In 2010, Jeff and Paul who were proprietors of Kitchen Delight bought a 70% stake into their rival company, Kitchen Magic Ltd., to consolidate their market position. Before buying the new company, they had had a long-standing relation where Kitchen Delight used the Kitchen Magic Ltd. warehouse to act as transit points for products during distribution throughout the country.
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The business of Kitchen Magic Ltd had been declining for the last few years. However, when the Management of the former company approached Jeff and Paul, the deal was too good to ignore. By taking over the company with a controlling stake, they knew that the bulk of the work lied on their part to run around its fortune, thus making it profitable and consequently serving to consolidate the position of Kitchen Delight.
Once they took over the company, Jeff and Paul realised that they had inherited more problems than they had thought. Firstly, it had a very poor customer service, poor quality products, and a highly demoralised sales force. Within the first year, they had six of the company’s main clients.
It was an awakening point for the two businesspersons who had to take drastic measures to identify ways through which they would save the company and their investment.
An external consultant found that the manager of Kitchen Magic Ltd., whom the parties had inherited, was driving the company out of business based on his apparent disability to maintain good lasting relationships with customers, unresponsiveness to market demands and needs, poor stock management, and an inadequately skilled workforce. It was important for change to happen for the sake of the business’ future.
To resolve the problem, the external consultant called for an overhaul of the organisation’s leadership at Kitchen Magic Ltd. and a shift towards a good customer care, responsiveness to market demands, and customer satisfaction.
Jeff and Paul new that bringing such changes in the way in which the sales force conducted its business and the process of building confidence again on the remaining customers who were also fed up by poor services was going to be a difficult task.
With time, their efforts paid off as the company had a drastic turn around. Sales began rising. Besides, customers expressed more satisfaction. Moreover, employees became motivated to do their tasks.
Insight and Implications
According to Beerel (2009), change in an organisation must be handled with a lot of precaution since there is always resistant from those who want to maintain the status quo. One of the key models of change management is the Lewin’s change management model, which guides the process of change in three key steps, namely unfreeze, alter, and refreeze.
This model is very relevant to the above case since the management had to challenge the way things had always been done. The company proved the need for change (unfreeze) and then suggested and implemented change processes and new ways of doing business (change). Now, the business is in the process of making the new changes as part of the organisational culture (refreeze).
In this process, leadership is very important. It requires pacesetting where leaders take the initiative of guiding the organisation to adopt and accept new ways of doing business. Ultimately, through a dedicated leadership and the application of proven models of change management, Jeff and Paul were able to turn around a company that was on a path to death.
Tera Nova Advertising Ltd
In 2013, Tera Nova Advertising Company approached my consulting company to undertake a market research that would decide, which direction it would take following the increased competition from other advertising firms. Although it was not a market leader in its adverting segment, its share as evidenced in its profit had been going down for 2 years. At the time, the projections showed that the company would make its first loss.
The realisation was a course for worry for its management. What is it that other companies were doing that Tera Nova Advertising was not?
What was the best way forward to address the issue and make the company profitable? It was recommended that the best way for the company was to expand its business model to include new advertising services such as email marketing and market research among other services that it had never tried before.
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The management of Tera Nova Advertising Company took the recommendations immediately and began the process of implementing and marketing its new services to its customers. However, it soon emerged that employees and staff members were not well prepared for the change. They had a hard time of delivering quality services to customers in the delivery of the new services.
The company was in the verge of failing to achieve the desired reprieve, a situation that would be unacceptable if the company was to remain afloat. There was the need to have a strong leadership to guide the process of implementing the new business processes successfully.
The company adopted a plan to offer the necessary support through training, motivation, and implementation of teamwork process to bring each individual on the same page on the status of the company and the reasons for the changes that were taking place.
The efforts paid off since the company was able have a workforce that was capable of offering services to customers in diverse areas of marketing. Soon, the company was recording high growth rate. It gained a competitive advantage over its competitors after it combined its previous services with the new ones. It expanded its resource base.
Insight and Implications
In the successful implementation of change, the leadership styles that an organisation adopts are very important. Its success depends on the situation at the time. In the above case study, transformational leadership was important in guiding employees to adapt to the new changes.
According Goldsmith (2010), transformational leadership was very effective in transforming the business of Tera Nova Advertising Company since leaders were able to provide support and/or encourage individual employees through their challenges in adopting the new ways of doing business. The leaders acted as role models when they motivated employees to be open to new changes.
Further, they fostered their ability to explore new ways of doing business. However, the fact that leaders become more engaged in the activities of the organisation and more concerned of the welfare of employees does not indicate a weakness.
Transformational leadership also calls for leaders to be firm and strict in ensuring that the organisation retains focus on its ultimate goals. At the end, Tera Nova emerged stronger and with better capacity to adapt to changes. It maintained competitive advantage in the highly aggressive industry.
Avery, G. (2004). Understanding Leadership: Paradigms and Cases. London: Sage.
Beerel, A. (2009). Leadership and change management. Los Angeles: SAGE.
Cameron, E., & Green, M. (2004). Making sense of change management a complete guide to the models, tools & techniques of organisational change. London: Kogan Page.
Goldsmith, M. (2010). The AMA handbook of leadership. New York, NY: American Management Association.
Northhouse, P. (2013). Leadership theory and practice. California, CA: Sage Publishers.