Sunflower Inc.

Topics: Management, Vice President of the United States, Region Pages: 6 (1751 words) Published: March 10, 2013
Sunflower Incorporated
OD Case Analysis

Case Summary
Sunflower is a big distribution company with over 5000 employees and gross sales of over $700M. The company distributes salty snacks and beverages to retail stores in Canada and the United States. It also packages some items under private labels. Each region is managed independently with its warehouse, salespeople, finance department, and purchasing department. The company is characterized by emphasis on being fast and flexible in responding to the environment. The company understands that different regions would exhibit differences in tastes and practices, and accordingly autonomy is a key feature of region management. The company established a financial reporting system and identified deviation is profits from one region to another as a problem that needs intervention. Problems, Causes, and Management Response

Problems from Sunflower Management Perspective
There is a variation in profits across regions. This was considered the main problem from the management perspective High profits in some regions are due to using lower-quality material to reduce costs and increase profit margin. Inconsistency in quality may harm the corporate image. Low profits in some regions are due to fierce price competitions National competition over market share was focused on competitors cutting prices and launching new products. Discrepancy in pricing and purchasing practices in different regions is a problem that necessitates standardization to avoid the variation in profits across regions. Problem Cause from Sunflower Management Perspective

The management considered the direct cause of profit difference to be price difference, for both forward and backward markets. Management Response
The management decided that change is to be made in price of Sunflower products (forward market prices) and purchasing practices (backward market prices). Hence they hired Agnes Albanese who got all support and authorities from top management to improve their pricing and purchasing. Problems with Management Response

No detailed diagnosis was made for the corporate at the organization or at the group level. The creation of the Director of Pricing and Purchasing position seems to be a unilateral decision from the Sunflower president. Communication of new position, Director of Pricing and Purchasing, was made inefficiently. An official memo to regional managers would be seen as an enforced authority without elaboration on the reasons behind it and without justification of the scope of responsibility. No consideration was paid to the regional executive autonomy, which may impact their willingness to cooperate with changes that would undermine their authorities. The centralization of decision making might be seen as a violation to the autonomous core practices of regions. Agnes Albanese’s (OD) Solution and Performance

Since Sunflower is trying to attain performance enhancement by assigning the Director of Pricing and Purchasing great latitude in organizing the job and establishing rules and procedures, we will refer to the position holder as “the OD” (organization development practitioner). The role of this OD was to effect a planned change that should solve the real problem of the organization. OD Solution

The OD’s solution to the problem was to change the policy to centralized control of pricing and purchasing practices by the home office. The decision was communicated by e-mail to all regions. The OD pushed to implement this new policy immediately, hoping that the change would benefit the company during the upcoming peak sale season. However, her methodology did not impact current pricing and purchasing practices. Even after agreeing to the change program by e-mail, not a single regional executive attempted to implement it (not notices about local price or purchase change were sent). OD performance Evaluation

OD plan and strategy failed because of lack of adequate analysis, absence of...
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