Fundamentals of Management: Puma's Business Management Report

This individual report analyzes Puma's business management practices, covering key areas such as planning, organizational structure, leadership, and control. The report begins by examining Puma's industry, identifying its competitive landscape and the business-level strategy of differentiation it employs. It then delves into Puma's organizational structure, highlighting its functional structure, hierarchical levels, and span of control. The report also assesses the leadership style of Puma's CEO, Bjorn Gulden, and the motivational techniques used. Finally, it explores the control mechanisms in place, including output performance standards and organizational culture. The report concludes with an overview of Puma's strategies and their impact on the company's performance.

YPC INTERNATIONAL COLLEGE
BA (hons) Business Management
Assignment 2 Individual Report (BBM2042F3)
Fundamentals of Management
4054YPCBM
Prof. Dr. Mooi
BBM2042F3
LJMU ID:
937336

Table of Content
Planning Page 1
(25%)
1. What is (are) the main industry(ies) in which the company competes? (5)
2. What business-level strategy does the company seem to be pursuing in this industry?
Why? (10)
3. What corporate-level strategies is the company pursuing? Why? (5)
4. Have there been any major changes in its strategy recently? Why? (5)
Structure Page 2
(25%)
1. What kind of organizational structure does the organization use? If it is part of a
chain, what kind of structure does the entire organization use? (10)
2. How many levels are there in the organization’s hierarchy? (5)
3. Describe the span of control of the top manager and of middle or first-line managers
(5)
4. What are the principal integrating mechanisms used in the organization? Do they
provide sufficient coordination among people and functions? (5)
Leadership Page 3
(25%)
1. What sources of power do the CEO of this organisation has? Does the leader have
enough power to influence his or her followers? (5)
2. What kinds of behaviors did this leader engage in? Were they appropriate for the
situation? (5)

3. From what you know, do you think this leader is a task-oriented leader or a
relationship oriented leader? How favorable is this leader’s situation for leading? (10)
4. What steps this leader takes to motivate his or her followers? (5)
Control Page 4
(25%)
1. At what levels does control take place in this organization? (5)
2. Which output performance standards (such as financial measures and organizational
goals) do managers use most often to evaluate performance at each level? (10)
3. How formalized is the organization? Do employees receive a book of rules to teach
them how to perform their jobs? (5)
4. What kind of culture does the organization have? What are the values and norms?
What effect does the organizational culture have on the way employees behave or
treat customers? (5)
Conclusion ...........................................................................................................Page 5
References.............................................................................................................Page 6

Planning
1. Organization that I choose to research is Puma. The main industry of Puma is as a sportswear
manufacturer. Puma is the third largest sportswear manufacturer in the world. Puma as a
sportswear manufacturer, of course it will have lots of competitors. Among all these
competitors, Nike can be known as the most famous one because nowadays almost everyone
knows about this brand. Nike can be said is a nightmare to all the footwear companies all
around the world. Others than Nike, Adidas is also a well-known brand to consumers. Adidas
has a large market base which in about 160 countries all around the world and it is also a
goods manufacturer in the world.
2. Puma overall strategy for competitive advantage emphasizes making the company and its
products different from competitors. Puma's general strategy is differentiation, which is
widely used in business operations in the global market. This general strategy creates a
competitive advantage by developing the uniqueness of the business and its products. For
example, through innovation in sports shoe design makes it more unique in the footwear
market. Reason that Puma will choose this kind of business level strategy is because through
differentiation, the resulting competitive advantage enables multinational companies to
successfully reach and satisfy their target customers despite competing with competitors. For
examples, Nike always like to produce footwear that have crossover with other branded
product like Supreme to attract consumer’s gaze. Puma change the ways they attract
consumers by always having new design so it would be same way like Nike. The success of
this general competitive advantage strategy depends in part on its fit with Puma's intensive
growth strategy.
3. Puma adopts a unique diversification strategy to expand the company's focus and make it a
unique company. More importantly, Puma manages to charge customers less prices, which
can be sustained and is successful in the long run. For examples, the lower prices of Puma
product can more easily attract consumers eyes because not everyone have the ability to
purchase Nike or Adidas product that have higher prices than Puma.
4. There have no any major changes in Puma strategy recently. Puma’s CEO Bjorn Gulden has
been CEO of Puma since July 2013 and the way of Puma currently operate is suitable for
their situation so they have no changes needed.

