack of skilled labor, and increased competition. A root cause analysis points to the tariff program as the primary driver. The study explores alternative expansion locations, including Bangladesh, Indonesia, China, and Mexico, evaluating their infrastructure, labor costs, and regulatory environments. Mexico is recommended as the optimal expansion location due to its developed infrastructure and cost-effective skilled labor force. The report includes an implementation plan for market entry into Mexico, outlining goals, activities, responsible parties, and timelines, as well as a monitoring and control mechanism to ensure operational efficiency. The case study concludes that expanding into Mexico will help Fashion Unlimited minimize operational costs and improve manufacturing processes.

Running head: ORGANIZATIONAL MANAGEMENT
ORGANIZATIONAL MANAGEMENT
Name of the student
Name of the university
Author note

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Executive summary
The research will focus on identifying the different issues that are faced by a Canadian
organization, Fashion Unlimited, while doing business in the Canadian markets due to the
imposition of Least-Developed Country Tariff program. The research will undertake a root cause
analysis of the issues that are faced by the company and the manner in which the issue might be
mitigated through expansion in foreign countries. The report will enumerate the different
alternatives and will finally recommend a company for suitable expansion.

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Table of Contents
1. Introduction..................................................................................................................................3
2. Issue Identification.......................................................................................................................3
3. Operating Environment...............................................................................................................4
4. Root Cause Analysis....................................................................................................................5
5. Alternatives..................................................................................................................................6
6. Recommendation.........................................................................................................................7
7. Implementation Plan for making a market entry in Mexico........................................................8
8. Monitor and Control..................................................................................................................11
9. Conclusion.................................................................................................................................13
References......................................................................................................................................14

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1. Introduction
The operations that are designed by organizations help the same in gaining a competitive
advantage over the other players in the markets. However, the different trade tariffs and
operational regulations that are encountered by the organization affect the operations. The
discussion will focus on identifying the key issues that are faced by Fashion Unlimited in
Canada. Moreover, the report will also illuminate the different recommended actions that might
be undertaken by the business through the implementation and monitoring plan.
2. Issue Identification
The major issues that ate faced by the concerned organization, Fashion Unlimited, are
being discussed in this section of the research.
 The concerned organization faced an issue relating to lack of skilled labor force while
adhering to the huge demands of the customers. The unavailability of skilled workforce
has affected the productivity of the organization while responding to the needs of the
customers. On the other hand, the imposition of strict labor laws has affected the smooth
functioning of the processes. Regulations relating to the overtime and wages have
curtailed the capabilities of the organization to facilitate overseas production. The smooth
functioning of the systems of the business is hindered by the lack of proficient labor
supplies and the regulations, which affected the overall operations of the business.
 The major challenge that is faced by the organization was the rising operational costs,
which hindered the venture in providing the customers with better quality products and
services. On the other hand, the imposition of the Canada’s Least-Developed Country

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Tariff program has made it impossible for the concerned organization to continue with
the domestic production procedure. The rising labor costs and the feasibility of the new
firms to enter the Canadian markets have affected the operations of the business while
operating in diverse international markets. On the other hand, the objective of the
organization related to economic, social and environmental sustainability is hindered
through the imposition of the Canadian Least-Developed Country Tariff program, which
removed all taxation and duties for the new entrants. The major issue that is faced by the
organization is related to finding factories that might assist the business in undertaking
the smooth functioning of the operations.
3. Operating Environment
The concerned organization is a Canadian owned business firm, which undertook retail
operations. The organization undertook the distribution operations through several large
department store chains and supported the online buying options for the US customers. However,
the implementation of the Least-Developed Country Tariff program by the Canadian government
affected the flow of operations that were undertaken by the business (Blonigen et al., 2013). The
relaxation in the import tariffs has enabled the businesses from different least developed nations
to enter the Canadian markets and thereby enhancing the rate of competition in the domestic
markets. On the other hand, the imposition of labor rights and regulations related to wages has
affected the capabilities of the concerned organization in reducing the operational costs. It has
challenged the manufacturing capabilities of the concerned organization while manufacturing
their units in the domestic grounds.

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4. Root Cause Analysis
The visible challenge that is encountered by the concerned organization is dependent
on the enhancement of competition in the Canadian domestic markets and the growing
activity of the new entrants. It has challenged the capabilities of the concerned organization
in facilitating the manufacturing and other activities in the domestic markets of Canada. On
the other hand, the different developments that are made by the new organizations in the
Canadian markets have affected the capabilities of the concerned venture in upholding the
sustainability needs of the same. On the other hand, the lack of skilled workforce and the
imposition of the regulations relating to labor rights have curtailed the capabilities of the
concerned organization in manufacturing clothing. The increasing cost of labor and the lack
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of skilled labor in the Canadian markets have challenged the capabilities of the organization
in maintaining the efficiency of the manufacturing units.
However, the root cause of the challenge that is being faced by the concerned
Canadian organization is dependent on the imposition of the ‘Least-Developed Country
Tariff program’, which allowed companies from around 49 countries to undertake free trade.
The removal of the duties on imports for the companies from 49 countries has enhanced the
competition in the Canadian markets. On the other hand, it also brought around modifications
in the labor rights, which affected the capabilities of the concerned organization in upholding
the efficiency of the manufacturing units.
5. Alternatives
The different alternatives that might be considered by the concerned organization are
Bangladesh, Indonesia, China and Mexico. The evaluation of the alternatives will help the
organization in making the right choice for expanding their venture in accordance to the needs of
finding proficient labor force and infrastructure for manufacturing. In this relation, Bangladesh
undertook 80% exports, which contributed significantly to the GDP of the nation (Marchand,
2012). However, it has been researched that the nation has poor infrastructural growth and
insufficient power supplies (Krishna, Poole & Senses, 2014). According to a report of Japan
External Trade Organization, Bangladesh is counted as second lowest average monthly wage in
Asia. It will be helping the concerned organization in making their expansion in Bangladesh.
However, the lack of proficient infrastructural growth in the nation might challenge the
manufacturing capabilities of the concerned organization.

