Management Final Paper

Hove Apparel Company

Faculty of Economics
Universitas Indonesia
2014
Aziza Nabila Amani 1206242063
Ghea Lestarina 1206252410
Jaysa Rafi Prana 1206265754
Agustha Lumban Tobing 1206219035
A. Introduction

All generations, regardless of age, have their own unique cultural
tendencies, shaped by the socio-cultural climate in which they belong. One of the
most obvious manifestations of these tendencies can be seen in the realm of
fashion. For the generation currently in their young adulthood, fashion plays quite
a substantial role in displaying that generations difference with others; this fact,
combined with a surge of newly minted affluent middle class in Indonesia, an
almost dizzying array of new fashion and apparel start-up companies are
appearing faster than previously seen in Indonesia to satisfy the aforementioned
new consumers.
For the purposes of investigating one of these start up companies, we
interviewed Hoves dedicated staff and managers, all of which are students of
Prasetya Mulya private university located in BSD City. Hove is an Indonesian
fashion and apparel brand, made as a start-up of seventeen young entrepreneurs,
and was only very recently established in November 2013. Hove was created
because these young innovators have the simple belief that consumers needed bags
that fulfilled the obvious function of simply carrying their belongings say, during
commute- but is at the same time sufficiently fashionable to bring everywhere.
With this purpose in mind, they created an originally designed rucksack bag with a
small removable pocket attached on the front, hand-made using U.S-imported
sunbrella cloth and genuine leather. You Are Commuters is their advertising
slogan and with this they wanted to create a mind-set in customers that commuters
are indeed in need of an functional but trendy bag.

Figure 1. Hove bag with removable pocket
B. Planning
In this section, we will examine as thoroughly as possible Hoves broad
organizational plan. For Hove, planning includes: defining the organizations
goals, establishing strategies for achieving those goals, and developing plans to
integrate and coordinate work activities. As a start, we will mention Hoves
visions and missions.

Visions:
1. To become an innovative bag company which is able to influence and
change people's lifestyle to be more developed, effective, and efficient,
2. To monopolize the potential market and be a sustainable market leader in
[the] bag industry,
3. To make customers value practicality and efficiency as well as to establish
customers' individualism trait creativity has no limits.
Missions:
1. To always develop clear product features and give advantages to the
customers in every productions,
2. To always give easy access for customers using the removable pockets
and appreciate the creativity of the customers by also offering the make
your own bag feature,
3. To give consistent premium-level product quality and product durability
and to give a distinctive benefit segmentation as the brands unique
signature
Moreover, Hove has a Six Guideline Principles which are symbolized by their
hexagon shaped logo.









These six principle guidelines are always considered every time they make
products, and the meanings are:
1. Versatile: every product that they create has flexibility in usage,
2. Functionality: every product has high functionality and delivers the
function demanded by customers,
3. Endurance: every product has high durability especially when customers
use it over time,
4. Aesthetics: every product has unique and attractive designs,
5. Simplicity: the products are simple and not confusing to use,
6. Community involvement: shows Hoves commitment to the environment
Versatile
Endurance
Aesthetics
Community Involvement
Simplicity
Functionality
There are two types of goals: stated and real. The visions and missions
explained above are Hoves stated goals, while the real goal of Hove itself can be
inferred as the creation of goods, especially bags, which can be easily used for
people who often commute. Plans may be analyzed from four aspects: breadth,
time frame, specificity, and frequency of use. In the breadth aspect, Hoves
strategic plan is indeed to create high-quality bags especially made to those who
commute a lot by creating the removable pockets. As for the operational plans,
each department has their own specific plans, in marketing for example; they have
their own plans created just to make campaigns. Hove has many short-term plans,
yet they were indisposed to tell us their long-term plans due to confidentiality, but
this tells us that they certainly have their long-term plans. Directional plans are
often implemented when the upper level managers have something specific to be
requested to their subordinates.
As for the corporate strategy, we can infer that Hove wants to produce
high-quality products, but as a consequence, this results in high prices as well.
Below is Hoves strategy (in quadrants) to compete with their strongest
competitors:

Figure 2. Hoves position among its competitors
In short, Hove maintains its idealism by enhancing more of their products
function by using high-quality material even though this means they need to
sell the products with high price. Compared with their competitors, Hove can
be seen from the graph to be the company that is closest to the middle,
meaning that they are the most willing to balance their objectives of
functionality and fashionability while only being slightly more expensive than
the majority of their competitors.

C. Organizing
Organizing is one of the most important parts of managing a business
entity. In order for a business to be able to develop and sustain that development, a
business must organize its entity in a way that suits its condition with regards to its
own characteristics, its consumers, and other stakeholders that might affect its
business. Therefore, to start our analysis on the companys strategy in organizing
its business we can see the chart organization below.

