Case Study: Leadership Failures and Management of WOW Sight & Sound

This assignment provides an in-depth analysis of the WOW Sight & Sound case study, focusing on the leadership and management failures that led to the company's decline and eventual bankruptcy. The analysis identifies the core problems, including poor retail conditions, ineffective leadership, and detrimental decision-making regarding online sales and pricing strategies. The study applies situational leadership theory and the acceptance theory of authority to understand the management's actions during the crisis. It evaluates the co-founders' and management's roles, highlighting the impact of their decisions on the company's financial stability and overall operations. The conclusion summarizes the key findings, emphasizing the importance of vigilant leadership and sound decision-making to prevent similar outcomes. The assignment recommends that other organizations learn from WOW's mistakes to improve their operations and avoid financial distress.

Running head: MANAGEMENT ACCOUNTING
Management Accounting
Name of the Student:
Name of the University:
Author Note

1MANAGEMENT ACCOUNTING
Table of Contents
1. Introduction and Problem identification:...............................................................................2
2. Discussion:.............................................................................................................................2
3. Conclusion:............................................................................................................................5
4. Recommendation:..................................................................................................................6
References and Bibliography:....................................................................................................7

2MANAGEMENT ACCOUNTING
1. Introduction and Problem identification:
The main purpose of the study is to analyse the case of WOW (out of) Sight & Sound,
as it would help in understanding the problems related to management. The identification of
management related problems or potential problems in the case study has been analysed for
understanding the implication it had on the operations of the company. After the relevant
detection of the problems, two different theories are mainly used for relating one of the
functions of management that is detected in the case study. Relevant recommendation is
mainly conducted that might allow future companies to cope up with the identified problems.
Thus, leadership role is considered to be complete when leaders are able to achieve the
desired goals, while maintaining company values.
The major problem that was detected from the case study was the declining retail
conditions and poor management leadership of the company. The retailer mainly indicated a
fall in their financial progress during 2010, which led to the augmentation of the online store.
However, the decisions that was made by the management regarding the discounts on the
online sphere mainly increased the level of debt for the company. The poor leadership
qualities and decision making process led to the decline in financial stability of the company,
which in turn lead to its demise.
2. Discussion:
The down fall of WOW (out of) Sight & Sound was mainly conducted due to the poor
retail conditions and frightened consumers in Australia. The fall of the company was mainly
instigated during 15 stores and 500 employees, which was conducted during 2010. The poor
leadership skills of the organisation were mainly forcing the organisation to enter in to
insolvency, as hr company was utilising their supply chain to support the online presence by
providing low cost goods to the customers. However, the low-cost goods were only for

3MANAGEMENT ACCOUNTING
attracting new customer and benefitting the company in the long run. However, the low-
priced products loss was endured by the organisation which increased their debt, while
hampering the overall sales from their retail stores in 15 locations around Australia.
Therefore, the decisions made by the management led to the selloff of their property for
covering their debt, which mainly hampered the overall progress and led to the company on
the brink of bankruptcy (Northouse, 2018). The co-founders of the organisation were mainly
held responsible for the insolvency condition, as they stood by doing nothing, when the
company’s assets were being sold off one by one to support the crumbling debt of the new
online store. Hence, the situation of WOW (out of) Sight & Sound can be linked with two
different theories, which are depicted as follows.
Situation Leadership Theory:
During 1969, the Situation Leadership Theory was developed, which was mainly
applied when dealing with contingencies. The theory mainly focuses on assessing the
effectiveness of a leader on the basis of actions and characteristic behaviour during the
decision making process on a difficult situation. Moreover, the overall theory would mainly
focus on the case study of WOW (out of) Sight & Sound, where the decisions that was made
by the management during the critical situation would be analysed. Hence, the leadership
theory mainly indicates that relevant leadership ability to modify their actions and behaviour
would help in improving staff maturity (Lussier & Achua, 2015). The process could be
conducted by utilising several directive behaviour and supportive behaviour, which helps in
improving the staff quality. There four different types of leadership behaviours, which needs
to be present on leaders of the organisation, as without the leadership qualities the head of the
company will not be able to make significant decisions. The four different types of leadership
behaviour are directive behaviour, selling behaviour, participating behaviour and trust
building behaviour.

4MANAGEMENT ACCOUNTING
The different forms of leadership behaviour directly state about the mentality of the
head in making appropriate decisions. Directive behaviour demonstrates about the high level
actions, where everything in the organisation needs to be passed through him, where he/she
would be the last one to work on the activity. The selling behaviour in a leader increases the
high support for the staff, as the leader being directive is gaining additional support from the
work force. The participating behaviour of the leader indicates that they have low supportive
and directive behaviour during a delegate situation (Antonakis & House, 2014).
Therefore, the case study of WOW (out of) Sight & Sound needs to be analysed on
the basis of the leadership behaviour to understanding the actions that was made by the
management during the time of crisis. Hence, the case study is analysed on the basis of
situational leadership, where the actions taken by the management is mainly evaluated on the
basis of the theory. Therefore, the actions taken by each employee during the adverse
conditions is mainly analysed, as the same course of action could be prevented by the leaders
during adverse situation. Thus, the main function of the leader is to determine the levels of
employees’ role and levels of psychological maturity, which would help in adjusting their
behaviour in a way that suits in a most effective manner (Tourish, 2014).
Acceptance Theory to Authority:
The second theory is used for analysing the case of WOW (out of) Sight & Sound is
the acceptance theory to authority, as it helps in understanding the informal groups that
affects the overall organisation. The acceptance theory to Authority was mainly depicted by
Chester Barnard, where he highlighted that formal organisations, where informal groups
slowly turn into informal organisation within the main organisation. Therefore, from the
analysis, it is detected that the values and beliefs of the informal groups will directly have
negative impact on culture of the organisation. Furthermore, the information of WOW (out

