Two Organizing problems at De Luca Wines and how they have impacted the business
The two organizing problems at De Luca Wines are management of the large workforce (leadership) and strategic planning. De Luca Wines was set up specifically to provide wine and beverages by a Welsh immigrant and since then still boasts of being among the largest department store that has been in continuous operation in the industry of wines (Barney 2002). With a large workforce, De Luca Wines at some point started experiencing difficulties in its operations that it became apparent that it was not operating under profit. This caused the management through well-outlined management concepts and strategies of planning and leadership to take measures to rescue the corporation.
In 2003, there was such strategic planning that saw the closing of two stores that were considered unprofitable and these were the De Luca Wines online web-based business that was running at a loss and the Gourmet Food Retail stores called the Food chain (De Luca Fine Wines 2011). The management led a renovation campaign where many of its stores were revitalized including the Market Street stores and the Flagship Elizabeth Street store situated in Sydney. The management strategies greatly improved operations of the business and the entire company have enjoyed flamboyant economic profitability as well as improving its profile and this is owed to the increased consumer spending boom and the acquisition of business deals and mergers with other renowned companies (De Luca Fine Wines 2011).
These two problems regarding planning and leadership have greatly affected business at De Luca Wines since they are the ones that are centrally involved in the management of human resources and realization of profitability. For instance, leadership was an element in the last Annual General Meeting in 2010 when it was apparent from the stakeholders that there was a need for improvement in the way the departmental leaderships had been conducted thus far (De Luca Fine Wines 2011). In addition, strategic planning was thought to be the reason why De Luca Wines struggled with realizing profitability at some point and this led to strategies being skewed towards restructuring the planning approaches that were being used at the time.
The Reason why the Problems Developed at De Luca Wines and how they can be Resolved
Reasons for the Problems Cropping
The main reason why these problems developed at De Luca Wines can be narrowed down to its organizational culture. Organizational culture is a specificity of corporations that makes them distinct and in the same breath determines the decision-making process that is used for these corporations. This means that organizations will be skewed to make decisions that meet their corporate objectives and vision and therefore it means that a similar circumstance may receive different decisions from different corporations depending on their culture and company vision and objectives (Bass 2003). For De Luca Wines, this dependence on its culture that has been conservative and unresponsive to the modern changes in global management and planning has been the one that can be said to have caused retrogression and plunged the organization into leadership and planning challenges identifies herein.
As regards leadership, De Luca Wines has been involved in a number of mergers with other companies as a way of expanding its operations and this has been done without proper preparation and adjustment to its leadership. It is required that in the event that an organization changes strategy like through mergers, it is imperative that the organization refines its vision and objectives in a way that astutely defines its culture. Strategies are usually designed to help organizations meet their goals and objectives and it is from these objectives that a corporation’s culture is born (Bass 2003). With this interlocking close relationship between culture and strategies formulated, it is clear that the two are mutually dependent. For example, when a marketing strategy is changed from say networking to channel distribution, it follows that decisions to be made will be skewed towards stronger CSR initiatives as opposed to the previous strategy of team building and self-sustenance. This is a classic example of what happened at De Luca Wines in 1999 when it merged with another Australian Wine Corporation and did not restructure its marketing strategy which led the two corporations to operate in conflict and difficulty. The inclusion of the other corporation in its operation was seen as not calling for considerable change in the leadership and planning strategies to be used and it is the reason that is widely accepted to have led to the eventual separation of the corporations (Bergman, Stagg and Coulter 2008).
Approaches that can be used to resolve the problems
There are a number of approaches that can be used by the management of De Luca Wines to address these problems with the view of resolving them. The first thing is to consider the important concepts that are imperative for mergers for instance so that when such strategies are preferred for expansion, there is proper incorporation and institutionalization of the mergers in a way that is profitable to the company rather than being disastrous (Bligh 2006). For instance, according to Bligh (2006) merging of two organizations with different cultures requires harmonization of the cultures so as they are in tune with each other. Chances are that organizations coming together have their own different goals and strategies of management and leadership which further implies that their decision-making processes will be different (Bradford 2005). When a non-profit making organization merges with a profit making organization, for instance, it is important for them to find common ground on what are their objectives so as the decisions they jointly make meets these objectives. The harmonization will effectively create an organizational culture that may not be what each of the organizations previously held.
