Leading Change at Simmons (B) Harvard Case Solution & Analysis

Introduction

The company was established in late 80’s by an entrepreneur named Salmon Gilbert Simmons whose main focus was to run a family owned business in the long-run. The company had started its journey from the first national bank of Kenosha as an investor then moved into dairy farming industry and with their manufacturing expertise they built wooden boxes to export their dairy products. After entering into the manufacturing business, the company had decided to produce woven wire mattresses with a wooden frame. This idea had contributed great profits to Simmons.  In the 90’s, the company had shown great success and had established a global firm with factories in Mexico City, London, and Paris, which was an exceptional case for a new company to expand in such a short time. During 1970, the company had to diminish its family succession and hired CEO out of their family. Now the company is considering picking an experienced professional who can facilitate the company with his specialized skills to face challenges and harvest alternatives to resolve problems. Charlie Eitel was hired as the CEO of Simmons; he planned to headquarter Simmons in Atlanta. In addition, Simmons has 18 bedding manufacturing facilities that make mattresses across the U.S.

Problem statement

Simmons is a renowned company in the manufacturing sector regarding wooden cases and mattresses distributions. The company is currently facing the economic downturn due to the lack of communication between its employees and low-quality organizational structure. Inter-organization competition was making the organizational structure more complex which in turn has served to the non-unified visionary values of the company. The management was highly concerned about the challenge of bringing large-scale organizational change at Simmons. One of the alternative identified by the CEO was to change the organizational performance through an innovative training and development program that consisted of experimental team-building activities practiced outside the company, team building is considered as a focal point of change strategy. A point of concern for the company is to take the initiative of an investment of $ 7.2 million on an unconventional employee training program. However, the change is essential because due to the disturbed organizational structure and low quality of production the company has lost its three large customers that have a negative impact on the profitability of the company.

Company analysis

Simmons is facing some serious issues which are the major factors contributing to the demise of Simmons. In order to overcome this problem, Charlie Eitel newly hired CEO of Simmons; possess a lot of plans to bring the performance of the company on track. CEO was of the opinion that the company is struggling towards its survival, and he needs to reconcile the scattered parts to get the accumulated contribution of all business units. The company has faced some serious downfall after the event of 9/11. Furthermore to 9/11’s reaction, the company is also facing with the problem of product recall from the supplier because there is a sudden rotten smell coming out from the mattresses. The bad response from the customer and depressed economic conditions are quite harmful and attention-grabbing issues, but the new CEO was highly motivated to take initiatives to facilitate these problems.

By analyzing the existing position of the company, the CEO has figured out that there is a large communication gap among various business units of the company. This co-ordination gap has divided the production quality of the firm and resulted into the cultural barriers observed at certain plants.

One other distressing problem faced by the company was the competition among different business units of the company. This was an alarming situation that 18 plants were running their business units separately and were negatively competing with each other by breeding a rivalry among them. However, other business units were experiencing group thinking issues because of the cultural differences amongst workers. The situation became so much intensified because most of the employees did not socialize with other employees due to the language barriers.

Eitel the new CEO took steps to ensure clear identification of the problem and attempted to endorse a solution. Initiatives suggested by the CEO are, to enhance the productivity of the firm by giving greater attention on the training and development of the operational staff.......................

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by Tiziana Casciaro, Amy C. Edmondson, Stacy McManus, Kate Roloff Source: Harvard Business School 13 pages. Publication Date: November 4, 2005. Prod. #: 406047-PDF-ENG

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