Furnish Incorporated

Executive Summary

To:                           Theresa, CEO of Furnish Incorporated

From:                       Group Three - Godfather Consultants

Subject:                   Understanding Furnish Incorporated’s Foreign Customer Needs

Date:                        Monday, November 5, 2012

Primary Problem

Theresa needs to determine how to communicate to understand the needs of international clients.

Alternatives:

1. Status Quo
2. Decentralization of the Organizational Structure
3. Team Organization
4. Catalogue for Each Market
5. Management by Objectives

Facts Considered:

1)          The company is arranged along product lines in which one department is responsible for all aspects of the line.

2)          A hierarchical system is used within the company; Theresa is at the top as Chief Executive Officer.

3)          Customers in the Asian and European markets demand alterations to the products in order to meet their needs.

4)          Employees and sales revenues are being lost in Asia and Europe as a result of Furnish Incorporated not being able to meet customers’ needs.

5)          Competitors are gaining Furniture Incorporated’s potential customers in Asia and Europe.

6)         Furnish Incorporated is a corporation.

Recommendation:

It is recommended for Theresa to use the combination of alternative two, decentralizing power, and alternative three, forming a new design team, in order to solve communication issues in satisfying the needs of the clients across the three continents.  By decentralizing the hierarchical structure at Furnish Incorporated, the decision making power will be more dispersed amongst the organization; the communication in the company will become much more fluent and effective.  Decentralizing the hierarchical structure at the company will allow the employees to maintain a greater level of control over the business.  This can motivate employees, promote innovation, and create a more enjoyable work environment.  In order to fully satisfy the needs of the consumers, the company also needs to form a new design team.  This new team is formed specifically to meet the needs of the clients in European and Asian market.  Teamwork can be more effective and efficient in completing tasks than working individually.  This new team can also help the employees in the company determine what to do with their new power obtained from decentralizing power.  This can help the company make better decisions and react more quickly in satisfying consumers' needs.  This is why the implementation of the decentralization should be accompanied by the implementation of a new design team.  If the company executes these alternatives, Furnish Incorporated can solve their communication issues and satisfy the needs of their clients as well.

Assumptions 

• The products offered by Furnish Incorporated are exactly the same in North America, Asia, and Europe.
• Asian and European customers will choose Furnish Incorporated, if products are modified.
• Furnish Incorporated is currently operating under a hierarchical organizational structure and follows a line of authority.
• Theresa has the final decision making power in any decision and has the highest authority at Furnish Incorporated.

Statement of the Problem:

Satellite Problems:

• Furnish Incorporated is losing customers and sales revenues to producers who can meet consumer needs.
• Employees of the sales force divisions in Asia and Europe are frustrated and leaving.
• Major customers in both the European and Asian markets may be forced to go to other producers to meet their needs leading to the loss of accountability on the global scale.
• Theresa may become stressed with the lack of sales and can potentially make poor decisions when she does not have all of the information available.

Primary Problem:

Theresa needs to determine how to communicate in order to understand the needs of international clients.

Implications

Implications on the Organization

• Furnish Incorporated will be vulnerable to bankruptcy if they keep losing their customers and employees.
• Furnish Incorporated will continue to lose revenues if needs are not met.
• If Furnish Incorporated cannot find the solution to understanding the needs of European and Asian retailers, they will never be able to satisfy their customers' needs.
• Furnish Incorporated will gain a bad reputation if customers and employees continue to be lost.
• The loss on the opportunity in the global market will lead to a smaller growth in the organization if they cannot exploit these new foreign markets.

Implications on the Personnel

• The recent loss of customers from the foreign market will lead to low morale amongst the remaining employees, who may now also question their stay.
• Investors have limited liability as Furnish Incorporated is a corporation, however if Furnish Incorporated fails, investors will lose their personal investments.
• If needs are not met in Asia and Europe, Furnish Incorporated may have to discontinue these product lines, leaving employees without jobs.
• If Theresa cannot solve the issues in Furnish Incorporated, her ability to lead the company will be doubted.
• If the manager does not properly match an employee’s capabilities with the appropriate responsibilities, the employee will not be as engaged in the work.

Alternative Solutions

Status Quo

Furnish Incorporated uses a hierarchical system, a formal structure of communication (Griffin, 2008, p.438), in which Theresa will remain at the top as Chief Executive Officer (CEO).  As CEO, Theresa is accountable for Furnish Incorporated’s overall performance on a daily basis (Griffin, 2008, p.94).  If Theresa does not determine how to communicate, she will continue to coordinate the achievement of goals as well as ensure that solutions to problems are in progress.  Executives, middle managers, and employees will remain below her down the hierarchical chain.