To resolve the challenge of leadership, there are a number of basic concepts that are dependent on organizational cultures which make them unique, and ones that are adherent to ensuring that there is professional conduct of personnel and implementation of strategies instituted. Such concepts include concepts regarding employee interaction and involvement in the company decision-making process, CSR initiatives, and societal empowerment (Bradford 2005). These concepts define the manner of decisions that are made by organizations since they are to be skewed towards realizing the specific culture that the organization is steered towards through proper leadership.
To resolve the issue regarding planning, it is appropriate to note that planning is a great concept in management as it gives managers of corporation direction as regards where the organization needs to go and assigns timelines in which such directions can and should be attained and adhered to. As a function of management, planning allows managers capacity to adequately prepare for ventures intended to be taken and minimizes chances of surprise and unintended as well as an unexpected expenditure (Chatman and Jehn 1994). According to Cummings and Worley (2005) managers are under the ostensible requirement to have adequate knowledge of planning as to have a proper understanding of its purpose so as to be able to manage and lead their corporations adequately which has been considered as a recipe of greater preparedness when engaging in new business ventures and hence lead to the realization of greater profitability (Cummings and Worley 2005). A large workforce of employees as is the case ad De Luca Wines particularly requires proper planning so as to ensure that there is no clash of events, under-use of staff and resources and that the overall management and running of the human resource is coordinated appropriately which shows professionalism and general direction for the entire company.
The next area in planning that may be an appropriate consideration for handling planning challenges at De Luca Wines regards the process of decision making during planning. Decision-making is a contemporary constituent of organizational management that is very instrumental to the success and satisfactory realization of organizational goals and objectives. It is the central role decision-making process takes in organizational leadership that makes the decision-making approach taken to be so imperative in determining the corporation’s success or failure (Chatman and Jehn 1994). The two broadly used approaches are the Inquiry Approach and the Advocacy Approach which to some extent are erroneously thought to be similar as discussed below and they are the ones that can be used to resolve the problems at De Luca Wines.
The rational decision-making process requires an understanding of all the details that are relevant for a given situation before a decision is arrived at. At De Luca Wines, the rational decision-making process in the Human Resource department should contain the following generalized steps: the problem should first be identified; the relevant information that is concerned with the problem are all to be tabled and analyzed to ensure that all the information is understood; the information then should go through a brainstorming session which allows for critical critique and scrutiny of all the possible responses to the given issue; from these deliberations, the suggestions should be given to the management of the department which then considers them critically thereafter makes decisions keeping in mind company policies and shareholders’ and consumers’ interests (Eisenhardt and Sull 2001).
Should a Review of Organizational Culture be factored into any Change-Management Plan?
A review of organizational culture is an element that can be astutely factored in the change-management plan in a number of ways. To discuss this, it is important to make general observations and highlights of a number of related things and concepts as follows. Human experience in success and development for man’s own sustainability finds no other parallel that attempts in the remotest way to rival progress and achievement as does management. This monopoly can greatly be attributed to the broad spectrum encompassing management of whatever form; be it personal, political, economic, religious or institutional. Engraved deep in management is what is considered the most defining factor by many scholars; leadership, transformational leadership which is usually a part of the organizational culture. According to Eisenhardt and Sull (2001), transformational leadership was eagerly developed by James McGregor in the late 1970s for political leaders but soon fizzled into the business field and eventually into almost all circles of management no doubt because of its credibility.
Transformational leadership draws most of its basics in the belief in charisma, inspirational motivation, and genuine apathy. These attitudes of zest and energy make transformational leaders captivating in their style of leadership that is passionate and inspiring. Its ever-present enthusiasm to inspire followers, painstakingly being mindful of their plight and continual encouragement never to give up entail its incredible advantages. We cherish epitomes of transformational leadership in icons like Martin Luther King whose dynamic and energetic appeal to his listeners moved the US Supreme Court in pursuit of fair play to criminalize racism, a luxury we forever remain indebted to him.
That notwithstanding, in a world that is increasingly preferring evidence-based leadership as opposed to mere charismatic appeal, today’s knowledge-driven society imbibes more in participative leadership style which is motivating to knowledge workers. It is in this just requirement for content (integrity and character) in leadership that transformational leadership is disadvantageous. To clarify this issue Kets de Vries (1996) says, ‘You can have great sales skills to get people on board but if you do so for unethical purposes, this style of leadership can be dangerous. Cult leaders, for example, are often transformational. Secondly, without good content leaders have nothing worth saying so it does not matter how powerfully they say it’ (Kets de Vries 1996, p. 87). This is a considerable factor to consider when thinking of a change in the management plan.