Structure
1. The organizational structure of Puma strengthens the management and control of the entire
business process. This kind of company structure defines the organizational design and shows it
in the company's organizational chart. It is related to the structure system or structure of the
processes and resources in the sporting goods business. Puma has an organizational structure.
This type of structure, also known as the functional structure type, involves a hierarchical
structure, in which the headquarters of the organization is at the top level, and other
organizational components receive and execute the strategic decisions of the top management
related to the operation of the sporting goods business. Hierarchy of functional group of Puma’s
organizational structure involves grouping employees and business processes based on
similarities in human resource expertise, operational activities, or material resource utilization.
The main advantage of this hierarchical nature is the specialization between support personnel
and the entire organization-wide economies of scale support through each functional group in the
sporting goods business. Office of the CEO, Finance, Sourcing are among the main functional
groups in Puma’s hierarchical corporate structure. Besides than this organization structure,
Puma's corporate structure has product-based departments, which are grouped according to the
types of products the company owns. This feature of the organizational structure enables
companies to thrive by supporting competitive advantages based on factors such as the
uniqueness and quality of sports shoes. Footwear, Apparel, Accessories product-based
department exists in Puma's organizational structure.
2. There are total 3 levels in Puma’s hierarchy structure which on the top is their CEO, Bjorn
Gulden. The middle level management have their chief operating officer, Lars Sorensen, creative
and ambassador, Rihanna Fenty and director corporate communication which is Ulf Santier. At
their lower management board, Michael Board is their trading and service manager and for
partnership marketing manager they have Kristina Fields. Lastly the head of corporate
communications is Kerstin Neuber.
3. The concept of "span of control", also known as management ratio, refers to the number of
subordinates directly controlled by the superior. It is important to understand that the span of
control refers only to direct reporting, not to the entire company hierarchy. Even if the CEO can
technically control hundreds of employees, his span of control will only include department heads
or functional managers who report directly to the CEO. For example, middle managers should
report to the CEO before doing any decision because only CEO have the power to control the
direction of operation of the organization.
4.

Leadership
1. The chief executive officer (CEO) is generally considered to be the most powerful member of the
organization. Attributions regarding the potential impact of a strong CEO on a company’s financial
performance are common in academic literature and mass media. The usual assumption is that a
strong CEO will affect the company's performance. In 2013, Puma's sales stagnated and profits fell.
He is the third CEO in two years. Mr. Gulden recalled that shoes with the big cat logo are usually sold
at high prices. "As a brand, Puma has almost disappeared." For six years, Mr. Gulden described one
of his biggest challenges as "avoiding excessive growth." In the past six years, annual sales have
almost doubled and operating profits have increased sevenfold. This shows that how the importance a
CEO in the growing of company.
2. Leader of Puma is good in making decision. Anyone can make a decision. However, it takes an
outstanding leader to make difficult decisions with authority and confidence. Success here comes
from balancing emotions and rationality and absorbing the opinions of others to ensure that progress
is well-informed, but authoritative. Even if the decision may be unpopular, a leader who honestly
communicates the basis for the decision is more likely to achieve long-term success. In July 2013,
when Gulden took charge of Puma, he was obsessed with the brand slogan "Always Faster", which
embodied the entire business strategy. “Puma is about fast products, fast athletes, fast design and fast
decision-making,” Gulden told the market when introducing its turnover strategy. After six years of
normal work, Puma is expected to double its sales to approximately US$6 billion in 2019 and double
its operating profit margin. That’s how important a good decision maker to a company.
3. I think the CEO of Puma; Bjorn Gulden is a relationship oriented leader. Task oriented leader can
complete tasks and goals on time and ensure that employees can do the same. But in doing so, they
may linger and micro-manage to ensure that employees are on the right track. Based on a research,
Bjorn Gulden and the PUMA leadership team are scored a B by 10 employees placing it in the Top
35% of companies sized 5,001-10,000 Employees in the US. The Leadership score includes details
about how employees evaluate their executive team, CEO and manager. Men have higher ratings for
their leadership team compared to Women. the Sales department and Caucasian employees have the
most favorable ratings for their leadership team compared to Hispanic or Latino employees.
4. Getting people forward is not easy. A work team usually has people with varying degrees of self-
motivation. However, in some way, the leader must move everyone in roughly the same direction and
at a similar speed. Bjorn Gulden motivated their team by instill them hope not fear. People who are
afraid will try their best to avoid whipping. They wake up from stress and unhappiness every day.
Bjorn Gulden use more carrots than carrots and encourage people to step out of their comfort zone for
greater and better opportunities. If the standard is vague, it is difficult for someone to improve.
Vagueness can frustrate employees and make them wonder why they should be disturbed. Bjorn
Gulden have clear understanding, so employees can easily progress and succeed.
5.

