SBM4203 Case Study: Effective Management of Internal Issues at XYZ Plc

This case study analyzes the internal management issues faced by XYZ Plc, a wooden toy manufacturing company. The organization experienced a decline in profit due to unethical practices in the design department, reluctance from the manufacturing department to increase production, and concerns regarding the potential impact of offshore manufacturing on employee relations. The analysis reveals a lack of ethical conduct, ineffective reward policies, and anxieties about job security among employees. The proposed intervention program includes implementing a code of conduct, improving reward policies, and fostering open communication to address these challenges and facilitate the achievement of strategic goals, such as the Blue Ocean deal. This document is available on Desklib, a platform offering study tools and solved assignments for students.

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

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The modern business world is seen to experience notable amount of competition in
each of the industries. The business organizations are observed to face notable amount of
threats in terms of the competition which has the potential to affect their survival and growth
in the industry in a significant manner1. Adding to this, the entry of the new organizations
into the market is seen to populate the business industry in a significant manner which as a
result reduces the monopoly in the market. Under such situation, the organizations are
observed to employ different strategies such as the low pricing or the improvement in the
quality to cope up with the market competition2. In managing the changes, the organizations
are observed to face notable amount of barriers from inside and outside of the organization.
The paper is focused in the elaboration of the procedure for the effective management of the
internal issues that a chosen company in the form of XYZ Plc. faces while managing the
detrimental impact of such intense market competition. The paper describes the problem that
the chosen organization is facing and adding to that, it also provides evidences in the form of
an interview of an employee of the chosen organization along with a customer of the
organization.
Context and Introduction of the Organization:
I worked in a company named as XYZ Plc. for the last 4 years. The company operates
in the wooden toy manufacturing industry for the last 10 years. The company is renowned for
improved quality of the products and the capability of achieving the preferences of the
customers in their design which seems to be key advantage for the chosen organization in
terms of increasing the customer satisfaction. With the excellent quality of the products and
the capability of satisfying the customers with the design, the company is able to increase
1 Fleisher, C.S. and Bensoussan, B.E. Business and competitive analysis: effective application of new and
classic methods. 2015. FT Press.
2 Casadesus‐Masanell, R. and Zhu, F. Business model innovation and competitive imitation: The case of
sponsor‐based business models. 2013. Strategic management journal, 34(4), pp.464-482.

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their margin of profit in a significant manner over the years. The improved generation of the
profit for the chosen organization with the effective formation of the base for achieving
higher growth is seen to possible due to the excellence in the leadership of the Executive
Chairman of the organization, Tim Bracken.
The organization is seen to serve the customers of United States and is having the idea
of expanding their business to other countries for the effective achievement of the increased
revenue. Adding to this, the organization experiences the expertise of 3500 number of the
employees in the manufacturing of the quality products. In addition to this, the chosen
organization has three different plants for the manufacturing of the products that they offer to
the customers. Three of the plants of the organizations are observed to be situated in the
Minnesota region. The organization is seen to have a hierarchical structure with a number of
divisions for the effective business operations with a precise focus on the increment of the
profit. The organization is currently led by the senior vice president of the operations, Pat
Bracken who is the son of the Executive Chairman. The Chief Executive Officer of the
organization, Peter Williamson is also a key figure for the effective management of the
business operations in the chosen organization. Apart from them, the head of the various
departments such as the sales, manufacturing, marketing, human resource and the design are
observed to be the key fugues of the chosen company.
Problem Description:
The chosen organization is renowned for providing desired quality in their designs
and for the achievement of the preferences of the customers in their design. This was a
significantly crucial factor for the organization in increasing the profit of it. However, during
the end of the November of 2018, the chosen organization is seen to suffer major blow in the
generation of profit. The sales of the chosen company was observed to have a major decline

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and the financial condition of the organization was going through a rough patch. The chief
executive officer of the organization was notably worried with the case as the company was
unable to strive towards the desired growth in the expected fashion.
Hence this forced her to conduct a meeting for the effective evaluation of all the
aspects of the organization’s business conduction so that she and the senior level
management of the chosen organization be able to achieve important information regarding
the factors that are affecting the business conduction and the growth of the organization.
During the meeting, she was seen to question the head of the manufacturing and the sales
department regarding various aspects that are related to the business operations of them and
with the effective assessment of the answers of the head of departments, the CEO of the
organization was able to understand the fact that the design department is involved in
unethical business conduction. This was a major reason for the significantly decreasing
quality of the products of the chosen organization. Adding to this, she was able to understand
the fact that the company somehow was not able to produce sufficient number of products in
the United States market. The absence of the sufficient number of products from the part of
the company in mentioned market was responsible for the significant reduction in the market
domination of the chosen company. Hence the customers of the company were seen to
purchase the products from the competitor organizations. The effective assessment of the
condition and the answers of the head of the manufacturing department were significant for
the CEO in getting the idea of the fact that the manufacturing department of the organization
was not ready to increase their production and they want the inclusion of the third shift.
Adding to this, the CEO of the company was observed to attain the idea of the growth that the
company will be able to accomplish with the achievement of a lucrative deal in the form of
Blue Ocean deal which has the potential to enable the company for the effective achievement
of the desired growth. However, the organization was seen to face the need of manufacturing

