Subject : PDP IV (BC 017)
Case Study : Iggy’s Bread of the World
Group Member: Ili
Nona
Jimmy
Sahs
Date : 24 January 2011
Content:
1.Type of study case
2.What is the situation?
3.Questions
4.Hypothesis
5.Proof & action
6.Additional Evidence
1.Type of study case:
This case study is a problem analysis stud
y case type, because such a successful company at their beginning stage start to decrease slowly once started to reach to its peak before the management has been changed. The observation on the problem is more focused on Communications, Leadership, Organizational Culture, Finical Problem and Employee satisfaction.
2.What is the situation?
A pair so passion about bakery business who straggled at the beginning but soon after become a successful company but not after so long the company had to expand it market according to the demand so they had to develop and go through different process that thy have not experience therefore problem start to happen and the solution dos not seem to be effective and not getting the company any good. Oppose to Ivanovics concerted effort to know and communicate with all of their employees, the new management team under McRae did not effectively communicated with Iggy’s employees. Also McRae failed to communicate with Ivanovics by not seeking their opinions while hiring key new management personnel. nikola took a big part of the business for awhile and Change a lot of thing it igor and ludmilla where in
direct involved in the process. Behind that , nikola couldn’t managed it and both of them turned to their informal board of directors. Mathew Mcrae does not think about iggy’s employee. He seems to be tooking advantage of his position and hiring their high school friends to be CFO.
3.Questions:
1. Who is the decision maker in this case and what is their position?
Matthew Mcrae the COO of Iggy’s bread of the world.
Igor and Ludmilla Ivanovics the owner and founder of Iggy’s bread of the world.
2. What appear to be the issue? (concern/problem/challenge/opportunity)
.communication
organizational culture
leadership
management
3. Why has the issues arisen and why is the deci
sion maker involved now?
communication
the new management team under McRae did not effectively communicated with Iggy’s employees. Also McRae failed to communicate with Ivanovics by not seeking their opinions while hiring key new management personnel. New management team’s inability to effectively communicate with Iggy’s employees and its owners grew discontent among Iggy’s employees and its owners. Overall, the communications within organization was worse. the new management failure to utilize positive communication leaderships skills like being verbally involved, being informed, seeking other’s opinion, initiating new ideas, and being firm not rigid.
organizational culture
organizational culture is very productive when company is small and doesn’t have any intension to grow. But when the company is growing it becomes difficult to keep the family spirit with all people with different tempers, previous lives and experience which were not obligatory v
ery positive. Such involvement of every worker in entire business during the growth of the firm could cause the nurturance of competitor by your own hands. The worker can learn everything about your business, retire and create his own business.
leadership
Igor realized that he was not able to run business and to stay involved in the baking any more. He believed that hiring new managerial team would help him to focus on the mission he was trying to achieve. He thought that real business people would run the organization in day to day operations.
management
it was very difficult to the Ivanovic’s to keep family spirit and invite professional management team because they have slightly different aims. The aim of professional management is to earn as much money as possible while the Ivanivic’s aim was to produce wonderful bread and deliver it to their customers with their love. To my mind Ivanovic’s should hand over to the professionals the liaison role, let the professional management represent rapidly growing company in front of different institutes. Another role that can be given to professionals is disturbance handler- they can solve arising problems, also they can allocate resources, conduct negotiations. Also I would have given them monitoring, role of disseminator and spokes person.
4. When does the decision maker have to decide/resolve/act/dispose the issue?
5. What is the urgency to the situation?
6. Why the business successful at the beginning?
7. Who were in charge at the beginning?
8. Who are the new management, and what it’s their position?
9. What changes that been occur?
10. Who is responsible for that change?
11. What is the problem?
12. Who cost the problem?
13. What the cost of the problem?
14. Does Ludmilla should be blamed on, of these issues?
Yes, because Ludmilla who is the one suggested bringing in Matthew McRae as a consultant.
15. Don’t you think that everyone is happy with the changes?
No, because many of the employees at iggy’s perceived the new management team to be too isolated from the operations and culture that were at the heart of the company.
4.Hypothesis:
Potential Hypothesis 1:
The company Iggy's Bread of the World is the American dream come true. Two immigrants that are passionate about high quality natural food learned in a high class New York restaurant how to cook and to passionately improve their skills. The Ivanovic's, Igor and Ludmilla, learned how to run a business directly after their learning experience with friends and professionals but soon understood that their personal future lies in their own special way to run their own business.