Figure 3. Hoves Organizational Structure
As a small entity that is just starting to promote its own brand, Hove still
has a slim organizational span in terms of hierarchy and small number of people
each chief observes. Hove has also already implemented a very distinct job
CEO
COO
Vendor and
Supplier
Relation
Vendor and
Supplier
Relation
Product Design
Development
Data
Information
and Inventory
CMO
Design and
Advertising
Concept
Sales
Research and
Development
Public and
Brand Relation
CHRO
Arrangement
and Planning
Program
Arrangement
and Evaluating
Program
CFO
Finance staff
Finance Staff
function for each and every one of its workers seen from the unique job
description each person has according to their specialty, in correspondence with
their respective department. Furthermore, based on the interview we had with one
of Hoves marketing staff, we also inferred that Hove has a clear chain of
command with low formalization of its standard of procedures for the workers to
follow, a centralized but still democratic decision making process on its head of
departments and CEO, and free flow of information. Although it seems like Hove
has both the characteristics of mechanistic and organic type of organization, we
conclude that Hove style of organization is more like organic organization due to
two main characteristic which are its informal standard procedures and its free
flow of information.
Because all its workers are still students in university, Hove is facing a
challenge of how they should, or could, manage their business concurrent with
their other, individual, priorities those are not less important than the business
itself. They try to overcome this obstacle by arranging a weekly meeting that is
held in every department as well as once-in-two-weeks plenary meeting to
evaluate the achievement with goals they have set. The free flow of information
described above between Hove staff and managers is rather easily maintained by
their use of a perpetual group chat in a social media application on their respective
smart-phones. In short, Hove has so far applied a very flexible work arrangement
for its workers to follow as long as they meet their targets in a timely manner.
Clearly, each department within the Hove organizational framework has
their distinct function in the company, although of course some of the specific
tasks might either overlap or at least needs to be done by more than one
department working in tandem. The operating department is the department
responsible for the production of its merchandise from the very start until the end
of the production process, from designing the products, finding the supplier of its
raw materials, making sure any other intermediary did their contractually obliged
work, as well as insuring that all the inventory is properly traced and stored. Each
one of the staff in this department has their own responsibility pertaining to the
four activities mentioned above.
The marketing department has four staff members that also have different
responsibilities in doing the marketing activity. The person in charge for design
and advertising concept is responsible for making the design of its posters, store
layout, making various types of advertisements such as short commercials and
broadcast messages, as well as making its brand logo along with an outsourced
party. The salesperson is who is in charge of distributing its product to consumers
by looking for an event to sell its products or dealing with resellers that can be a
channel in which Hoves merchandise can be marketed. The research and
development staff is in charge in determining to whom they want to sell the
product. Lastly, the public and brand relation is responsible to get the
advertisement effectively distributed and increase the brand awareness among its
target consumers.

Figure 4. One of Hoves posters made by the Marketing department
The process of recruiting workers was done in the beginning by the CEO,
CFO, CHRO, COO, and CMO through two phases of selection that consists of:
CV and background screening, and a face to face interview. When we asked what
were the consideration of choosing the right team to work together, she said that
personal capabilities in terms of how well someone does his/her job and how well
he/she can work in that specific environment of the leaders characteristic are the
two most important factors considered. She also stated that the company tries its
best to maintain a close relationship between workers although of its common goal
of gaining profit from the business. Furthermore, the department of human
resource is mainly made for three main things which are arranging meetings,
evaluating programs that have already been done, and ensuring the cohesiveness
of the team is sustained.
Training, benefits, and optimization of workers ability are also three foci
that are important in the process of organizing. Training is needed to increase the
skills, and thus productivity, that the workers have so that they can more efficcient
in doing their task, benefits are great source of extra motivation so that the
organizational goals can be achieved, and optimization of workers ability is
needed to make the working condition comfortable as well as increasing the firms
productivity.
Hove company does not have any general training given to its workers.
However, each department has their own method of acquiring new knowledge.
One example is the weekly meeting marketing department holds to train its
member how to design a poster or advertisement as well as a training in making
marketing calls back during the foundation of Hove to teach all the staffs the
proper manner of contacting clients. Benefits that the firm gives for the employees
are in the form of commission of every bag sold in a particular program other than
when the company is selling its product in an event or in-store sales. About
optimizing the workers ability, Hove said that the strategy CEO implements is a
personal approach and laid back working situation complemented with distinctive
goal in a specific time length. This approach is believed to fit very well in the
environment of students who are actually close acquaintances with one another to
evade problems arising from an overly professional relationship.

