Executive Summary
The proposed paper analyzes Yahoo!’s case and the company’s problem. First, the immediate problem, such as poor management, is outlined. Next, the SWOT analysis is performed to acquire an enhanced vision of the situation. The four management functions and how they might be employed to attain better results are discussed. Finally, an action plan implying cultivating a new culture and a contingency plan if an unexpected situation emerges are offered.
Statement of Immediate (obvious) Problem(s)
Yahoo! ‘s central problem at the moment is ineffective management. The company’s top manager, Marissa Mayer, fails to correctly realize the current peculiarities of the market, its diverse demands, and the need to initiate positive change to ensure the corporation evolves. The lack of competencies demonstrated by Mayer also impacts the company’s poor human resource management approach. This means that the root cause of the current decline in Yahoo! ‘s stock prices and inability to generate income is the wrong development strategy because the top manager fails to create the basis for positive change. Additionally, the company might lack the culture necessary for transforming its functioning and attaining positive outcomes.
Situation (SWOT) Analysis
Performing the SWOT analysis might enhance one’s understanding of the nature of the company’s current problems.
Strengths
- Recent acquisitions, such as Tumblr, establish the opportunity for a further rise.
- The known brand name is popular among clients globally and can lead to the acquisition of new clients.
- Availability of financial resources that can be spent on new projects aimed at improving the company’s work in the future.
Weaknesses
- Poor HR management leads to declined morale among employees, high rates of dissatisfaction, and turnover.
- Around 33 percent of the workforce left the company in 2015, which means it lacks experienced and skilled specialists, and new ones should be hired.
- Weak strategic planning is evidenced by the reluctance to guarantee the transition of its offerings to mobile platforms.
Opportunities
- Effective use of new acquisitions to ensure the company’s growth and become a leader in the sphere.
- Improving HR management to ensure higher employee retention rates and satisfy their basic needs.
- Moving to new segments by focusing on mobile devices and ensuring Yahoo! can work on the platform.
Threats
- The high level of rivalry in the segment where Yahoo! works might impact the company’s revenues.
- There is an increased risk of substitution because of the emergence of similar offerings.
- The market’s fast-changing nature requires higher flexibility and adaptivity.
In such a way, the SWOT analysis shows that the company has some strengths that might be used to create the basis for further evolution if the correct development strategy is employed.
Four Management Functions
The outlined issues might be resolved if the four management functions of Yahoo! are exercised effectively. Thus, the planning function implies creating a strategic plan with clearly outlined goals and methods to achieve them.1 It should have measurable objectives, such as the desired capitalization, stock price, and the steps to attain success. As for organizing functions, the existing hierarchical structure should be reconsidered. It lacks the flexibility and adaptiveness required to function in the selected sphere.2 Shifting to a team structure is recommended, as it dives into innovation, is more agile, and contributes to higher employee satisfaction levels.3 It means that the problem with turnover can be resolved.
The leading style used by Yahoo! should also be reconsidered. The authoritative methods are not effective, as employees feel scared and unprotected. Instead, the transformational leadership approach might effectively inspire workers, innovate the processes, and develop new task performance methods.4 Finally, the controlling function requires setting measures to evaluate progress. Thus, achieving a stock price of $60.00 might be one of the company’s goals. Additionally, the market share of 25% might be a desired outcome for Yahoo! in terms of the resources it has at the moment.
Action Plan
The action plan for promoting positive change should consider the current problems Yahoo! faces. First, the company should alter its organizational culture to reduce turnover rates and cultivate employee creativity. Second, the corporation should focus on mobile devices as the market’s future. The top management is the main party responsible for the plan, and it should employ transformational leadership and be open to accepting ideas offered by specialists who possess actual knowledge. The main reason for this action is the poor patterns existing at the moment. The plan should be realized by communicating with employees’ representatives to establish the desired structure and work environment. The shift of priorities must be made by analyzing the segment and clients’ demands to create an image of the current demands and how they can be satisfied.
The contingency plan can be used if unexpected outcomes emerge. This requires investing in developing social media applications and hiring specialists to enhance the company’s HR function and create the basis for future development and rise. It might also require finding investors and new acquisitions as part of the growth strategy to increase the stock price and help the company to compete with its rivals.
Conclusion
Yahoo! ‘s case shows how weak management might impact outcomes and poor financial performance. Changes in management, effective planning, and the establishment of a positive employee culture will help the brand resolve its current problems and evolve. If new challenges emerge, the company will be more resilient because of the team structure, improved creativity, and readiness to collaborate to face problems and resolve them.
References
Hill, C., Schilling, M., & Jones, G. (2019). Strategic management: Theory & cases: An integrated approach. Cengage Learning.
“The four functions of management: what managers need to know.” American InterContinental University. 2023. Web.
“Team-based structures: examples from the best companies in history.” USC Annenberg. 2023. Web.
“What is transformational leadership? Understanding the impact of inspirational guidance.” University of Massachusetts Global. 2023. Web.
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