LJ Cotton: A Report on Leadership, Change, and Business Strategy

This report examines the case of LJ Cotton, a UK-based apparel company, and its journey from success to decline, focusing on the critical role of leadership. Founded by Mia, the company initially thrived due to her participative leadership style, strong corporate social responsibility initiatives, and focus on organic cotton. However, after her death, the company faced a downturn due to the autocratic leadership of her children, Franco and Maria. The report analyzes the negative impacts of their leadership style on employee motivation, supplier relationships, and strategic decision-making. It also assesses the company's challenges in maintaining its corporate social responsibility commitments and the environmental concerns associated with its operations. The report concludes with recommendations for LJ Cotton to implement new leadership styles, strategic management policies, and improved communication to revitalize its brand and regain market share. The analysis highlights the importance of adaptive leadership and its direct impact on business performance and sustainability.

CHANGE & LEADERSHIP

Table of Contents
Executive Summary..............................................................................................................................3
Introduction..........................................................................................................................................4
Case diagnosis and analysis..................................................................................................................4
Recommendation..................................................................................................................................7
Conclusion............................................................................................................................................7
Appendices...........................................................................................................................................8

EXECUTIVE SUMMARY
This study focus on LJ Cotton which is a UK based store. The company expanded its
business in first five years of start-up to destinations like Paris, Barcelona, Milan, Budapest, Lisbon
and Berlin. The success factor of this company was the leadership qualities of its CEO, Mia. Mia
along with her husband started this venture to support the less privileged with the help of its
corporate social responsibility strategy.
As LJ Cotton is a family owned business, the team of directors involved Mia and her
children. Being the head of the business, Mia was majorly involved in all the business activities.
The main objective of the company was to use organic cotton in the apparels. This was the main
vision of LJC to promote corporate social responsibility. The founder of the company maintained
friendly relationship with the staff and management. She believed in participative leadership
style,where the head involves everyone in the process of decision making . The company was
expanding and flourishing till Mia was involved in the business. The company met with huge sale
demand and generated success out of it. Soon LJC became the elite name in the fashion industry.
Everyone including middle class and elite class preferred to LJC's clothes.
After the death of the founder, the company saw a serious downfall in profit as well as in
the business cycle of the company. The new directors of company lacked in leadership ability, their
style was more autocratic. This led to series of activities leading to de- motivation of employees,
which hampered the business of the company. Through the analysis of these issues
recommendations are generated to promote business of the company. Both the new appointed
directors will have to start from scratch and work on innovation and designing of the products.

INTRODUCTION
The main objective of this report is to study and analyse main issues which are faced by LJ
Cotton Company which are currently impacting the business of the company. This company was
founded by Mia in the year 1987. With its first store in London Oxford Street LJC soon became the
brand image for even the most elite group of UK (White, 2004). The price of the products of the
company was comparatively low as compared to other leading brands. It became a brand image
because it used organic cotton and further due to promotion of corporate social responsibility as its
main agent. The founder made it a point to promote the apparels of the company in a way that it
could reach all the masses of market (Davies, 2006). The best method used by Mia was promoting
through magazines along with celebrity endorsements.
On contrary to the successful start of LJC, it soon saw a backlash after the death of the
founder. The management suffered due to ill decision making of the new appointed directors. This
low level of decision and strategy led to various issues in the company. The report studies and
researched on the issues faced by the company and presents recommendation to rectify these
problems for the future.
CASE DIAGNOSIS AND ANALYSIS
The study of key issues faced by LJ cotton through the case study helps to understand how
various factors of management affect business of the company. The major issues faced by the
company are analysed and implications drawn are discussed below.
 Leadership- Inappropriate leadership style followed by the new directors ,Maria and
Franco generated negative effect on the employees (Porter-O'Grady, 2014). They
were rigid and followed autocratic style of leadership within the organisation. On the
contrary, Mia while running the business was participative and friendly with the
managers as well as staff members. She herself actively visited many fashion shows
and events in order to generate ideas for the new fashion line. She was involved in
decision making around all of her international stores including Bangladesh. The
organization members appreciated her sense of understanding and management
skills, as it bought out the better task in them. Whereas both her children were
lacking this evident quality. They avoided the involvement of managers in the
decision making process and even showcased their power of the position over other
members. As an example, Maria insisted to visit the fashion show only after she was
approached by the fashion team, about how important it is for them to seek new
fashion trends from the show. She rejected the request of other managers to join her
and did not even attend the full show. This form of autocracy led to distrust among

