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Executive Summary

This is a case study analysis of Natural Beauty Shop that was started in 2013 by Maggie

Jackson who was producing beauty products in her kitchen. She started Natural beauty shop

in Sydney after a great appraisal of her beauty products from friends and family. Soon the

business expanded because of ethical consideration and high product quality. The company

has won best employer award and many other appreciations in that regard. The CEO of

company decided to open chain of stores in UK as well and to look after this overseas

operation she had to migrate. So to look after the operations of stores in Australia she hired a

new Managing Director (MD) through her trusted recruitment agencies. New MD Tony

Smith does not have any prior experience in beauty retail business but of accounting and

finance. This irrelevant experience of Tony has led to many issues in the organization that

resulted in high employee turnover and customers distrust for beauty products of Maggie’

company. This report is written as hired management consultant by Maggie after this all mess

in her company. For this purpose, first of all five main problems are identified including Lack

of managerial skills in Tony and his hired director of supply chain, lack of leadership,

employee motivation issues and unethical behaviour of Wallace Kindle who is the director of

supply chain department. Statements for these identified problems are described and in light

of these statements two root causes are proposed to solve. In this regard alternative solutions

are generated and analysed for resolving the issue of employee motivation and lack of

leadership behaviour of Tony. Recommendations are given to apply proposed solutions in

light of leadership and employee motivation theories.

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Contents
Executive Summary...................................................................................................................2
1. Problem Identification and Analysis...................................................................................4
1.1. Lack of Managerial Skills...........................................................................................4
1.2. Unethical Behaviour of MD and Director of Supply Chain........................................4
1.3. Lack of Leadership......................................................................................................5
1.4. Employee Motivation Issues.......................................................................................5
1.5. Workplace Culture.......................................................................................................5
2. Statements of Major Problems............................................................................................6
3. Generation and Evaluation of Alternative Solutions..........................................................6
3.1. Leadership...................................................................................................................6
3.1.1. Inspire a Shared Vision........................................................................................6
3.1.2. Encourage to Enter Open Minded People............................................................7
3.2. Employee Motivation..................................................................................................8
3.2.1. Reward and Recognition......................................................................................8
3.2.2. Professional Development and Career Growth....................................................9
4. Recommendations.............................................................................................................10
4.1. Transformational Leadership Style...........................................................................10
4.2. Goal Setting Theory..................................................................................................10
4.3. McClelland’s Theory of Needs.................................................................................11
Implementation........................................................................................................................12
References................................................................................................................................13

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 1. Problem Identification and Analysis

In the given situation of Natural Beauty Shop there are many problems caused after Maggie

Jackson going for overseas operations in UK. The main problems those are identified as

threating outcomes for company are;

1.1. Lack of Managerial Skills

The issue started from hiring process of Managing Director for company as Tony did not

have any prior experience of same product handling or even not of human management skills.

According to managerial skills he must have the human skills to deal with behaviour of

employees with who he has to work [ CITATION Rob151 \l 16393 ] . Additionally the director of

supply chain who is hired by Tony also does not have technical and conceptual skills because

he does not have prior experience of dealing with supply chain management. Further he lacks

conceptual skills because could not understand the company idea of serving poor

communities but he rather interrupted through financial figures like cost effectiveness.

1.2. Unethical Behaviour of MD and Director of Supply Chain

Purpose behind operating business of Natural Beauty products was to help poor communities

through working in a family like organizational environment where everyone knows each

other and also about their roles. This main purpose of Natural Beauty Shop is not just

neglected but also a negative behaviour by two new hires including MD and director of

supply chain has led to adverse outcomes. MD destroyed friendly working environment of

organization according to one of behavioural theory that Ohio state theory tells to manage the

role of each employee with consideration of pleasant working environment [ CITATION

Cen01 \l 16393 ]. So in light of this theory and core purpose of business behaviour of MD and

director of supply chain is not ethical as employees have also reported that they are not

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staying at office for full time but to go outside with expectation that other will do as they

asked them to do so.

1.3. Lack of Leadership

Lack of skills could be managed that was perceived by Maggie that Tony will deal with

things through his leadership style. So the major problem behind this situation and symptoms

is the lack of leadership behaviour, style and attitude of new MD. A leader is one who gives

example of his own action for his followers [ CITATION Rob151 \l 16393 ]. That was

unfortunately lacking in his throughout management style and leading style. This is the major

reason why employee turnover rate is increased and loyalty of employee is affected.

1.4. Employee Motivation Issues

Employee motivation is among the most important factor while designing their job or

assigning their duties [ CITATION Eri08 \l 16393 ]. There were different factors of motivation

considered by previous management of Natural Shop including the social benefit concerns as

most of the workers join company because of this motivational factor. Other important factor

was the working environment where everyone knows each other, respects each other

regardless of their designations. Third was the monetary benefit like sale bonuses and

unfortunately Tony eliminated all of these motivational tools from workplace.

