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Apr 05, 2024

Assignment Task

You are all hired as a group of OB Consultants to make recommendations on the future direction of The COSMETICA INC Company for long term sustainability. Read the “The COSMETICA INC Company” case and answer the questions in Part I and Part II. Your answer should showcase your ability as a group to think strategically with consideration for company conditions, your knowledge of the course content and your ability to synthesize and augment the material across all chapters in the text or/and lectures.

The COSMETICA INC Company Case Study

Step 1 - Read the following description of the COSMETICA INC Company

Cosmetica Inc, is a medium sized Canadian manufacturing company in Vancouver Canada, with product such as Baby bath, Bath Booms, Body care, Men’s Care, Pet Care, hair Care, Organic Essential Oils and etc. The Carlson family incorporated the company approximately 40 years ago. Ten years ago, the company offered shares to the public through the over-the-counter market. COSMETICA INC experienced significant growth approximately 5 years ago and they have expanded nationally. Recently they have been considering expanding their facilities and product lines again to States, Mexico and most of South America to take advantage of the rapidly growing in the industry.

While the company has had a fluctuating growth but for the last couple years the growth has slowed down. COSMETICA INC has many loyal employees, while some departments and division are profitable, and the employees’ performance are excellent, other departments and division are average and some are below average.

Currently COSMETICA INC has gone through a major change and due to rapid expansion, the board of directors decided to make the company centralized and outsource some of the functions such as marketing, payroll, and Customer Service. Also, they decided to downsize many people in manufacturing and warehousing as they were replaced by new automation.

After outsourcing some of the functions, and downsizing about 100 people, the company employs about 290 individuals in spread across Canada the following departments: 12 in accounting and finance, 8 in information technology, mainly networking, 200 in manufacturing, 5 in human resources management and 6 in administration, 30 logistic and warehousing, and 25 in sales, across Canada. Even though they have 2 manufacturing and 2 warehousing locations across Canada, most employees are tenure and from same background as COSMETICA INC has traditionally promoted from within and occasionally recruits from outside the organization.

COSMETICA INC Inc has always been set up with bureaucratic Product structure and has been hierarchical with many management layers. There are many departments but only a few teams, mainly in IT, Quality Control and Finance. Lately due to outsourcing, downsizing and upcoming expansion there has been complains coming from employees and last year the company hired an outside consultant to conduct employee engagement survey and the result was ill-favored:

Based on the consultant finding; the moral overall was low, and employees were not happy about the changes. Organization climate is based on rules and formal process done solely by HQ in Vancouver. The culture is face pace, highly standardize and controlling and each department and division have their own subculture.

According to the consultant data; many departments and employees much communication is missing amongst executives and employees and most departments are working in silos.

Executives are the decision makers and the employees receive headline communication via e-mails. Very few managers and supervisors conduct team meetings, as everyone is quite busy.. Although the company cascades the goals each year to managers and it is mandatory that managers pass them on to individua employees the company strategy has been changed, a few times in the past two year due to growth.

The employees believe that there is power struggle amongst the CEO (head of the family), board members and other executives and due to this many senior managers. Many managers confess the use the politics to influence their boss and employees by upward appeals, legitimacy and pressure for their own gain. Due to standardization and formulization, managers tend to micromanage employees work and performance and as such lately there has been much turnover and lower lever performance.

Also, the technical expertise of some of current employees such as Administration staff, Human Resources and even some of the supervisors are not enough. COSMETICA INC is always on the lookout to offer the most sophisticated research and latest technologies to its R&D department, but there has not been any development of new products from this department for the last year. Also, much of their manufacturing and warehouse equipment are still out of date and have not been replaced. There is real concern to lose their long-term customers as within the industry the products have been Changning rapidly and it would place a constrain to the organization for next decade to remain competitive.

COSMETICA INC is planning to increase their sales within the next few months. Top management projects an increase of 10% within the next year, 20% within the next two years, and 30% in sales in the following three years. Sales within the last 3 years have increased consistently, from $10 million to $12 million to $15 million. But the profit percentage has been decreasing slightly over the past five years, from 10 percent to 7 percent.

The finance department has traditionally managed the capital structure of the firm but with the overseeing from the CFO (Brother of CEO). Currently the firm has a relatively small debt. Increasingly, however, the organization has been experiencing cash flow problems.

The human resources department was titled the personnel department until recently and its major function has been record keeping. The top position in the department is held by a former VP of sales that was moved laterally into a staff position in the department and then inherited the top position when the former job holder retired. The company has also been involved in violation of the employment law in termination and downsizing cases. 

The manufacturing department is the largest in the company. It has lacked cohesion and has experienced significant inefficiencies due management and operation techniques. The department has a rigid hierarchy and all managers and supervisors have been promoted within the department. Recently, threats of slowdowns have been heard from the manufacturing and warehousing workers due to automation.

Since the marketing department has been outsources the primarily role of marketing has been passed on to sales representatives and their managers. One manager has also had the responsibility for overseeing the advertising program in the company, and the advertising has been contracted to outside organizations.

The information systems department includes primarily network employee to make sure there is disruption to computers and network. But there is no management information system. The computer is primarily used for customer billings, payroll, and purchasing.

Step 2 – Answer the questions in Part I and Part II

Part I Questions

  • What are the issues that you see in COSMETICA INC Company? For full mark, y ou need to complete all issue including those that are not mentioned above which you think will be considered as issues based on your knowledge of course material.
  • What is the Motivational theory/s that is related and could help this organization employees? Why?
  • Based on Attribution Theory, how are the attitudes of employees being disturbed? Explain.
  • How does Affective events theory (AET) fits with this organization, their managers and employees? Explain.

Part II For following questions, you must refence the course/text to back up your recommendations

  • What are the source/s of “conflict” in this company? Why? What “Structural variable” of conflict should be changed in these conflicts and how?
  • What has/have created dependence for these employees from executives’ powers? How can Management create empowerment amongst employees and company overall?
  • Based on the above scenario what leadership theory/s would you think is the most suitable “Theory” for this company and why?
  • What would be your recommendation for COSMETICA INC Company to succeed in; communication, teams, structural variables in conflict, organizational structure, departments for future? Please provide and explanation and example for each.
  • What are the forces of change in this firm and what type of change approach and its steps do you suggest for this firm?
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