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Indonesia inherits different issues relating to inadequate infrastructure, complex
regulatory environment and lack of skilled workforce. The issues that are prevalent in Indonesia
might affect the capabilities of the concerned organization in supporting the needs of the same
related to minimization of the operational costs. However, the investment-friendly business
environment would help the concerned organization in undertaking expansion of the venture.
China has a greater production capacity through the implementation of relevant technology. The
country has proficient infrastructure for supporting sophisticated manufacturing facilities and
inherits a large amount of suppliers and logistics networks. The infrastructural facilities would
help the concerned organization in facilitating the manufacturing operations in accordance to the
needs of the business. However, the increased rate of wage might affect the capabilities of the
organization while making an expansion in the country. The higher cost of labor has challenged
the growth of many companies in China.
On the other hand, Mexico has subtle infrastructural advantages relating to developed
technology, transportation and ports. It will be helping the concerned organization in upholding
the efficiency of the manufacturing, distribution and supply of the offerings. On the other hand,
the availability of low cost skilled workforce whose age ranges from 20 -49 years will help the
business in supporting the manufacturing process. It has been reported that the labour supply in
the organization comprises of production labour to highly skilled professionals. It will be
supporting the concerned organization in upholding the efficiency of the operations in
accordance to the needs of the business.

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6. Recommendation
The concerned organization must take steps to expand their venture in Mexico due to the
higher infrastructural growth that will assist the business in developing suitable manufacturing
activities. On the other hand, the lower cost of professional labor would support the concerned
organization in facilitating an uninterrupted manufacturing operation. The average age of the
labor force in Mexico is between 20 -49 years, which will help the business in recruiting skilled
youthful employees to ramp up the production process (Beghin et al., 2012). The abundance
supply skilled labors and the infrastructural growth will help the organization in upholding the
efficiency of the operations as per the concerns of the business. Therefore, the concerned
organization must take steps to expand their venture in Mexico, which will help the concerned
business in minimizing the cost of operations and facilitate continuous improvement in the
manufacturing process.
7. Implementation Plan for making a market entry in Mexico
Goals Activities Person
responsible
Timeframe Rationale
Market research  Undertaking
assessment of
competition,
economic
situation, demand
of the consumers
and labour supply
in Mexico
Market analyst 2- 3 months Market
assessment helps
an organization
in identifying the
market prospects
that will be
encountered by
the same while

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making an
expansion in the
foreign markets.
Creation of
market entry
strategy
 The study of the
market and the
identification of
the prospects will
be followed by
the creation of a
market entry
strategy.
 The market entry
strategy will be
merger in which
the organization
will merge its
operations with
an existing textile
manufacturing
organization in
Mexico (Smale
& Hilbrecht,
2014)
Board of
Directors
5 months The market entry
strategy will be
helping the
concerned
organization in
undertaking
systematic steps
of upholding the
efficiency of its
operations in
Mexico
Consultation with  Undertaking CEO 6 months The consultation

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the stakeholders meetings with the
stakeholders
 Gaining the
consensus of the
stakeholders
while making the
same aware of the
expansion
decision that is
being undertaken
by the business
 Planning through
consultation for
the expansion of
the business in
Mexico
with the
stakeholders will
be helping the
organization in
facilitating
collaborative
operations. On
the other hand,
the
communication
with the
stakeholders will
assist the
business in
undertaking
informed
decisions.
Cost and resource
allocation
 Reviewing the
business plan and
allocating
resources as per
the needs of the
business
 Allocating costs
Accountant of
the organization
4 months The budgetary
activities of the
organization will
support in
identifying the
capabilities and
competencies
that will help the

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for the
modifications in
the business
processes while
operating in
Mexico
venture in
undertaking
aggressive
expansion in the
Chinese markets.
It will also assist
the business in
allocating
resources as per
the needs of the
business
Implementation  Implementation
of the market
entry strategy
through
collaboration with
the host
organization in
Mexico
Project manager
and project
board
7 months Implementation
of the project
will assist the
organization in
reducing the
operating
expenses through
cheap labor and
ease of
manufacturing
8. Monitor and Control
Monitoring and control mechanisms are undertaken by the organizations in order to
maintain the efficiency of the operations as per the needs of the business (Mei & Srinivasan,