Their marketing was all about food quality and satisfied employees when they started Iggy's. Ludmilla hired over 50 people from over 20 different countries with all different stories to tell. Ludmilla knew that her mission was not just to see through her employees eyes, but also to focus on basic motivational factors. She knew that it was not possible for her to learn trust from somebody who faced a war situation back home in the country for his or her whole life. But what she could do is to focus on elimin
ating demotivating factors. The idea behind Iggy's were not pay plans that might promise a high payment for carrot-and-stick motivational factors. She did not want her employees to "bowle alone", which means that she focused on group work and group activities in and after work time.
Their philosophy about high quality was transferred to the employees by visiting both the ingredient producer and the customers, so that the worker had an idea from what their food was made from and for whom it was made.
The situation changed when Ludmilla and Igor decided to grow the company bigger and suggested to bring in Matthew McRae as the new COO to relieve her husband Igor from too much overtime at work.
The new COO hired a new management staf
f and employees felt the "new management team to be too isolated from the operations and culture".
Ludmilla and Igor were COO, HR in two persons. Distribution management and CFO was done by Igor Ivanovic before. Ludmilla followed a strategy of transparency and involvement. The new management team was more focused on expanding the business and their own pay plans as McRae pointed out in a letter to the Ivanovic's.
McRae and his team formed a corporate organization and did not focus on the old Iggy's culture about employee involvement anymore.
If the situation would go further after the board meeting the company might still be growing bigger, but it would loose the idea of a family oper
ated business with an self motivated employee in focus.
Potential Hypothesis 2:
Potential Hypothesis 3:
Considering ongoing discontent among Iggy’s employees and its owners and the new management failure to utilize positive communication leaderships skills like being verbally involved, being informed, seeking other’s opinion, initiating new ideas, and being firm not rigid. Bringing consultant to mediate discussions between the Ivanovics and the new management team was the only option left to improve the communication and reduce the discontent. In ability to communicate could lead to disaster and consultant could potentially open the doors of communication and mitigate the problem.
Potential Hypothesis 4:
If new comers work in the company only for a short period then they should not try to introduce new changes quickly without first knowing comprehensively about the company in details such as its business objectives, missions and vision so as to avoid friction among the workers.
5.Proof & action:
Employee feedback and the Balance sheet statement shows that there is a decrease of Profit after taxes after the new management took over. The workers who have been here for a long time know the company and know what needs to be done. It’s an unusual company, and we do things differently than others do. The new people came in and made a lot of changes very quickly without really knowing the employees or fully understanding what iggy’s is all about.
During ludmilla’s first full day in the office, coleman, the VP of sales &marketing presented her with an organizational chart detailing the company’s new hierarchy, telling her should make sure to follow the lines of responsibility as indicated in the chart...... i’ve been away for couple of years but still i come back and someone i don’t even know is telling me who is should talk to if i have problems.
In addition to new management lack of communication ability, the part of problem was also Iggy’s fast growth and Ivanovics decision to reconfigure the leadership structure of the company without losing their control over the fundamentals. The Ivanovics decided to bring McRae as chief operating office (COO). The problem is that COO seemed to make thing more complicated as there is already.
6.Additional Evidence.
The deterioration of the company’s culture and core values may have happened because of the fast paced growth and change in management structure took the company from a social model management style to more of a pure economic model.
This unique culture allowed for the workers to create a very high quality product and deliver a high level of service that naturally brought the company success and profitability as a secondary result.
Many workers felt that although it was nice to have some people in place that understood the business side of things that many of the bakery workers felt that the new management team did not have any interest in getting to know them.
Many felt that the hiring of the management team and changes in the corporate structure were being made to quickly and without a full understanding if what the company was about.
The change in the management style from more of a social model to an economic model was also felt as Igor, Nikola, and Ludmilla began to feel out of touch with the company.
Igor, Nikola, and the workers began to feel that they were not being treated fairly and mainly in the area of benefits. Not the typical benefits such as medical coverage and vacation but more of the benefit of no concrete chain of command and open communication with their managers and owners of the company.
The culture and organization was seen as very flat and employees were encouraged to work through their problems, even problems from home with their managers. The change in the motivation of the employees may have also resulted from Matthew McCrae’s need for power. From the beginning of the expansion and introduction of the management team it was clear to many of the employees that he and his team was more interested in status and position than the culture that led to their initial success.