Control
1. In Puma, control take place in the top of the hierarchy structure. Bjorn Gulden the CEO will
do all the important decision of the company. This can help the corporate headquarters more
easily make strategic management decisions to achieve Puma's corporate vision and mission
statement. It can also establish clear communication channels. The line that establishes the
relationship between the manager and the subordinate also provides the direction of
communication. This method gives the department a clear spokesperson: the manager.
Subordinates know who to report to and where to get information and instructions. This helps
to unify the department, which leads to coordination among its members.
2. Company-level management is most interested in financial indicators such as profitability,
liquidity, leverage, and activity rates. They measure this by evaluating the efficiency and
effectiveness of the organization. The department manager then creates organizational goals
so that department managers can set obtainable goals for their functional managers. Then, the
functional manager sets achievable goals for the employees. The process starts with setting
work goals and standards, reviewing employee performance, and enhancing the learning
skills of each employee. How do individuals work and how can they improve performance
become the main question that management need to answer.
3. When reviewing the work of employees, performance standards are your point of reference.
These standards are critical because they analyze all aspects of performance. Let us look at
how to correctly determine the performance standards and the factors that should be
considered when determining the performance standards. Puma’s organizational culture is
one aspect of the company’s efforts to achieve leadership in the sporting goods industry. The
company’s corporate culture affects the organizational development of human resources,
including factors such as philosophy, core values, motivation and traditions, which determine
the effectiveness of the workplace in promoting the competitiveness of sports shoes, clothing
and accessories in the market. Therefore, Puma's organizational culture is tied to the
competitive advantage that supports business growth and human resource development. For
example, the company's administrative department encourages employees to develop work
performance through the company's culture, so that the sporting goods business can achieve
its strategic goals. This makes Puma's organizational culture an important part of strategic
management and strategic planning for the development and improvement of multinational
business.
4. According to the company's official documents, Puma has an always fast organizational
culture. The cultural focus is the corporate goal of leadership in the sports shoes, apparel and
accessories industries. The organizational culture is related to Puma's company mission and
vision statement, emphasizing the mantra of "always faster". The company's human resource
management focuses on corporate culture and the state of the sporting goods market, and
focuses on the development of leadership for this business purpose. Learning and growth,
Diversity and inclusion, Wellbeing are the main characteristics of Puma's corporate
culture. Puma's corporate culture gives priority to the learning and growth of

employees. The strategic goal associated with this cultural feature is to continuously
improve the company's human resources to support and enhance its competitive
advantage with companies such as Nike and Adidas. The well-being of employees
has been integrated into Puma's corporate culture. For example, the company has
formulated formal and informal policies and plans to address all aspects of workers’
lives, including financial and social needs within and outside the sporting goods
industry. The social aspects of organizational culture support Puma's corporate social
responsibility strategy and stakeholder management.
In short, after completing the research of Puma Company, we have learned a lot of theories
about leadership. That is the early leadership theory, democratic style, alliance contingency
model, situational leadership theory and path goal theory. From these theories, we will learn
how to be effective leaders in organizations. In addition, we also use all the theories studied
to learn how to lead all employees and manage the entire organization well. Puma Company
has now dominated leadership theory well in its organization. Puma applies many types of
leadership theories in its organization. Bjorn Gulden lead employees in a good environment
and respect each other. Employees may be doing their jobs and always follow the instructions
of the leader. In this way, the organization's operating system will become more complete and
smooth.
1.

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