1.5. Workplace Culture

A good workplace culture empowers their employees and values are shared from top to

bottom same as Natural Beauty Shop was following under the management of Maggie

[ CITATION Cri94 \l 16393 ] . This workplace culture is destroyed after Tony has taken the

control to monitor and execute all operations under his direction. Now values are shared

among upper management and that also does not include all members of management but a

few.

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2. Statements of Major Problems

A single statement of this case study describes all issues in organization and how it is

effecting the operations, and employees. “The teams at the head office often commented how

rude Tony was and he spent all of his time either in his office supposedly “crunching

numbers” or out for lunch or drinks with Wallace.” So in light of this statement two major

problems are identified to be solved immediately including;

 Lack of leadership

 Issue of Employee motivation

These two are interlinked as a leader influence the behaviour of their followers by identifying

the factors of motivation those will work appropriately [ CITATION Rob151 \l 16393 ]. This is

the leadership lacking attitude of Tony that he used to be authoritative instead of being

autocratic to listen the existing line management to implement his own strategies. A leader

never goes against the actual purpose of organization that is neglected by that is found as an

unethical behaviour. This authoritative behaviour of MD and director of supply chain has

discouraged employees to put their best. Most importantly the main factor to encourage their

performance was sale bonuses those are eliminated so these all things are resulted in

motivational issues.

3. Generation and Evaluation of Alternative Solutions

3.1. Leadership

3.1.1. Inspire a Shared Vision

Shared vision is helping your team to understand what your vision is and why you come to

make that as your vision and how this vision relates to their welfare [ CITATION Kou09 \l

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16393 ]. Current behaviour of Tony has created distrust among employees and management

and for this reason Maggie needs to re-image Natural Beauty shop as the best employer. As

the turnover ratio is 60% so almost of the staff of company is new that needs to be led with

approach of deeply connected with you as previously Maggie had adopted an approach. For

this reason there is a need to listen employees’ complains, meet their hopes towards pervious

management and fulfil their work-related needs.

Advantages

 It will build a positive workplace culture

 It will build a sense of ownership

 Shared vision will increase employee motivation

 When employees will feel ownership then their involvement in their duty will be high

and also it will increase sense of responsibility

Disadvantages

 It can lose the control power of immediate manager

 It does not meet the need of contingent approach to deal with urgent issues

3.1.2. Encourage to Enter Open Minded People

Already Natural Beauty shop had an open minded people approach to run business where

people take care of poor communities and each other who with they were working. This

approach needs to be introduced and for this purpose open minded people should be

promoted to management level. Tony did work in a conservative way so there must be

counselling for him to find that he can be part of friendly working family of Natural Beauty

Shop with an open mind or not.

Advantages

 They are always ready to learn new things and able to deal with sudden issues

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  other employees are inspired of these people approach at work like how they

participate in learning process

 They help to create positive work environment

 They are flexible workers and managers who help to resolve routine issues or

problems at workplace

Disadvantages

 Create conflict between open-minded and conservative employees

 other may see flexibility of an open-minded manager as his weakness

3.2. Employee Motivation

3.2.1. Reward and Recognition

Employees must be encouraged on their good performance that will not only increase that

moral of that particular employee but of all staff. For this purpose there is need to set goals

that builds a standard to recognize employee efforts and reward them on high performance

[ CITATION Lun11 \l 16393 ]. There must be goals for each individual that will help to reduce

the communication gap and empowers an employee to directly report his performance and or

any hurdles in his department to perform his duty. This must not be limited to sales force but

for all departments.

Advantages

 Builds good organizational culture with fusion of individual and collective approach

 Individual Goal setting will provide high performance of each member

 This will result in efficiency and effectiveness of work as Tony claimed to achieve

through cost effective strategy

 High employee satisfaction

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Disadvantages

 Reward system is always incurs extra cost

 recognition of only one employee’ work at workplace may lead to discouraging for

another employee

 unrealistic targets or individual goals for awarding or recognizing employee’

performance can also lead to discouragement instead of motivation

3.2.2. Professional Development and Career Growth

This will help to build log-term relationship with employees to retain them for long-term that

will not only reduce the turnover cost but also recruitment cost for hiring frequently new

staff. For this purpose Natural Beauty Shop was already providing career development

opportunities as well trainings for professional learning. Eliminating these trainings and

workshop did not lead to cost reduction but to an increase in cost in terms of employee turn-

over. After facing issues of turnover and employee distrust there is need to reposition the

phenomenon of professional and career development. Mentoring and couching needs to be

provided for dissatisfied employees and provide trainings for learning relevant professional

skills to retain their job for long-term [ CITATION Noe14 \l 16393 ] . This will play a role of

motivation for employees to see their job as career oriented opportunity.