the management and team members of LJC (Gardner, 2012). Franco and Maria's
controlled supervisory behaviour promoted communication errors and de-motivated
the employees at LJ Cotton. They did not involve the team members in day to day
activities and poorly delegated the work authorities (Anderson and Anderson, 2010).
The main problem faced by the company was due to the fact that, both Maria and
Franco lacked in anticipating future problems and issues in advance. They just
enjoyed the perks of position and power and lacked in understanding the
consequences of poor managerial skill of the business.
 Improper relationship with the supplier- Franco's poor communication skills ruined
the 20 year old relation with the supplier in Bangladesh. Due to budget crisis, the
directors decided to cut back many services provided by the company. All previous
investment like crèche, kindergarten and school club facilities were cut down by the
directors (Zaki, 2012). This behaviour of directors provoked the supplier to be
rational. This reaction further made the situation worse as Franco decided to give an
ultimatum to the supplier in Bangladesh about the decision to renegotiate the
contract. Rise in demand of ethical fashion clothes in the country also infuriated the
relationship between supplier as well as the management. With these ongoing
problems in the company, UK was hit by financial crisis in the year 2008 in the
country. Lack of strategic decision making prompted many store managers to exit the
company and found alternative job despite being hit by the crisis. LJC lost its quality
and design standards due to low interest level of Maria and Franco. Mia on the other
hand used to effectively organize the work among her subordinates. She used to stay
updated about the stores information (Wei, Johnson and Piggott, 2004) . Her genuine
care for the managers and staff members built a cordial relationship between the
parties. Her design and new ideas always helped the design team to incorporate
clothes with innovation. Lack of cordial relationship among director and supplier
created a communication gap affecting the business of the company, particularly in
Bangladesh.
 Corporate Social Responsibility- The case study shows that the company lacked in
performing its major objective for society (Othman, Ruslan and Ahmad, 2012).
Financial incapability, safety of labour, production level, quality of goods
unintentionally caused environmental pollution. Apart from these LJC also violated
wage laws and labour safety issues for workers in Bangladesh specifically. This non
implicated the basic aim of social responsibility. LJC's aim to make the apparels
affordable for the masses was also an subject to question as they were using organic

cotton instead of regular. Organic cottons are costly as compared to the normal
cotton (Mahdinezhad and et.al., 2013). This enhanced the cost of the products instead
of lowering them. LJC method to promote Corporate responsibility also bought out
competitive disadvantages along with it. The competitor started to lower their
product costs as compared to the LJC. The company had to faced criticism from
customer grounds, as their actions did not resembled their motive. This ruined the
corporate image if the company. LJC started loosing its charm among the customers
and fashion industry due to talent drain. Lack of ideas regarding new plans for social
development made it difficult for the company to flourish (Vaccaro and et.al., 2012).
They had to stick with their old and standard resolution where their competitive
brands were striking to work for new development. In order to meet their financial
crisis levied upon the company the directors forgot to bounce for new development
for corporate and social upliftment.
 Environmental affect- Pollution caused by the fibres used in the company was a great
issue faced by the company. The working condition of cotton farmers were sub
standardised. Though Mia took great efforts in improving the condition for the
farmers. Conventionally grown cotton is considered to be the worlds dirtiest crop. As
high amount of pesticide is used by the company for the growth of the crop. Farmers
have to work under large pesticide prone sites. This not only harms the human lives
both also impacts on the wildlife and disturbs the ecological balance of the
environment (Ingram, 2014). These chemicals affect the water supply chain and the
soils of the lands. Health risks are more larger on the humans as lots of
defectivenesses. The machineries in the textile industry also cause a great risk on
environment due to sound and air pollution (Lawler and Bilson, 2013). This con of
cotton makes it difficult for the company to make the product low price. Alternative
fibre has to be used in order to minimise these risk of cotton farming. Organic cotton
contains low risk and is grown in much more eco-friendly way. Use of alternative
fibres made it difficult for LJC to reduce the cost,as the cost raised it was difficult to
keep the products on low affordability grown. Mia had a vision to promote social
development and provide low affordability products to the consumers. This was the
major reason why LJC's product were famous in the starting years of success and
were purchased by every class due to low price level (Hahm, Jung and Moon, 2013).
The new director lacked to properly incorporate this skill in their business
development which was the major issue for setback of the company.
The above analysed factors lights the fall back of the company from its successful reining