D. Leadership
As a small start up company of seventeen young entrepreneurs, Hove has
chosen a relaxed working environment for their company. According to Hana, a
staff, the chiefs in Hove are very democratic in terms of their leadership style. This
particular leadership style, involving subordinates, delegating authority, and
encouraging participation, is seen as the most suitable way to enhance the creative
environment needed to run a fashion brand like Hove. The CEO encourages the
chiefs to be considerate of all the ideas developed by subordinates. Usually in their
weekly meeting all chiefs and subordinates are given the chance to speak up their
mind. Over all, Hove is very relationship-oriented as they feel like a friendly
environment that emphasizes on interpersonal relationship will not hamper their
productivity as a company, but would more likely gives the comfort that the
employee needs to work effectively.
A relationship-oriented leadership style is more likely to give good
outcomes given that the subordinates in Hove has a high degree of trust and
confidence for their chief even though they are the same age and are all similarly
inexperienced in the business field. Trust and confidence come easily given that
they have known each other since before the company was established. Moreover,
job assignments in Hove are not very formally structured. In addition, the degree
of influence the leaders have on their subordinates is relatively low. They are well
aware that they are all going through a learning process together and therefore
more reliant on each other on making decisions. Given the three condition about
the leader-member relation, task structure, and position power, considering that
their business are going through moderate situation most of the time, they are right
to choose a relationship-oriented leadership style, according to the contingency
theory in the Fiedler Model.

Figure 5. Hoves apparels being sold at Pop Up Market Shibuya
The chiefs in Hove can be categorized as participative leaders as they are
more than willing to listen to the ideas of the subordinates, they even encourage
them to be more participative in the decision making process. Since the
subordinates are business students with relatively the same experience and
knowledge with the chiefs, it can be inferred that the subordinates have an internal
locus of control. With this in mind, a participative leadership style that the chiefs
of Hove are implementing will give more satisfaction to the subordinate, as they
are more aware of their contribution in the company.
With low task structure, relationship-oriented leadership style, and relaxed
working environment, leaders of Hove maintain the productivity of their
subordinates by increasing the sense of belonging that the subordinates have for
the company. To achieve this, the CEO conducted a lot of activities to bring them
closer together, show appreciation for subordinate who has done a good job, and
develop personal relationship to each of the subordinates. By making the
subordinates feel that they are an important part of the company, the CEO believes
that they will be more motivated to work productively.

E. Controlling
Because Hove has only been in operation very recently, their history of
organizational control as of yet is not extensive enough for us to see clear patterns
in how Hoves managers, whether the CEO or his managing subordinates,
monitor, compare and correct the work performance of their subordinates. But,
there have been some hints on how closely related are Hoves approach to
organizing and leading with their approach to controlling work performance.
During the operation and marketing stage of the business, Hoves manager
control quality of work with standard, non-quantitative measurement techniques.
They would personally inspect the quality of the merchandise and how the
marketing department handles their area of operations. The verdict of whether or
not the work of their subordinate is satisfactory is done through democratic
deliberation with the help of the human resources department in giving extensive
evaluations of their peers.
When it comes to sales, they rely on a more quantitative approach, most
obviously by the number of sales they make in-store sales or during specific
events. Again, because of their very recent history, the comparisons used for
control are scant. It would not be very useful to compare sales during different
specific events as the sales would fluctuate highly during each one, thus the sales
of competing companies are the more often used tools for comparison. Because
the managers of Hove are more inclined to develop and sustain the relationship
between its staff, personal consideration is given to each employee if action needs
to be taken by the managers to ensure that the productivity of their employees do
not slacken.
With the advantage of a rather short and slim organizational structure,
combined with the fact that the whole organizations have close personal relations
outside of the company, Hoves managers are able to employ all three temporal
types of controlling tools, namely: feedforward, concurrent, and feedback controls.
As a form of feedforward control, Hoves managers try to predict and anticipate
problems so as to minimize the chances of obtaining unplanned costs, especially
during sales events that do not regularly occur. Given the small size of the
company, the management by walking around technique can still be done without
much difficulty by its managers so as to be able to fine tune any unanticipated
problems that might occur during the course of its operations. Finally, during their
regular meeting, Hoves manager use the feedback type of control through an open
discussion of all its staff members to continually perfect their business

F. Summary
Hove is a start-up apparel company founded by college entrepreneurs.
Although it has only been in operations very recently, their organizational
approach to planning is rigorous and long-term oriented. Their organizational
structure is meticulously designed to suit the specific skills of each staff member.
Their managers approach to leading is democratic and rather informal but still
hierarchical and can be stern if need be. In line with their other managerial
characteristics, Hoves approach to controlling is laid-back but authoritative.