Advantages

 It increases the employee motivation level towards their job

 It increases the job satisfaction level of employee as well

 It attracts best talent of industry

 It helps in succession planning

 Increase the level of performance that contributes to organizational goal attainment

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Disadvantages

 Loss of money and efforts in case employees leave

 It cannot satisfied all employees need

 It may not provide the expected outcomes in terms of skills and abilities to perform

job

4. Recommendations

4.1. Transformational Leadership Style

Transformational Leadership style focuses to share vision of organization with employees,

challenges harmful or dissatisfactory practices and enables other to put their best efforts in

their own way [CITATION Imp13 \l 16393 ] . This is the requirement of current situation of

Natural Beauty Shop where employees are discouraged because of an authoritative

management of MD and supply chain director. To implement the solution of leadership issues

in company through transformational leadership style there are two ways first is to dismiss

Tony as he could not manage operations with the vision of company. Secondly consultancy

can be provided to Tony to find that either he can be trained to become a transformational

leader of company.

4.2. Goal Setting Theory

To implement the solution of reward and recognition for employees it is recommended to

follow goal setting theory that tells to set individual goals for employees to get rewards and

recognitions for their performance [ CITATION Lun11 \l 16393 ]. Collaborate individual goal

with organizational goal that how one has contributed in overall goal attainment of business.

These measurements will boost employee moral to put more efforts with more dedication.

Goals can be for sales department regarding sales, HRM department to manage the training

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and other HR activities align and so on all departments should be included in this solution

practice to resolve the issue.

4.3. McClelland’s Theory of Needs

This need theory helps to identify the level of need of employees that needs to be fulfilled in

terms of motivating them to put their best in organizational goal achievement [ CITATION

Rob151 \l 16393 ]. Implementation of solution of professional and career development

program for the issue of employee motivation it is required to identify that both career and

professional development is that unmet need of employees that’s fulfilment can lead to job

satisfaction and motivation. There was another issue created by Tony that was eliminating

bonuses for sale efforts of sale staff so there is need to identify each level of employees in

organization. Fulfil the need of each employee that is the main reason behind their job as

most of the workers want self-satisfaction to work with an organization that is helping poor

communities.

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Implementation

Recommendatio Who What When How Cost

n
Transformational Maggie Inspires Need for Need to Opportunity
Leadership Jackson with developing arrange a cost will
Theory Shared and meeting of incurred
Vision implementing middle and
Challenges the strategies line
practices management
of Tony to discuss
Encourage about issues
her staff to and
work for proposed
poor solutions to
community take
well-being employees
feedback
Goal Setting Line To set a On daily, High Cost of
Theory Manager i.e. job related weekly and performance reward that
Sales goals i.e. monthly must be can be a
manager, selling a basis. appreciated bonus, a gift
HR manager specific through or
number of recognition appreciation
products in and rewards letter
a day or
week,
McClelland’s Managers of Fulfil the Employee Offering Cost in
Theory of Needs all needs of counselling sales terms of
management employees to know their commission bonuses and
level those are required need or bonuses, cost of
unmet to be met career training
development development

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References
Choudhary , A. I., Akhtar , S. A., & Zaheer, A. (2013). Impact of Transformational and
Servant Leadership on Organizational Performance: A Comparative Analysis.
Journal of Business Ethics, 116(1), 433-440.
Dinh, J. E., Lord, R. G., Gardner, W. L., Meuser, J. D., Liden, R. C., & Hu, J. (2014).
Leadership theory and research in the new millennium: Current theoretical trends and
changing perspectives. (J. S. B. A. Peters, Ed.) The Leadership Quarterly, 36-62.
Kouzes , J. M., & Posner, B. (2009). To Lead, Create a Shared Vision. Harvard Business
Review, 3.
Lăzăroiu, G. (2015). Employee Motivation and Job Performance. Linguistic and
Philosophical Investigations, 97-102.
Lunenburg, F. C. (2011). Goal-Setting Theory of Motivation . International Journal of
Management, Business and Administration , 6.
Noe, R. A., Wilk, S. L., Mullen, E. J., & Wanek, J. E. (2014). Employee Development: Issues
in Construct Definition and Investigation ofAntecedents. In Improving Training
Effectiveness in WorkOrganizations (pp. 153-189). NJ: Psychology Press.
Robbins, S. P. (2015). Management. Melbourne : Pearson Australi.
Schneider, B., Ehrhart, G, M., & Macey, W. H. (2013, December ). Organizational climate
and culture. Annual review of psychology, 361-388.

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