Professional Documents
Culture Documents
A few problems are identified in Maggie Jacksons Nature Beauty Shop since she is away. The first
is the lack motivation from the employees. Motivation refers to the process by which a persons efforts
are energized, directed, and sustained toward attaining a goal (Robbins and Coultor, p.430). Motivation
has direct relationship with employees performance; the lack of it could lead to the declining
performance and eventually the failure to meet the corporate objectives. This lack of employee
motivation in Nature Beauty Shop is evidenced by the rapid increasing employee turnover, from almost
zero into 60%. This fact results from the decreasing job satisfaction from employees. Based on theory by
Abraham Maslow, human has five hierarchy of needs: physiological, safety, social, esteem, and self-
actualization needs (Robbins and Coultor, p.432). In the time when Maggie was managing the company,
employees need of esteem was fulfilled as Maggie gave sufficient financial and nonfinancial reward to
acknowledge and respect employees achievement. Under Tony management, he cut the sales bonuses
and reduce the salary as well as the working hours. He has also never taken into account the input from
his employees in his decision making, making employees feel further disrespected and unheard.
Furthermore, the need for self-actualization was also fulfilled as Maggie gave room for learning and
advancement through training and internal hiring. Tony on the other hand, loose the training as well as
internal hiring and promotion, leaving employees stuck with their current position and job as well as pay
level. The discontinuance of stores visiting also decreases employees social need. Combined that with
the decreased fulfillment of security needs resulting from the warning for employees who do not reach
sales goals even when they give excellent customer service, and further a decreased in fulfillment of basic
physiological need from the reduced in the salary; employees loose drivers to motivate them in working,
The other significant problem is vast difference in management style. Management involves
coordinating and overseeing the work activities of others so that their activities are completed efficiently
and effectively (Robbins and Coultor, p.8). So a manager has to perform four functions of management:
planning, organizing, leading, controlling (Robbins and Coultor, p.9). In order to do the functions well, a
manager needs to have these skills: conceptual, human, and technical. Conceptual skills are the skills
managers use to think and to conceptualize about abstract and complex situations (Robbins and Coultor,
p.13). Tony has a good conceptual skill, but is his concept the most appropriate for the company right
now? His core concept from which he bases his decisions are cost cutting due to the expansion, which is
not considered the best strategy for the company, makes him fail in reading the company segmentation,
targeting, and positioning in local Australia market. Nature Beauty Shop has been a leading in socially and
environmentally friendly cosmetic and beauty practices; which does not exactly result in low production
cost, but their target market is willing to pay a higher price for the high quality products and the supported
causes behind it. Tony does not show a high human skill either as he does not communicate much with
his employees or receive any input from them. Furthermore, according to Henry Mintzberg there are
three managerial roles (specific actions or behaviors expected of and exhibited by a manager) a good
manager has to have, which are interpersonal, informational, and decisional roles (Robbins and Coultor,
p.11). Tony Smith does not show a good interpersonal role as he is not seen as a good leader by his
employees, they are angry with decisions Tony takes and how he behaves in the office. Tony also does
not take input from employees or even talk much with them, making him lack of informational role. He
shows some good quality of decisional role as he solves problem with cost, but he failed in taking the
problem into perspective of the whole company and adjust it with the situation. Another significant
problem concerning Tonys management is how he failed to embrace the existing corporate value and
culture; and failed to continue to apply it with his management and leadership style as well as his
decisions. Values represent basic convictions that a specific mode of conduct or end-state of existence is
(Robbins and Judge, p.144). Values lay the foundation of understanding, perception, behavior, and
decision throughout a company. Since it began in 2013, Nature Beauty Shop has determined its
positioning in the beauty market; it values social and environmentally friendly practices. It only uses
organic materials supplied by poor developing communities, and also has recyclable and minimal
packaging. The culture the company embraces is also aligned with the values. Organizational culture is
the shared values, principles, traditions, and ways of doing things that influence the way organizational
members act (Robbins and Coulter, p.52). Basically it is how things are done around here. Nature Beauty
Shop has a family-like work environment, good relationship and understanding between departments,
also learning and developing opportunities. These are also what drive people to want to work there. Tony
decides to ignore these values and culture, and choose the framework to cut costs everywhere. Just like
explained before, it has affected the employees work satisfaction, has decreased the quality of materials
used in production, hence decreased finished products quality and customers satisfaction, eventually
Another major problem faced by Nature Beauty Shop is still related to management, but
considered as the biggest change Tony implemented: creating a new position of Director of Supply Chain
Management, pointing his friend Wallace for the position, and for Wallace to implement a whole different
supply chain scheme. Supply chain management (SCM) is the vital business function that coordinates and
