Business managers should be aware of emerging issues such as competition and changing customer expectations. Firms that ignore such concerns increase their chances of becoming obsolete. This discussion explores the unique malpractices and cognitive errors that affected Mattel’s performance. The paper also outlines specific aspects of organizational culture and innovation that could have been considered to transform the situation.
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Why Mattel’s Managers Failed to Change Decision-Making and Cognitive Errors
The case study indicates that Mattel was losing over 30 percent of its profits due to its inability to support meaningful decision-making processes (Nash & Duvall, 2005). Several reasons explain why the managers at Mattel were unable to implement such changes. The first reason was the leaders’ failure to transform with the times. Mattel continued to market its dolls without examining its customers’ needs (Nash & Duvall, 2005). The managers ignored the need to innovate and produce new dolls.
Ineffective leadership was the second reason that led to inappropriate decision-making processes. For example, Robert Eckert was a conservative leader who ignored the concept of business intelligence. The malpractices delayed the strategy, thereby making it impossible for Mattel to change its business model and products. The internal hurdles and inability to improve its main product also affected the company’s profitability.
Similarly, some cognitive errors might have contributed to the problem. The first one was the illusion of control. This error explains why the leaders overestimated their control and knowledge of various situations (Nash & Duvall, 2005). Mattel’s managers trusted the performance of the Barbie doll in the market. They assumed that the emergence of a competing brand would not be a threat. The second error was that of overgeneralization. The managers assumed that Barbie’s success could be replicated much faster. The error resulted in ineffective performance after Bratz dolls were introduced.
Factors Related to Innovation and Organizational Culture
Successful companies establish desirable organizational cultures using appropriate behaviors, norms, practices, and values. At Mattel, the leaders failed to capitalize on the strengths that had made the corporation successful (Nash & Duvall, 2005). Some factors related to innovation and organizational culture within Mattel’s setting could have led to improved performance. The first one was the presence of skilled employees and teams. These groups could present meaningful insights and produce superior dolls that resonated with the changing needs of every customer. Additionally, the company’s business intelligence was composed of adequate human skills and technological systems. This strength could have been embraced to ensure the organization was moving in the right direction.
Mattel’s skilled leaders were capable of promoting desirable organizational practices. They could ensure the corporation’s resources were utilized to promote innovation. This approach had been followed to produce the celebrated Barbie doll (Nash & Duvall, 2005). Appropriate leadership models could have led to better dolls and eventually maximize profitability (Kargas & Varoutas, 2015). Unfortunately, the managers failed to focus on these positive aspects of organizational culture.
The company supported powerful norms such as innovation, research, and ethics. The workers respected the decisions made by their superiors. The leaders could have embraced this cultural attribute to analyze the changes experienced in the market (Nash & Duvall, 2005). Ineffective decision-making processes and misconceptions affected the company’s profitability.
The unproductive leadership practices exhibited by Mattel’s managers affected the company’s business performance. Failure to implement desirable change and focus on the emerging needs of the customers resulted in new hurdles. The leaders misinterpreted the importance of organizational culture, thereby making it hard for the company to deal with competition.
Kargas, A. D., & Varoutas, D. (2015). On the relation between organizational culture and leadership: An empirical analysis. Cogent Business & Management, 2(1), pp. 1-18. Web.
Nash, K. S., & Duvall, M. (2005). How Barbie lost her groove. Baseline, 47, 36-52. Web.