period. These factors deeply impacted on the business cycle of the company. To shine back in the
market LJC had to enter into new low price market, it has to rebrand the company objective in the
market.
RECOMMENDATION
 LJC should implement new managerial skills in the employees. Its is required to
recruit talented individuals which can guide the directors in their decision making.
This will help the top level management to implicated new leadership style. Both the
children of Mia should understand the business application that the founder
implemented in her business style (Randall, 2006). This will help them to sustain in
the market and will re-establish their brand image in the market.
 LJC should implement new strategic management policies in the company. As the
company failed to rebrand itself in the low-cost market, it has given rise to many
new entrants in the competition. Primark, C&A, H&M and Tesco are among the
competitors which are building their image in the market with low cost product. The
company should plan for strategic development to improve the lack of effective
management in the company.
 LJC should work on the superior subordinate relationship. Improvements are
required in order to promote better communication skills. As the company presently
lacks in cordial relationship between the employees it is important for the
management to build the lost mutual trust among the employees.
CONCLUSION
The analysis done on the LJ Cotton company forecasted major issues related to the
leadership style of the directors. The autocratic and dominating behaviour of the leaders of the
company forced the company towards downfall. To ensure success and re-establishment it is
important for the leaders to learn participative technique of leadership. With the use of strategic
management and communicational tools the company will be able to re-brand its lost vision in the
future.

REFERENCES
Books and Journals
Anderson, D. and Anderson, A. L., 2010. Beyond Change Management: How to Achieve
Breakthrough Results Through Conscious Change Leadership. 2nd ed. John Wiley & Sons.
Davies, B., 2006. Developing a Model for Strategic Leadership in Schools. Educational
Management Administration & Leadership. 34(1). pp.121-139.
Developing change and leadership capabilities. 2004. Strategic Direction. 20(6). pp. 24-26.
Hahm, S. D., Jung, K. and Moon, M. J., 2013. Shaping public corporation leadership in a turbulent
environment. Public Administration Review. 73(1). pp. 178-187.
Lawler, J. and Bilson, A., 2013. Social work management and leadership: Managing complexity
with creativity. Routledge.
Mahdinezhad, M. and et.al., 2013. Transformational, Transactional Leadership Styles and Job
Performance of Academic Leaders. International Education Studies. 6(11).
Othman, A., Ruslan, N. and Ahmad, I. S., 2012. Intercultural communication in the Malaysian
Vision Schools Implications for the management and leadership in a multicultural primary
school. Management in Education. 26(4). pp. 199-206.
Porter-O'Grady, T., 2014. The future of leadership. Nursing Management.
Randall, R., 2006. Editor's letter. Strategy & Leadership. 34(3).
Vaccaro, I. G. and et.al., 2012. Management innovation and leadership: The moderating role of
organizational size. Journal of Management Studies. 49(1). pp. 28-51.
Wei, W., Johnson, S. and Piggott, S., 2004. Leadership and management principles in libraries in
developing countries. Binghamton. N.Y.: Haworth Information Press.
White, J., 2004. Strategic Planning and the Small Business. Industrial Management & Data
Systems. 84 (11/12) pp. 8 – 12.
Zaki, A., 2012. Influence of Emotional Intelligence on Employees’ Leadership Skills –Strategic
Approach towards Organizational Stability. IOSR Journal Of Business And Management. 4(3).
pp. 32-40.
Online
Gardner, K. P., 2012. The art of leadership. [Online]. Available
through:<http://gradworks.umi.com/35/19/3519990.html>. [Accessed on 16th November 2015].
Ingram, D., 2014. Transformational Leadership Vs. Transactional Leadership Definition. [Online].
Available Through: <http://smallbusiness.chron.com/transformational-leadership-vs-
transactional-leadership-definition-13834.html>. [Accessed on 16th November 2015].

APPENDICES
Appendix I – SWOT analysis
The table below shows SWOT analysis done on the LJ Cotton company.
LJ Cotton strengths are its skills and availability of organic cotton in the market. This helps
the company to manufacture low cost product in the market. Their are vast opportunities for
expansion and innovation in design of the product. The company has advantages over its
competitors on many new and differentiating factors. The setbacks that company faces are low
knowledge scale and low efforts of the existing directors. Major threat that the company faces in the
near future are technological obsolescence and high tariffs in international market. The company
might also face high competition from existing brands in the international market.

Appendix II – PEST Analysis
Political Economic  Socio-
cultural
Technologic
 Employment
laws
 Political
stability
 Environment
al regulations
 Trade and
tariff
restrictions
 Tax policy
 Economic
stability
 Economic
growth
 Interest rates
 Inflation rates
 Exchange
rates
 Population
growth rate
 Age
distribution
 Career
attitudes
 Consumer
behavior
 Religion and
culture itself
 Distribution
and
communicati
on channels
 Technology
incentives
 Automation
 Rate of
technological
change
 Environment
al and
ecological
aspect
 Production
level