5MANAGEMENT ACCOUNTING
of) Sight & Sound is mainly evaluated on the basis of acceptance theory to authority, where
the company needs to be both efficient and effective in conducting their operations. This
would ensure that the management meet the goals of its organisation on a judicious method,
where both the company goals and workers needs are fulfilled on a timely manner. Hence,
the efficiency of the organisation needs to be analysed for understanding the workers
satisfaction (Rottmann, Sacks & Reeve, 2015).
Therefore, the acceptance theory to authority requires that the workers are the one
who determine the authority of the managers. This would allow the managers to impose
decisions on the employees and adequately comply with the orders. Thus, in accordance with
the theory, employees need to embrace the fact that the manager is the one who will give the
overall orders within the organisation. Hence, it is important that the investors and customers
of the organisation see that the overall management is responsible for the decisions making
process. The analysis of the case study under the acceptance theory directly indicates that the
management was responsible for all the activities that was being conducted within the
organisation. The wrong decisions that were made by the co-founders and management of the
company was the main reason behind its bankruptcy (McCleskey, 2014).
3. Conclusion:
The overall assessment aims in analysing the case of WOW (out of) Sight & Sound,
where the actions of the management is mainly analysed for understanding the problems that
led to its bankruptcy. The decisions of the management and directors are mainly analysed,
which has depicted that the course of action taken by the superiors was drastic, which led to
the increment in debt accumulation. The declining sales in retail stores was the main reason
behind the opening of an online store. However, the decisions for selling goods at discounted
prices and incurring loss was the most unprofessional decision that was made by the

6MANAGEMENT ACCOUNTING
management to increase their online presence. The different levels of theories are mainly
analysed for understanding the decisions that was made by the leaders of the organisation.
Theories such as Acceptance Theory to Authority and Situation Leadership Theory is mainly
analysed for understanding the process of the organisation, which led to its demise.
4. Recommendation:
The case of WOW (out of) Sight & Sound is a classic example of problems that was
conducted by the leaders of the organisation while making certain decision to improve their
presence in the market. The issues in WOW needs to be minimised by other organisation for
securing the overall performance and reducing the chance of a bankruptcy in future. The
mistakes made by the company needs to be analysed by other companies, as it would help
prevent the occurrence of the chain of events, which led to the bankruptcy of the
organisation. Hence, the decisions of incurring a loss for promoting discounted products to
customers’ needs to be avoided by companies, as it would have negative impact on the
overall performance of the company. Thus, leaders of the organisation need to be vigilant in
making appropriate decisions, which could improve the operations and do not increase the
level of debt. Thus, managers of the organisation need to take note from the actions and
decisions of WOW for adequately improving their operations.

7MANAGEMENT ACCOUNTING
References and Bibliography:
Antonakis, J., & House, R. J. (2014). Instrumental leadership: Measurement and extension of
transformational–transactional leadership theory. The Leadership Quarterly, 25(4),
746-771.
Arena, M. J., & Uhl-Bien, M. (2016). Complexity leadership theory: Shifting from human
capital to social capital. People and Strategy, 39(2), 22.
Chemers, M. (2014). An integrative theory of leadership. Psychology Press.
Dinh, J. E., Lord, R. G., Gardner, W. L., Meuser, J. D., Liden, R. C., & Hu, J. (2014).
Leadership theory and research in the new millennium: Current theoretical trends and
changing perspectives. The Leadership Quarterly, 25(1), 36-62.
Effelsberg, D., Solga, M., & Gurt, J. (2014). Getting followers to transcend their self-interest
for the benefit of their company: Testing a core assumption of transformational
leadership theory. Journal of Business and Psychology, 29(1), 131-143.
Lussier, R. N., & Achua, C. F. (2015). Leadership: Theory, application, & skill development.
Nelson Education.
McCleskey, J. A. (2014). Situational, transformational, and transactional leadership and
leadership development. Journal of Business Studies Quarterly, 5(4), 117.
Meuser, J. D., Gardner, W. L., Dinh, J. E., Hu, J., Liden, R. C., & Lord, R. G. (2016). A
network analysis of leadership theory: The infancy of integration. Journal of
Management, 42(5), 1374-1403.
Northouse, P. G. (2018). Leadership: Theory and practice. Sage publications.

8MANAGEMENT ACCOUNTING
Rachmawati, A. W., & Lantu, D. C. (2014). Servant leadership theory development &
measurement. Procedia-Social and Behavioral Sciences, 115, 387-393.
Rottmann, C., Sacks, R., & Reeve, D. (2015). Engineering leadership: Grounding leadership
theory in engineers’ professional identities. Leadership, 11(3), 351-373.
Tourish, D. (2014). Leadership, more or less? A processual, communication perspective on
the role of agency in leadership theory. Leadership, 10(1), 79-98.