Question

the Cushy Armchair case

CUSHY AIRMCHAIR

Use the alignment framework and the analytical questions shown in the guided analysis specifically to analyze the situation facing Alison and to structure your analysis. What are the gaps in the current structure versus the new structure Alison is trying to implement?

What do you recommend she do to get the change back on track?

Cushy Armchair had a decentralized model that used to be defended by McKinsey to corporations all over the world in 1960s and 1970s, this model defends the idea that more decision making closer to the customer to server that customer better and centralization was considered bad because it inevitable leads to slow ins responsive (Gerstner).

However, the dynamic of the world has changed due to the development of new technologies; companies are required to change their strategy in order to keep their competitive advantage for sustainable grow in the market. The market analysis of chairs sectors recommend adjustment on the Cushy’ s alignment with new environment, as its competitors were adopting global (centralized) model enabling them competitive advantage on their potential cost and shortening design cycles.  

Due to that, Cushy has a challenge to reduce cost, speed product design and improve technology transfer, then it was not a question of centralization versus decentralization; great institutions must balance common shared activities with highly localized, unique activities (Gerstner).

In this scenario, Sampson identified opportunities thought the centralization of procurement, design approval and advertising campaign in New York, of a company based in Hong Kong with fully autonomous business group in 17 countries  (Northeastern University, 2017).

The analysis of this case identifies three main tasks to promote Cushy’s globalization. Alison requested by e-mail that purchasing all chair glide mechanisms by WorldFurniture’s procurement in NY, advertising campaign to be coordinate by NY and approval by NY for any substantial design and feature changes.

As per Organizational Alignment Model (OAM), the task and coordination are the foundation for building the proper structure for execution (Lane, Maznevski, DiStefano and Dietz, 2014). In an orgthanization, people and jobs are organized using various division of labor and structures to achieve coordination, efficiency and effectiveness, and best performance requires alignment between the people and jobs that they do created by the people selected and the system used to link them to their jobs (Northeastern University, 2017).

To make sure that the tasks of the organization are coordinated and carried out in the best possible way companies also use budget and control systems (Northeastern University, 2017). Evaluation, reward, development, budgets and control system are also used to motivate people and have underlying cultural assumption as well as assumptions about tasks demands (Northeastern University, 2017).

Manager must anticipate the possible toxis side effects of organizational change and shelter their global teams as much as possible, then  (Wilson and Doz, 2012)

Performance comes from aligning the organization internally and externally (Northeastern University, 2017). Then is necessary to align task and work systems with people including levels of responsibility, budget and performance appraisals and align right task and systems to the right people, then all structure to task and work system and people through selection and development of people, evaluation system, reward system, budget and control, information flow and then build the organizational culture. The model includes the alignment of strategy and environment, that requires to consider the industry with consumer and competitors (Northeastern University, 2017).

In order to complete those tasks, there are sequential interdependencies to be analyses that implicate, higher up on the complexity scale (Lane, Maznevski, DiStefano and Dietz, 2014).

For alignment of the first task related with changing all orders to WorldFurniture, requires revision of World Furniture’s capacity to attempt additional demand from Cushy in others countries. Other implication is related with existence of contracts with local suppliers that may not be interrupt abruptly, or they can have importing material on the way that cannot be suspended. Also, some countries can have material stocks that must be reduced before submit the new order in this new process. These task also requires changes in the logistics and distribution, and adequacy of all internal procedures and controls.

The alignment of this task with system may implicate in technology development that require time for adjustment.

The task to centralize the advertising campaign to be coordinate by NY includes revision of local contracts and current publicity and readjust of budget that in most of companies it is done just twice a year.

The advertising must be adjusted accordingly each country culture, however, leading global teams when members come from different countries and functional background that are working in different location, communication can rapidly deteriorate, misunderstanding can ensue, and cooperation can degenerate into distrust (Neely, 2015). There is social distance and different level of emotional connection that affects the arrival to a common understanding (Neely, 2015).

For the alignment with People for all tasks can include the language barrier, redefinition of responsibilities, and reallocation of resources and training. Also, the people alignment may include changes in the performance appraisal and rewards that can facilitate the process to drive people behavior and achievements (Northeastern University, 2017).

The success of one product can be attributed to the enormous advantage of understanding what problems the customer needs to solve (Power, 2016). Then there would be challenge to NY to understand different customer needs from each country for adjustment on the design.

Leaders who are thinking about creating true integration in their institutions must change the measurement and reward system do reinforce this new direction (Gerstner)

CEO Leadreship is mandatory before substantial changes become systemic and sustainable that they real involve and not exhortations, delegation to guarantee that changes will happen (Gerstner)

As the well-known business academic Henry Mintzberg noted, “Global coverage does not mean a global mindset.” (Northeastern University, 2017)

Your task is to assume the role of Alison Sampson as President of Cushy Armchair, headquartered in Hong Kong, a newly acquired furniture subsidiary of Cabletronica. You are an experienced finance executive who has risen quickly through the ranks of Cabletronica, a large American cable network television and Internet service provider. Your decisions will have a major impact on the success of Cabletronica’s diversification strategy. Your experience includes numerous management situations (Disneyland Paris, Hazelton International, Charles Foster, Arla Foods, Leo Burnett, Delta Beverages) and briefings about other cultures (e.g. GlobeSmart); the selection of global leaders; as well as the stages and issues involved in being an expat on an international assignment. Now it is time for your own international assignment. What course of action will you choose? What are your success criteria? What barriers and obstacles do you anticipate? What options did you consider and discard?

1. What course of action will you choose?
2. What are your success criteria?
3. What barriers and obstacles do you anticipate?
4. What options did you consider and discard?

Answer 1

Firstly, i would ensure the necessary data analysis is done to uncover the hidden loop holes in the present decentralized system. This will further lead to defining the improvement projects and aligning the organizational culture towards change. This includes knowledge sharing, discussing the organization's goals and objectives and reasons for changing the organizational structure and functioning.

Then, I would focus on improving the processes involved, starting from marketing to logistics to finance. Value stream mapping will be useful for this purpose.Also, the supply chain management needs to be revamped to become more centralized in order to benefit from economies of scale. Also, the processes must be standardized leaving less or no scope for variation or defects.

Employees must be encouraged to voice their opinions and views, so that the organization can benefit from diverse ideas. Employees must also be motivated to improve their productivity through innovative thinking.

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Success depends on how well has the change project been implemented in the organization. Employee support is essential. And a measurement of improved business in comparison with the past business performance is a clear indication of success of the project.

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Major barrier to change is from employees. They were enjoying the benefits of freedom in decision making under the de-centralized structure. this all changes when the structure becomes more centralized. Thus the authority which once all had, is taken away and is given to one central individual of group. This causes huge resistance from employees who are used to working on self-terms and not in a particular standardized manner as per company's policy.

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I would consider making changes in the system, however not instantly cutting off from initial working processes. Thus, the output must remain intact. Diversity must be respected and considered while designing the new system. Also, a combination of centralized an de-centralized structure would be more suitable for a company such as mentioned above, owing to it's world-wide presence.