It is overtly clear that self-confidence and surety in what course one pursues encourage and gives confidence to the followers such that in the process of this admiration, the followers hope that somehow they may attain such charismatic levels of the leader in it becoming products of the transformation (Chatman and Jehn 1994). The risk in this self-confidence is that zest and vigor may be mistaken for truth much more like the proverbial cliché that what you believe in need not necessarily be true, however convincing. The infused eagerness and expectations of transformational leadership may still be counter-productive to an organization by wearing down the followers. Also, transformational leaders tend to embrace the ‘big picture’ while the finer details paramount to sustain their alluring vision eludes them. In a company, that is disastrous.
Organizational culture also encompasses such areas as handling disputes and disagreements. It is commonplace that most of the disagreements that occur among people can be traced to a breakdown in communication: something that was said and misunderstood leading into a confrontation, physical or otherwise. With such grave risks awaiting somewhere, a manager ought to have outstanding communication skills. In a managerial position, one is in leadership where he/she has to deal with a sizeable number of people under him/her most of which are clients and for thus his/her ability to engage them in talk with respect, apathy and restrain will have a huge bearing on the relationships involved and hence the business. So important is interpersonal relationships that companies have public relations (PR) officer and/or community social responsibility (CSR) to enhance good communication with the community. In response to this need, companies invest heavily in training their personnel in leadership and interpersonal skills to enhance harmony amongst themselves at work and for better treatment of their clients.
With the foregoing discussion, change in the management plan that requires a review of leadership skills and human resource management approaches most often has to include elements of effective communication skills that should be able to equip people with the ability to engage a varied audience with different backgrounds, level of education without prejudice. Essential of these skills include basic etiquette of listening and paying attention when talking with someone with genuine interest to see their point of view especially when you differ. In the workplace, wearing a smile and using kind, respective euphemisms in one’s daily endeavors will go a long way in lubricating work-place relationships with adorable harmony for maximum productivity.
Various cadres of workers depending on the nature of their jobs demand special leadership skills to address specific requirements of their work. The constant imminent dangers and great risks military personnel suscept themselves to as well captured by Maj. Gen. Thomas (Stonewall) Jackson in saying, ‘war means fighting… The business of the soldier is to fight…’, clearly imply brevity, decisiveness, and unquestionable obedience to the protocol as skills important in this field. The plague of corruption, power gluttony, and sycophancy that pervade politics require political leaders to cherish integrity, humility, and honesty as skills to accentuate them in a good light. For business leaders, slyness, novelty, and stewardship are among the skills that will equip them for their momentously competitive market.
In summary, therefore, management in its pure sense executes directions while leadership promotes them. The two are interdependent in many respects although leadership steers the way. For effective leaders, therefore, so much is expected of them to maintain their position in development. These are the elements and concepts that are important when it comes to change of management plan which as the foregoing discussion has indicated, requires the review of organizational culture in areas where it is appropriate and relevant for the specific plan in management that is sought or preferred.
Reference List
Barney, J.B., 2002. Organizational Culture: Can It Be a Source of Sustained Competitive Advantage? Academy of Management Review, 11(3), pp.656-665.
Bass, B., 2003. Leadership and Performance Beyond Expectation. Sydney: NSW.
Bergman, R., Stagg, M., and Coulter, J. 2008. Management 5. Sydney: Australia New Guinea Fishes Association (ANGFA).
Bligh, C., 2006. Surviving Post-merger ‘Culture Clash: Can Cultural Leadership Lessen the Casualties? Australasian Marketing Journal, 2(4), pp. 395-426.
Bradford, D., 2005. Reinventing Organizational Development. Sydney: Australia Magazine Pty Ltd.
Chatman, J.A. and John, K.A. 1994. assessing the Relationship between Industry Characteristics and Organizational Culture: How different can you be? Academy of Management Journal, 37(3), pp. 522-553.
Cummings, G. and Worley, G., 2005. Organization Development and Change. 8th ed. Sydney: Elsevier.
De Luca Fine Wines, 2011. De Luca Fine Wines, Web.
Eisenhardt, K.M. and Sull, D.N., 2001. Strategy as Simple Rules. Australia Daily, 79(1), pp. 6-16.
Harris, S., 1994. Organizational Culture and Individual Sensemaking: A Schema- Based Perspective. Australia Daily, 5(3), pp. 309-321.
Kets de Vries, M., 1996. Leaders Who Make a Difference. Australasian Marketing Journal, 14(5), pp. 86-93.