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the products from the mid-scale market so that the costing of the products is effectively in
alignment for the achievement of the Blue Ocean deal. However, head of the departments of
the organization were seen to be significantly reluctant in implementing the plan and at the
same time, the senior vice president of the operations of the chosen company was observed to
be hesitant regarding the implementation of the plan. Under such situation, the organization
was seen to face notable amount issues in the internal management of the operations of the
organization.
Analysis of the Problem:
The organization was seen to suffer in a significant manner due to the unethical
business conduction of the design department. The head of the mentioned departments and
some of the employees of the departments were observed to be involved in employing the
ordinary design firms for the products of the mentioned organization and that was the main
reason of the significant decline in the quality of the products of the chosen organization3.
The unethical business conduction of the employees of the mentioned department was one of
the main reason of the significant decline of the company’s sales4. Adding to this, the head of
the manufacturing department were observed to as for the inclusion of the third shift for the
increment of the production which in consideration of the CEO was unethical and an illegal
demand.
Apart from that, the various lines of the management were observed to oppose the
idea of the business expansion for the effective achievement of the mentioned deal. The main
concern of the senior vice president of the organization was observed to be impact that the
3 Han, H. and Hyun, S.S. Customer retention in the medical tourism industry: Impact of quality, satisfaction,
trust, and price reasonableness. 2015. Tourism Management, 46, pp.20-29.
4 Beeri, I., Dayan, R., Vigoda-Gadot, E. and Werner, S.B. Advancing ethics in public organizations: The impact
of an ethics program on employees’ perceptions and behaviors in a regional council. 2013. Journal of business
ethics, 112(1), pp.59-78.

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idea of offshore manufacturing is expected to have on the employees of the organization. As
the contract between the employee union and the company was approaching its expiry, the
senior vice president was observed to be notably concerned with the impact of the idea of the
offshore manufacturing on the possible intention of the employees union in continuing the
relationship with the organization. Hence senior vice president of the organization was
observed to face a dilemma in terms of deciding whether to go for the business expansion
with the offshore manufacturing or not. Under such situation, the management of the
organization headed by the senior vice president was seen to have notable amount of concern
regarding the customers of the base country as well.
With the effective analysis of the case, it is pretty evident that the employees of the
design department along with the head of the department were involved in unethical business
conduction and that certainly reflects the absence of the incorporation of the ethics into the
operations of the employees5. Adding to this, the unethical business conduction from the part
of the employees had the potential to decrease reputation of the chosen company. The
decrement in the quality of the design was seen to be a major concern from the part of the
organization as it was renowned in the national market for providing optimum quality
products. At the same time, the organization was seen to be unable in providing
effective pay structure for the employees of the organization which forced them to have the
demand of the third shift. The response from the part of the head of the manufacturing
department of the organization was evaluated to be a reflection of the ineffective rewarding
policy of the chosen organization and the incapability of the organization’s strategy in
5 Akhavan, P., Ramezan, M. and Yazdi Moghaddam, J. Examining the role of ethics in knowledge management
process: Case study: An industrial organization. 2013. Journal of Knowledge-Based Innovation in China, 5(2),
pp.129-145.

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motivating the employees of the manufacturing department to increase the manufacturing of
the chosen organization6.
Adding to this, the senior management of the organization was seen to be concerned
regarding the impact of the idea of the offshore manufacturing on the employees of the
chosen organization. The management of the organization thought that the employees will
have notable amount of job insecurity with the news of the offshore manufacturing and that
seems to delay the preparation of the organization in terms of the achievement of the
lucrative Blue Ocean deal7.
Intervention Program:
In order to make sure that the organization overcomes the above mentioned issues, the
management of the organization is in need to implement an effective consultation with the
departments conducting the repetitive faults. The CEO of the organization is in need to make
sure that she consults with the employees of the design department regarding their unethical
business conduction. Adding to this, the CEO of the organization needs to make sure that
they be able to develop a code of conduct for the employees of the organization and
effectively aligns it to the operations of the employees8. This will have the possibility to
minimize the unethical business conduction of the employees inside the organization. Adding
to this, the concern of the manufacturing department of the organization can be met with the
production of the effective rewarding policy from the part of the CEO of the organization
including the intrinsic and extrinsic rewards9. The increment in the effectiveness of the
6 Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. Human resource management: Gaining a
competitive advantage. 2017. New York, NY: McGraw-Hill Education.
7 Njanja, L.W., Maina, R.N., Kibet, L.K. and Njagi, K. Effect of reward on employee performance: A case of
Kenya Power and Lighting Company Ltd., Nakuru, Kenya. 2013.
8 Lee, Y.K., Choi, J., Moon, B.Y. and Babin, B.J. Codes of ethics, corporate philanthropy, and employee
responses. 2014. International Journal of Hospitality Management, 39, pp.97-106.
9 Muogbo, U.S. The impact of employee motivation on organisational performance (a study of some selected
firms in anambra state nigeria). 2013. The international journal of engineering and science, 2(7), pp.70-80.

