We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Kranworth Chair Corporation Essay Sample

essay
The whole doc is available only for registered users OPEN DOC

Get Full Essay

Get access to this section to get all help you need with your essay and educational issues.

Get Access

Kranworth Chair Corporation Essay Sample

Kranworth Chair Corporation produced a range of high-quality, trendy yet portable folding chairs. The company was protected by patents and had been enjoying sales growth. However, the company started experiencing changes in the environment, such as expiration of patents, having more competitors and even worldwide recession in the 2000s, resulting to a drop in profits.

Kevin Wentworth, CEO and co-founder of KCC, decided to change their strategy from increasing quantity of sales to improving quality of sales. In order to do, he wanted to develop stronger customer focus. He implemented the strategy through changing the organization structure from centralization to divisionalization. From this new structure, he expected to achieve a better understanding of customers, reduction in SKUs as well as enhanced efficiency and asset utilization. Unfortunately, KCC’s early experience with the new structure created additional problems.

Decentralizing the structure was supposed to empower division managers and allow division managers sufficient autonomy in decision-making essential to the achievement of overall goal. However, Kevin seems to disagree with most of the decisions the managers have made. For instances, Customs Division manager, Ed, wanted to reduce costs by purchasing a new machine however Kevin thought that the real issue with his division was with the turnaround time. Another example was when Retail Division manager, Joe, wanted to aggressively advertise retail however the issue lies in the product placement in retail chains.

There were also problems in relationship between functional and divisional structure. Joe was complaining about the late deliveries, missed sales and product returns that he believed were caused by vendor problems under the Supply Chain and Quality. The solution to this problem is to have more communication with the employees of the company. Kevin should convey his overall goal to the company and explain the sudden shift of focus from quantity to quality of sales. The company is at its early stage in adopting an entirely new organizational structure thus, more leadership effort and focus are required from Kevin.

Another issue lies in the measure and incentive system established by Robert, Vice-President of Finance. He developed a measure he referred to as controllable returns, where operating income before tax is divided by controllable assets. The assets deemed controllable by the divisions include are receivables, inventories and assigned cost of facilities they used. Although we believe that his performance-based bonus plan system is reasonable, we believe that further improvements can be added for certain areas. The first issue is with their claim that uncontrollable costs will be incorporated into targeted performance. Robert did not seem to specify how he plans to do so thus, division managers are feeling insecure with their performance measures with additional pressure of not having good relationship with functional areas critical to their performance such as that between Retail Division and Supply Chain and Quality Control.

According to Robert, divisions control 85% of the P/L and believed it to be significant enough. However, we believe that although they do have significant control, the divisions do not have control over the functions that are crucial to their performance. As Retail Division is responsible with high sales volume, it is essential to have good Supply Chain and Quality Control. Custom Division produces customized and more innovative products, which will need R&D resources. With the new organization structure, these key functions are not under their control. Seeing as Robert do not have first-hand experience with the workings of the divisions and their markets, he should seek suggestions from the division managers before setting performance measures. He should also put them at ease by conveying how he plans to build the uncontrollable costs with the performance targets.

We can write a custom essay

According to Your Specific Requirements

Order an essay

You May Also Find These Documents Helpful

Australian food and liquor business Woolworths company

S1. Pioneer and among the oldest companies to introduce the modern retail trade model Woolworths limited was founded in September 1924, which was the very first store based company in Australia during that time. As a result, it gains customer’s interest as there was variety of groceries, magazines, health product and so on just in one place. Soon, Woolworths company had a little interest in shareholders...

Coca-Cola Company

Coca-Cola Company is an American multinational beverage corporation and manufacturer, retailer and marketer of nonalcoholic beverage concentrates and syrups. Coca- Cola Company has been found 131 years ago in May 8,1886 in Atlanta, Georgia, U. S. by Asa Griggs Cadler and John Pemberton. John Stith Pemberton is pharmacist who invented formula for the most popular product Coca-Cola in 1886 in Columbus, Georgia. The formula is...

The American landscape and lifestyle

“Baseball caps and hats are as much a part of the American landscape and lifestyle as just about any apparel accessory.” (Threadlogic Source) If the United States had a national hat, it surely would be the baseball hat. The popularity of logoed embroidered headwear is evident anytime you are out in public, and especially at a sporting event, men, women, and children show support for...

Roles and responsibilities of data users

In order to successfully gather data from the users, conducting an interview must be a good idea. Hence that may insufficient as users may not able to describe everything by themselves as the ideal meaning may not portrays only by words. So that it is better if the user can be observed while they use an interface they currently use which may portrays much information....

Codman & Shurtleff Private Company Information

Codman & Shurtleff, Inc. , was established in 1838 in Boston by Thomas Codman to design and fashion surgical instruments. In 1964, Codman & Shurtleff was acquired by Johnson & Johnson inc. Codman & Shurtleff operates from three manufacturing locations and a distribution facility in Massachusetts. They employ about 800 people in the United States. Codman & Shurtleff mission statement was product oriented while that...

Get Access To The Full Essay
icon
300+
Materials Daily
icon
100,000+ Subjects
2000+ Topics
icon
Free Plagiarism
Checker
icon
All Materials
are Cataloged Well

Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.

By clicking "SEND", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
Sorry, but only registered users have full access

How about getting this access
immediately?

Become a member

Your Answer Is Very Helpful For Us
Thank You A Lot!

logo

Emma Taylor

online

Hi there!
Would you like to get such a paper?
How about getting a customized one?

Couldn't Find What You Looking For?

Get access to our huge knowledge base which is continuously updated

Next Update Will Be About:
14 : 59 : 59
Become a Member