manages all the activities of the supply chain linking suppliers, transporters, internal departments,
third-party companies, and information systems (Reid and Sanders, p.16). SCM manages the whole flow
starting from the purchase of raw materials, the inventory management, the distribution channel, and the
delivery of finished products to final customers. The objective is to have everyone in the chain work
together to reduce overall cost and improve quality and service delivery. In applying this SCM, a manager
has to put it into companys perspective, he must adjust with the companys value and positioning. Tony
ignores the culture of internal and appropriate hiring, he hired his friend instead who does not have any
beauty background, and was indicated to have been hired due to his connection to local supplier, mostly
his family and friends. This hiring method itself is surely considered as unethical and not in the best
interest of the company. Next, Wallace ignores the existing value and system where they use organic
materials from developing communities, and changes almost half of the materials into local lower-quality
and cheaper materials that mostly come from his connected suppliers. Tony ignored the employees
concern about this problem and quickly it results in customers complaints about products quality,
declining demand and company reputation, despite the lower production cost generated.
Maggie Jacksons Natural Beauty Shop is facing declining products quality, declining demand,
worse customer satisfaction and hence worse reputation, and also higher employee turnover over the
last four months, during which Maggie was away in UK and was replaced by Tony Smith as the Managing
Director. A few problems are leading to this result. The first is the lack of employees motivation leading
to declining performance. Next is a vast difference in management style from Tony compared to Maggies,
where Tony decides not to continue the existing values and culture of socially-environmentally friendly
practices, family-like working environment, and learning-developing opportunities; instead chases cost
cutting practices throughout the company. The other major problem would be the implementation of
new supply chain management with its new scheme that again, is more aligned with the new framework
of cost-cutting. This paper will further analyze the solutions for the first and last problems discussed
above.
SOLUTIONS
The first problem that is about to be addressed here is the lack of employees motivation. The
solutions will have to correspond with the factors causing the declining motivation as mentioned before,
basically fulfill the needs of employees to generate better working satisfaction that will lead to better
performance from them. Tony has to reapply the original compensation scheme: the sales staff bonuses
and the previous wages rate as it serves the basic physiological needs of employees. The other solution
would be to restore the previous corporate culture with the family-like working environment. The store
visiting practice also needs to be restored since it counts for the social needs of employees. Furthermore,
Tony needs to have a better role as leader, he needs to improve his interpersonal skill as well, talk more
with his subordinates, consider their inputs, basically work together with his employees instead of just
ordering around. This will greatly improve employees need of esteem, respect, and recognition. Last he
also needs to restore the learning and internal hiring opportunities as it will increase employees self-
actualization needs. However, restoring these practices will increase the companys budget that is already
wearing thin due to the international expansion plan. To make it less worse, Tony could still hire the
university students as temporary or internship workers and hire the fresh graduates to fill the technical
or start-up positions. They are more likely to receive lower rate of salary without compromising the
The supply chain management problem needs to be addressed as well. The emphasis needs to be
on the improvement of the division, from just purchasing division which only takes care about purchasing
raw materials, into supply chain integration that manages from raw materials supply until distribution of
finished products to final customers. In doing so, they need to go back to their core social and
environmental value, by buying organic materials from developing communities and maintaining the
products quality. They also need to improve the customer service. Products and customers service quality
are what consumers complaint the most. However, the production cost will be higher just like it used to
be. I would suggest to diminish the Director of SCM position, and replace it with the usual Head of Division
just like the company used to have. More responsibility that the new division has will inevitably mean
higher salary, but not as high as the director position required. Wallace clearly needs to be replaced with
other person, who could be promoted from internal senior supply staff who understands the way the
RECOMMENDATIONS
Uddin et al., (2013) suggest that organizational culture have significant positive influence over the
performance of organization, and there is a vital relationship between culture and performance. They
further argue that cultural traits cannot be copied and therefore it could be source of organizational
sustainability. Only by restoring the original Nature Beauty Shops values and culture that it can improve
its performance. The value and culture of socially and environmentally friendly practices is what builds
the company since the very first time. It is also what differentiates it with tens of other firms in the same
beauty-cosmetics industry. So far, this foundation works as evidenced by low employees turnover and
high sales growth. Workers and customers are satisfied. Clearly the company needs to gain customers and
workers trust back by going back to their previous foundation and doing following recommendations.
