Mike’s Mall Mart

Mike’s Mall Mart

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The primary problem would be the structure of the organization. This is due to the fact that there are thirteen departments in total which would lead to the failure of the ability to concentrate on long term viability of the business.
Alternatives: The most important measures that can be taken are: contraction of the department structure and applying decentralization.
Facts Considered:
1. Mike took over the lease of a building and wanted to transform it into a fully functional department store that offered a variety of products.
2. There are thirteen departments in total: finance and accounting, human resource management, marketing, men’s clothes, women’s clothes, shoes, hardware and automotive, music including audio and video equipment, toys, home and garden, small and large appliances, sports equipment, and furniture..
3. Top management is spending too much time on employee development and not enough on the overall strategy of the business.
Recommendation:
As for Intermediate: Build Booths so customers can rate satisfaction on scale from 1-10, build complaint boxes for employees in staff room, take note of sales values, and implement changes to organizational structure. For the Short term: plot result, extrapolate, and gather information if negative results. For the Long term, if results maintain positive relation, the strategy has been successful.


Assumptions:
• There might be a high turnover rate in retail industry.
(The retail industry main aspect includes small stores that sell products directly to consumers. Mike took over the lease of a building and wanted to transform it into a fully functional department store that offered a variety of products.)
• Equality of expression would be the main characteristic of the organizational culture.
(Every employee is free to express his or her opinion. Moreover, every employee would be encouraged to create new innovation that could be used by Mike’s Mall Mart.)
• The workers would be value skilled.
(The managers were responsible to respond to any inaccurate information whether it was related to the store or the people working there.)
• Mike is an experienced and risk-taking entrepreneur
(He took over the lease of a building and wanted to transform it into a fully functional department store that offered a variety of products. He also believed in the importance of using new innovations.)

Primary Problem:
The primary problem would be the structure of the organization. This due to the fact that there are thirteen departments in total: finance and accounting, human resource management, marketing, men’s clothes, women’s clothes, shoes, hardware and automotive, music including audio and video equipment, toys, home and garden, small and large appliances, sports equipment, and furniture.

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This would lead to the failure of the ability to concentrate on long term viability of the business.


Satellite Problem:
• The top management would spend too much time on employee development and not enough on the overall strategy of the business.
(Because Mike Hayward believed in the importance of continuous learning, he wanted to ensure that employees would continue to develop during their time at Mike’s Mall Mart. However in order to achieve the desired goals, the organization should focus on developing the current strategy of the business rather than spending too much time on employee development.)
• There would be too many people reporting to the top management on an ongoing basis.
(Hayward formed a policy that required every employee to follow a series of one day seminars at which each manager would present his/her area of responsibility, describe how it works, what works well, the key challenges, and how it could be made to work better. This would make the top management unable to focus on their work.)
• Mike is not able to focus on particular aspect of the business.
(This would eventually bring harm to the business.)

Implications:
1. Organizational:
• The structure of the organization would be detrimental to long term viability.
(This is due to the fact that thirteen departments would lead to the failure of the ability to concentrate on long term viability of the business.)
• Spending too much time on employee development would decrease efficiency.
(Top management is spending too much time on employee development and not enough on the overall strategy of the business)
• Mike’s Mall Mart will just be an ordinary department store, without any speciality.
(Mike is not able to focus on particular aspect of the business which would bring harm to business)

2. Personnel:
• Managers, especially Mike will be overwhelmed with stress.
(Mike is not able to focus on particular aspect of the business which in turn would bring harm to the business and stress to him.)
• Mike and Roger won’t be satisfied or have the feeling of fulfillment.
()
• Employees will be discouraged due to lack of effective communication and direction
(Too many people report to them on an ongoing basis)

Alternatives:
1. Contraction of the department structure:
• Shrink the amount of departments within the organization
(Instead of thirteen departments, reduce them to three so we could increase the efficiency.)
2. Decentralization:
• Encourages all levels of organization to make decisions
(This would reduce the stress on the top management so that they can focus on their own work.)

In order to solve these problems, certain methods should be developed. First method is the contraction of the department structure. This means shrinking the amount of departments within the organization. As an example, reduce the thirteen departments to three instead. Second method is decentralization. This would encourage all levels of organization to make decision which in turn would reduce the stress on the top management so that they can focus on their own work.
Contraction of the department structure:
1. Pros:
• Less managers will be reporting to Mr. Hayward
(This would make Mike able to focus more on particular aspect of the business.)
• Reduces costs for the company
(Eliminating departments would eventually reduce costs)
• Increases the efficiency of the organization
(Increase the ability to focus on the specified departments which would increase the efficiency)
2. Cons:
• There will be a significant swell of the span of control
(By contracting the department structure, many mangers would be eliminated. As a result, the number of employees a supervisor manages would increase.)
• Might increase employees stress level and put a strain on employee-manager relations
(Contracting the department structure means laying off employees. As a result, employees would be stressed about whether it’s their turn to be laid off or not.)



Decentralization:
1. Pros:
• Allow Mr. Hayward to concentrate on the long term growth of the organization.
(By distributing the administrative functions among several local authorities, some of the burden of daily business operations will be taken off the business owner. As a result, Mr. Hayward will have more time to focus on the growth of the organization.)
• Good employee development tool
(Decentralization could empower the employees. It would allow them to make better use of the knowledge and experience they have gained and implement some of their own ideas.)
• Will result in a better customer experience and service
(Decentralization means more efficient decision making. In other words, it would allow the organization to react quickly to certain situations and thus gain the customers.)

2. Cons:
• Empowering employees can be risky. Potential mismanagement of it (empowerment) directly affects the image of the organization.
(Empowerment would give the employees a sense of importance and ability to make their own decisions. This would lead to problems within the organization which would affect its image.)
• The same risk exists with the managers but it will not affect the public image. The repercussions will all be internal.
()


Recommendation:
The best solution is to mix both alternatives, contraction of the department store and decentralization. Contraction of the department structure would allow the upper management to do their job effectively. Decentralization in turn would reduce the impact of increased span of control created by the contraction of the department structure.

Implementation:
1. Immediate
2. Short term
3. Long term

1. Immediate
• Build Booths so customers can rate satisfaction on scale from 1-10.
(Based on the rating, the organization would be able to know if any improvement is needed.)
• Build complaint boxes for employees in staff room.
(Employees would write their complaints and put them in the box. After a while, the box would be opened and the papers would be read. As a result, every employee would improve himself or herself instead of fighting with each other.)
• Take note of sales values
()
• Implement changes to organizational structure

()



2. Short term
• Plot results
(Collect the ratings and the complaints and see their result.)
• Extrapolate
(Conclude from the results whether a change is needed or not.)
• Gather information if negative results
(Try and collect information on the causes of the negative results and what can be done to improve them.)

3. Long term
• If results maintain positive relation, the strategy has been successful
(Keep track of the results, if they maintain positive relation, the strategy is successful.)

Conclusion:
• Primary problem
o Org structure and communication
• Recommendation
o Contraction of department structure
o Decentralize decision making
• Immediate, Short term, Long term




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