Assignment 2

Case Study

Outdoors

DECEMBER 16

BUSM4185 - Introduction to Management

ITM_HN_G03
Authored by: Le Duc Anh _ s3925952

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Introduction
The target of this case study is the “Outdoors” chain store, which sells a wide range of top-
notch sports equipment. Ms. Ngoc, the owner and the winner of several popular races in
Vietnam, opened the first store in her hometown of Da Nang in 2015, and not long after that,
the news of her store opening has spread swiftly in the Central Vietnam running community.
Two years later, she expanded her business by opening a new and larger branch in Ho Chi
Minh City. However, in recent years, she has been consistently dealing with staffing problems
on the whole and a high rate of workforce turnover in particular. “Outdoors” is of the small
business model as they have only two branches and the number of employees is around
twenty. Though small businesses tend to have fewer human resources compared to the
larger ones, this is the exact reason why it is so extremely valuable if the company can
maintain an environment where it can succeed(Grace 2004). This case study aims to point
out the problems that the business is facing, why they happen in the first place, and what
should be implemented to overcome the ordeal.

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Case Analysis
In recent decades, many arguments have suggested a strong correlation between human
capital attributes – including education, experience, knowledge, and skill - and success in
entrepreneurial firms(M et al. 2011). Human capital helps enhance the owner’s capabilities of
discovering and exploiting any business opportunities to maximize profitability and
productivity. Thus, the ability to understand the expectations of the workforce is imperative for
the organization to achieve its desired outcomes(Luftim 2014). The case of the “Outdoors”
chain store shows two main issues regarding the managing capability of the owner in dealing
with her workload and employees.

No Division of Labor
There is the tacit omnipotent view on management that the manager has total control over
the organization’s missions and actions. Therefore, he or she is individually responsible for
the performance of the organization. In this case, Ms. Ngoc, the owner of “Outdoors” is the
exact epitome of this thesis. She assumed full responsibility for all organizational roles in the
business from planning, controlling, and decision-making to direct supervising. Every week,
she had to travel between Da Nang and Ho Chi Minh City to oversee the branches’ activities
and cover any blank shifts left by her employees. Additionally, accounting, marketing efforts,
and supply chain management are all taken care of by herself. This has affected not only her
business (lack of time to further develop the business) but also her daily life: fewer
opportunities for social participation and likely deterioration in health.

Distrust among organization levels

Trust is one of the most necessary components that constitute organizational success.
Several types of research have shown that organizations that have a trusting relationship
between top management and employees are thought to have a lower rate of employee
turnover than (H et al. 2000). In the “Outdoors” case, the owner shows little to no trust at all
towards her employees. She can not count on the employees in any obligations and have to
meticulously approve every decision in fear of them making mistakes. As a result, the
employees are likely to feel that she does not want to rely on or expect anything from them,
that they do not belong here as an organization but as an individual. At this point, high
employee dissatisfaction and lack of room to thrive have led them to decide to quit jobs and
go looking out for better opportunities.

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Recommended solutions
Taylorism
In an organization, a manager is the one who set goals, plan, control the activities and
motivate human resources to archive the firm’s goal(Tovmasyan 2017). In the management
process, managers have many different roles from top managers who do the planning and
make organization-wide decisions to front-line managers who manage the work of employees
and involve in their process. The owner, Ms. Ngoc, should consider applying The Scientific
Management theory, also known as Taylorism, into the organization’s structure. This
management theory is advocated by Frederick W.Taylor (1856-1915) in his book “Principles
of Scientific Management” (1911). He stated that work should be divided into its smallest
possible skill elements and separated between planning and doing or direct and indirect. For
instance, in the “Outdoors” case, the Ho Chi Minh City branch should have one reliable
manager who does the job of supervising the employee and reporting the activities to the
owner weekly so she can reduce the times of flying back and forth between Da Nang and
there. For tasks such as accounting or supply chain managing, she could build around two
teams to specifically deal with them. She can either train the existing employees to undertake
those tasks or hire people who have the skills or experiences required.

Empowerment
Still, there is the remaining issue of trust across multiple organizational levels in the
“Outdoors” business. When a manager is more trusted, employees are likely to believe that
their contributions to the organization will be recognized and rewarded in some way(H et al.
2000). That is why nowadays, many businesses have adopted the management philosophy
called Empowerment or employee engagement. Employee empowerment is giving the
people authority, opportunity, or motivation to contribute more to the business(Abraham &
Meni 1999). It gives way to shared leadership, more member participation in decision-
making, and thus fosters job satisfaction, organizational commitment, and high
productivity(Perkins & Zimmerman 1995). In the “Outdoors” case, the owner can enact
empowerment in many different ways. She can offer the employees more flexible work hours
after discussing with them or increase their morale by implementing a rewarding system.
Also, encouraging the employees to voice their concerns or asking them for ideas on how to
improve the business further such as marketing proposals are highly appreciated.

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Recommended Strategies
Human Resources
Though developing a thorough organizational level structure can help increase productivity
and relief some stress from the owner, it can not be achieved if the employees do not have
the skills needed or enthusiasm to undertake the roles. The owner can exploit the fact that
she is an avid member of a running club and winner of several popular races in Vietnam to
look for people in the running community who share her passion for outdoor activities and
want a reliable source to buy high-quality outdoor sports articles. These stakeholders may be
a reliable force to help her further promote the store’s products throughout the community,
give her valuable advice and feedback on the products or even find her business interesting
and decide to invest in or take part in the organization as an employee or co-manager. As a
result, she can recruit more reliable employees who understand the business and the
customer well and have great dedication in the job.

Performance-based compensation system

After finding the right people for the right job, it is crucial to find a way to make them stay in
the organization in a long term. To achieve that, the owner should implement a rewarding
system based on performance to motivate and encourage the employees to strive for
improvement. Several studies point out that high-performing individuals are likely to stay in an
organization that offers performance-based compensation than those who do not(F et al.
2018). Gerhart and Fang (2014) classify pay-for-performance into dimensions of pay
including behavior-oriented, in which the behaviors of the employee are rated by not only
supervisors but also his or her peers and the customers' feedbacks. Applying this system into
the store’s structure will greatly increase performance and transparency between employees.

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Conclusion
Through the “Outdoors” case, I had identified several issues lied in the management structure
and human relation between different organizational levels that led to strong workforce
turnover and low productivity. Some solutions were suggested such as maximizing job
fragmentation through division of labor and applying empowerment theory in the managing
process to enhance individual and organization’s performance. I had also provided specific
strategies to accomplish the proposed solutions regarding recruiting competent employees
and performance management through compensation. Though there is much to improve, I
hope that this case study is able to contribute to the effort of solving similar organizational
problems presented in small businesses.

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Reference
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Barry, G & Meiyu, F 2014, “Pay for (individual) performance: Issues, claims, evidence
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Grace, D 2004, “Quality from scratch: A model for small business,”, vol. 37, no. 7, p.
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H, D, James, David, S, F, C, M, Roger & Hoon, T, Hwee 2000, “The trusted general
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Perkins, DD & Zimmerman, MA 1995, “Empowerment theory, research, and

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