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rewarding policy will be significant for the employees of the organization as that will have
the potential to eliminate their demand of the third shift and motivate them towards the
increment of the manufacturing10.
With the effective consultation regarding the fact that the employees of the Minnesota
plants will not face any sort of job cuts for the implementation of the offshore manufacturing,
the CEO of the organization has the chance to reduce the concerns of the senior vice
president of the operations of the organization. Hence this has the potential to reduce the
complexity of that is associated with the decision making process of the senior level
management of the organization in the effective achievement of the Blue Ocean Deal.
10 Armstrong, M. and Taylor, S. Armstrong's handbook of human resource management practice. 2014. Kogan
Page Publishers.

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References:
Akhavan, P., Ramezan, M. and Yazdi Moghaddam, J. Examining the role of ethics in
knowledge management process: Case study: An industrial organization. 2013. Journal of
Knowledge-Based Innovation in China, 5(2), pp.129-145.
Armstrong, M. and Taylor, S. Armstrong's handbook of human resource management
practice. 2014. Kogan Page Publishers.
Beeri, I., Dayan, R., Vigoda-Gadot, E. and Werner, S.B. Advancing ethics in public
organizations: The impact of an ethics program on employees’ perceptions and behaviors in a
regional council. 2013. Journal of business ethics, 112(1), pp.59-78.
Casadesus‐Masanell, R. and Zhu, F. Business model innovation and competitive imitation:
The case of sponsor‐based business models. 2013. Strategic management journal, 34(4),
pp.464-482.
Fleisher, C.S. and Bensoussan, B.E. Business and competitive analysis: effective application
of new and classic methods. 2015. FT Press.
Han, H. and Hyun, S.S. Customer retention in the medical tourism industry: Impact of
quality, satisfaction, trust, and price reasonableness. 2015. Tourism Management, 46, pp.20-
29.
Lee, Y.K., Choi, J., Moon, B.Y. and Babin, B.J. Codes of ethics, corporate philanthropy, and
employee responses. 2014. International Journal of Hospitality Management, 39, pp.97-106.
Muogbo, U.S. The impact of employee motivation on organisational performance (a study of
some selected firms in anambra state nigeria). 2013. The international journal of engineering
and science, 2(7), pp.70-80.

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Njanja, L.W., Maina, R.N., Kibet, L.K. and Njagi, K. Effect of reward on employee
performance: A case of Kenya Power and Lighting Company Ltd., Nakuru, Kenya. 2013.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. Human resource management:
Gaining a competitive advantage. 2017. New York, NY: McGraw-Hill Education.

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Appendix:
Interview:
Two of the individuals were interviewed as evidences for the case. The first one is a customer
tagged as Customer 1 and the other one is an employee of the manufacturing department
named as Employee 1.
Customer 1:
Do you prefer buying from the XYZ Plc.?
Yes, this was one of my favourite organization for purchasing toys for my daughters
and the sons of my brother.
Did you buy anything in the last six months from the organization?
Yes, I bought two times but that is considerably less as per buying behaviour.
What are factors that are affecting your purchasing intention in recent times?
Well, in last few months, the organization is seen to concentrate less on the quality in
the design of the products. Along with that, the diversification of the products was limited as
well.
Is it affecting your perception regarding the organization?
Obviously, quality maters the most for me. I am okay to buy at higher rates if the
quality is as per my desire.
Will you recommend the organization to any of your relatives or friends?
Currently, I want them to sort their internal issues so that they can provide me the
desired quality products and maintain their reputation of being a quality provider.

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Employee 1:
How long you are serving the organization?
Well, I belong to the manufacturing department and I am working here for the last 1
years.
Is there any issue that is affecting the operations of your colleagues?
Yeah, all of us in the manufacturing department feel that there should be a third shift
for the improvement of our operations and at the same time, for the desired increment in the
efficiency of the operations.
Do you consider the business expansion from the part of the organization as a threat for your
employment?
To be honest, yes. Till that we have no idea regarding the future of the Minnesota
plants and that is a genuine concern for our future which is increased with the plan of the
offshore manufacturing.
What can be done to properly restructure the operations?
The effective communication regarding the plan of the organization to the employees
of the organization and the creation of an efficient rewarding policy which will be able to
motivate the employees is much needed to recover the normalcy in the organization.