They need to boost employees motivation. Priyono and Sukmaningrum (2016) research showed
that there is a positive and significant impact of employees compensation on their work satisfaction and
performance. Whereas Alderfer (1969) proposed a regression theory stating that when needs in a higher
category are not met then individuals redouble the efforts invested in a lower category need. The
employees of Nature Beauty Shop are not satisfied with their current social, esteem, and actualization
needs; therefore they expect a lot more from the physiological and safety needs coming from their salary.
These researches emphasize Tony Smiths need to restore the previous compensation scheme with sales
bonuses and higher wages per hour rate. On the other hand, motivation could also as importantly be
increased with nonfinancial reward such as the fulfilling higher needs by improving interpersonal
communication between manager and subordinates, and reapplying learning and internal hiring scheme.
The higher production cost resulting from the restoration could be lessened by hiring fresh graduates who
The other recommendation is to improve the supply chain management, biggest change Tony
implemented. Beamon (1999) developed indicators to measure a supply chain performance. These were
flexibility, resources and output. Flexibility is the capacity to adapt to changes in terms of products,
delivery times, volume and mix. Resources is the efficiency in using the available resources in a supply
chain system, including the costs, inventory levels, and return on investments. Output measures include
customer satisfaction (in terms of on-time deliveries, order fill rates and response time), sales quantities
and profit. For Nature Beauty Shop, rather than just pursuing the efficiency and cost saving but sacrificing
products quality and service, they need to realize that customer satisfaction is also what determine a good
supply chain management. Furthermore, Muntake et al., (2017) suggests that supply chain integration
and flexibility would ultimately result in positive gains for any business that pursues them. This company
needs to integrate supply chain from supplies of materials to distribution to customers. This means going
back to using organic-higher quality material from developing communities, and improving customer
service. While they also need to replace Wallace to person who understands better about the application
Alderfer, P. (1969). An empirical test of a new theory of human needs. Organizational Behavior and
Human Performance, 4(2), 142175. http://dx.doi.org/10.1016/0030-5073(69)90004-X.
Beamon, B. (1999). Measuring supply chain performance. International Journal of Operations and
Production Management, 19(3), 275-292.
Dessler, Gary. (2005). Human Resource Management. New Jersey: Prentice Hall.
Muntaka, A., Haruna, A., & Mensah, H. (2017). Supply chain integration and flexibility and its impact on
business performance. International Journal of Business and Management, 12(4), 130-143.
https://doi.org/10.5539/ijbm.v12n4p130
Priyono, S., & Sukmaningrum, D. (2016). Effect of compensation, motivation and organizational climate
on employee satisfaction: Study on PT. Sumber Alfaria Trijaya Tbk. in Gedangan-Sidoarjo.
International Journal of Business and Management, 11(2), 212-220.
http://dx.doi.org/10.5539/ijbm.v11n2p212
Reid, R. Dan, and Sanders, Nada R. (2011). Operations Management: An Integrated Approach. New Jersey:
John Wiley & Sons, Inc.
Robbins, Stephen P., and Coulter, Mary. (2012). Management. New Jersey: Prentice Hall.
Robbins, Stephen P., and Judge, Timothy A. (2013). Organizational Behavior. New Jersey: Prentice Hall.
Uddin, M., Luva, R., & Hossian, S. (2013). Impact of organizational culture on employee performance and
productivity: A case study of telecommunication sector in Bangladesh. International Journal of
Business and Management, 8(2), 63-77. http://dx.doi.org/10.5539/ijbm.v8n2p63.