I. Major Problem (CLAIM) Identified: The problem is lack of an effective management team
A. Justifications for problem statement (FACTS with WARRANTS)
1. why is this the problem? what in the case suggests that this is the problem? 2. Questionable turnaround strategy.
B. Justifications for problem statement
1. why is this the problem? what in the case suggests that this is the problem? 2. Several top management staff had left the company within a short period.
II. Alternatives (possible solutions to the problem identified)
A. Alternative 1: Reduce hierarchy through a flat management structure.
1. Advantages to alternative 1
a. advantage a: Could give employees more responsibility.
b. advantage b: May help foster more open communication.
2. Disadvantages to alternative 1
a. disadvantage a: May prolong decision-making timeframe by required involvement.
b. disadvantage b: Difficult to control if the organizations becomes international.
B. Alternative 2: Concentrate on improving their online retail experience and maintaining what they have without opening any more stores.
1. Advantages to alternative 2
a. advantage a: Customer experience in the existing stores could be improved.
b. advantage b: A competitive advantage from a more focused strategy.
2. Disadvantages to alternative 2
a. disadvantage a: May be left behind by rivals in market share and lose profits.
b. disadvantage b: Decreased morale among employees for fear of losing jobs.
C. Alternative 3: Reduce or cut off donations to political groups or individuals.
1. Advantages to alternative 3
a. advantage a: May help reduce the negative attitude of some political supporters.
b. advantage b: Less liability from future events associated with the donation.
2. Disadvantages to alternative 3
a. disadvantage a: The company may not secure its economic interests.
b. disadvantage b: May cause loss of customers associated with the beneficiaries.
III. Recommendation (Alternative Chosen) (CLAIM): Target should reduce management hierarchy by adopting a flat management structure.
A. Major Justifications (FACTS with WARRANTS)
1. Justify your chosen alternative: A flat organizational structure will allow employees to get involved in various decisions and activities.
2. Use as many statements as necessary in your justification
3. Part of your justification must be a comparison of your chosen alternative with alternatives not chosen
- The most crucial aspect of Target’s sustainability is cutting unnecessary costs and expenditure, so a good alternative provides more savings on cost.
- If the company decides to concentrate on improving its online presence, it must incur huge expenses.
- Without creating more stores, the rivals, many of which are startups, could outcompete the company in the local market and eventually be unable to get sales volume as before.
- The main issues within Target result from managerial decisions that were either ineffective or at the wrong time.
- Reducing donations to political groups or individuals could only solve a few of these issues and not the inherent causes that may sprout in the future.
- Therefore, a flatter organizational structure could solve more issues than other alternatives. Target has a hierarchical structure, in which decision-making is a responsibility of the top management only. It increases the risk of making decisions that do not resonate with the public, employees, or customers.
- With employees involved, decisions will be more effective.
- Employees will feel motivated, communication will improve, and management costs will decrease.
B. Minor Justifications
1. what in the case suggests that this recommendation is the best alternative?
2. A frequent change of top leaders indicate a lack of understanding among the leaders.
A. List of issues that are important for the implementation of your chosen alternative (i.e., what will the company have to do to make your recommendation happen?)
1. Don’t force it – it might be the solution, but leaders need to survey employees and see how they feel about the change.
2. Set up lines of communication – there should be an open-door policy to create room for collaboration.
B. List other problems that your recommendation does not remedy
1. It does not guarantee the brand image will improve.
2. The company may still have legal and ethical issues of layoffs caused by the change.
Case 2: Making Target the Target: Boycotts and Corporate Political Activity
Problem Statement: The main problem is the lack of an effective management team because of the frequent change of top leaders within a short period and lack of coordination in making decisions.
Analysis: Before 2016, Target was the second-largest discount chain in the United States. The retail giant had received much praise from individuals and groups regarding its support for the LGBT community. It carried a reputation in its public activities that pictured a company willing to welcome every individual and a socially progressive company. Target found itself surrounded by major controversies after its donation of $150,000 to MN forward. The intention was to fund political campaigns for Democrats and Republicans as a form of lobbying to support business-friendly policies. During the time, the Republican candidate for governor and who received the largest donation, was Tom Emmer.
Tom Emmer’s comments against same-sex marriages and LGBT parental rights resulted in liberal groups attacking Target for supporting its large donation. It also sparked other movements and public concern over the influence of money and corporations in politics. Even after its leaders came forward to deny allegations that there were political agenda, it was clear that the company had influenced the campaigns with its donations. Even after the boycotts that followed, the top leadership failed to steer the company into stability. The company lacked an effective management team with proper coordination. It is evident in several instances, for example, when the statement on welcoming transgender customers and employees got published without Cornell’s knowledge. Again, Cornell, the CEO, was not notified of the request to post the company’s memo by the Chief Risk Officer.
Alternative 1: The first alternative is to reduce management hierarchy by implementing a flatter organizational structure.
Pros (or Benefits): The benefits of this alternative are:
- Employees at all levels within the organization will participate in the decision-making process hence making effective decisions.
- With fewer layers or people for the message to travel across, communication accuracy increases, and fewer approval requests means this speed can allow new products and services to be implemented faster and with less red tape.
Cons (or Costs/Challenges): The challenges of this alternative are:
- The company will need to restructure its management, and this may end up causing several layoffs, something that can further damage its reputation that is already at stake.
- When the company expands once again, it may be hard to maintain using a flat organizational structure.
Alternative 2: The second alternative is to reduce donations to political groups and individuals and divert such funds to corporate social responsibility.
Pros (or Benefits): The benefits of this alternative are:
- As already evident from the past, Target’s boycott was political because it involved itself in politics. Without such donations, it would be easier for the company to focus on developing and improving itself.
- It will reduce the liability from actions of supported individuals, hence possibly improving its brand image to the public as a politically neutral company.
Cons (or Challenges/Costs): The challenges of this alternative are:
- Withdrawing the support could decrease the chances of the company influencing economic policies through the leaders once elected.
- It would lose the customers that would otherwise purchase from its stores because of getting associated with their favorite politicians.
Recommendation: The best solution to the problem is the first alternative – implementing a flatter organizational structure – because it will foster teamwork between employees and management. Rather than having the CEO and a few top managers get tasked with improving the company, everyone will have a sense of ownership and be recognized easily for whatever they accomplish individually and as a group.
Implementation: Target will execute the above plan as follows:
Month 1: Preparation through seminars and training programs: There should be a clear picture of what success should look like, who has to do their jobs differently and how, and what it will take to achieve success.
Month 2: Manage change: This is the time for the company to prepare, equip and support people. Once a few positions and roles get changed, performance should get tracked and possible adjustments identified.
Month 3: Sustain outcomes: The change management team should review performance to determine the achievements and activate sustainment to prepare for any change risks. During this period, the corporation should not be opening new stores so that operating costs can go down and allow the management change to proceed with few disruptions.