From the observations of XYZ Widget Company, it's evident that the company faces a diplomatic crisis that requires resolute organizational development strategies. Dr. MIN BASADUR acknowledges that rapid acceleration and changes are causing many companies to find themselves in adaptability and commitment crisis that requires bureaucratic and organizational development measures. Companies that adopt stringent OD measures find it easier to adapt efficiency and adaptability depending on the current status ("Cross'Level Mediating Effect of Psychological Capital on the Organizational Innovation Climate'Employee Innovative Behavior Relationship," 2015). XYZ Widget Company management seems to have no clue on what's causing the decrease in sales. As the organizational development consultants, here are the major flaws within the company's organizational structure that hinders sales.
Reasons for Decrease in Sales
The organization lacks the interdisciplinary behavioral science to accept fundamental changes in the market industry. The company seems to maintain traditional strategies and reluctant to heed the rapid changes in the market industry. Secondly, the company fails to counter-attack the competitor's strategies that cause consumers to purchase from competitors. The competitor lowered the prices of the same commodity. XYZ Widget Company is also rigid, where they demonstrate resistance to behavior and management of the business organization. The CEO is also reluctant to lower the prices and instead implements drastic measures such as laying off employees, eliminating bonuses, and commissions for employees who don't meet a particular sales target. Such a move decreases the employee's morale and motivation. Denying the employees incentives that increase morales will only discourage the employees from dedicating more energy towards the company objectives. The data indicates that the company has lost a total of $3 in two years. As far as the company is no longer the dominant company, competitor availing the same widget at a lower cost causes the customer shift. XYZ Company maintains the production of high-quality widgets, which means the cost of production remains high. Maintaining high-quality products and lowering prices pose a considerable challenge.
Coming back to the drawing board is that the company needs to accept that it requires behavioral changes, draw observations from the market, adjust management and administration strategies, and also reassess the business objectives depending on the current market status. To maintain customer loyalty, the company also needs to maintain high-quality production. To achieve the goal, the company requires to assess the cost of production and find out a way to lower by a half margin. The competitor Widget Company lowered the cost of production by $4. While for XYZ Company to decrease by half may be challenging while considering the cost of production, factoring all the measures will provide a way to lower the cost of production, maybe by $3. Reducing the cost of production will enable the company to lower the market price of the widget to about $20.99, thus encouraging the customers to purchase more.
Strategic Plan and Changes
Lowering the price while maintaining high-quality production will instil consumers' confidence towards XYZ Widget and buy more. The company can consider reducing the size of the widget to a smaller size that meets the cost of production reduction and also encourages more purchases. To regain the 20% lost market share, the company needs to take advantage of lowering the price while maintaining high-quality products and create the most attractive product promotion techniques that advocates for the change. At $27.99, royal customers who could only afford three widgets annually can now provide four widgets.
The company can slightly increase the size of the widget by a smaller margin. Consumers will also get attracted to a larger size widget at a lower price. In cutting the cost of production, XYZ Widget Company can opt to produce in mass with an alternative source of energy. Such a move will enhance a price cut to an affordable cost that will attract more buyers.
To encounter the price margin, the company needs to intervene with the resources available that will enable the company to cut down on the cost of production. The company also needs to improve organizational effectiveness through communication. The CEO needs to consult the managers who then listen to the employees for better connections that will enhance production. Establishing a conducive approach towards connecting all the departments will encourage workgroups that foster the interest of the organization. As the organizational development consultant, laying off seven out of 21 employees isn't the solution right now, depending on the goals of the company. The company needs more workers to increase production. Eliminating bonuses and commissions from sales personnel who exceeded particular target sales only decreases the employee's morale. To maintain and motivate the workers, the company needs to keep the bonuses, encourage workgroups, and involve the employees in contributing to matters that concern the company. This way, employees feel their effort is acknowledged and tend to put more effort into their department. According to the editor of Multicultural Organizational Development: Evolving toward Organizational Cultural Competence journal, companies that accept the changes and adapt new measures can greatly mainstream the performance. XYZ Company needs to encourage its employees by implementing new strategies that will promote creative thinking, motivation, and commitment ("Multicultural Organizational Development: Evolving toward Organizational Cultural Competence," n.d.). The company also needs to set a new infrastructure that supports a higher rate of Widget production, offers a new approach, and has a concrete future approach towards maintaining higher sales. As the organizational developmental consultant, the company needs to accept that economic and market structures have changed, and they require a concrete intervention plan that captures the needs of prospective buyers in the market industry.
The company has to counter respond to competitor's tactics by reducing the cost of production to reduce the consumer price. The company also needs to initiate motivation strategies that will encourage the employees to get more active. Involving employees in company matters is a lead motivator, offer incentives, maintain bonuses and commissions to high performing employees. Including a strategic product, promotion technique will also take the company far ahead in regaining the 20% market share and also reach out to new customers that will enhance an increase in sales. The most appropriate plan that will facilitate the XYZ Company to regain market share and gain more sales includes involving all the stakeholders. The CEO has to include experts who can help the company assess, determine the cost of production, outline the measures that need to be taken, including energy uses, technology, resources, and any other factor that may help out in cutting down the cost. Implementing such a decision requires the CEO to involve the stakeholders, including managers, supervisors, and employees. The significant next step consists of counter-attacking the competitor's strategies but also to ensure high maintenance of ethical consideration in any technique the company intends to implement. If a competitor can find a way to reduce cost, then there is a way to cut down the cost of production but still maintain the output of higher quality Widgets than the competitor. Outstanding quality is a plus to the XYZ company as loyal customers consider purchasing quality products that serve their needs appropriately and for long (SWARBROOKE, 2007).
In Summary, A collaborative organizational approach involving the CEO and the entire company organization will ensure the company's objectives are met. The plan should include the transformation of the infrastructure, adopt new technologies, and mainstream the overall performance of the company. The company also needs to strategize on company values that will improve motivation to the employees. Experts will need to perform a data-based approach that will facilitate the company to understand and diagnose the XYZ Widget company failures and implement new strategies. Implementing the Action Research Strategy Plan will take time for the company to adapt to the changes and adapt to the new approach. The new changes and policies implemented will also require time for the market to respond. Depending on the XYZ Widget Company's efforts to materialize the implementation, the company will take up to six months to realize positive results. Time taken to reach out to the new prospects can reduce depending on the efforts in Widget promotion.
The Cross'Level Mediating Effect of Psychological Capital on the Organizational Innovation Climate'Employee Innovative Behavior Relationship. (2015). Retrieved from https://onlinelibrary.wiley.com/doi/10.1002/jocb.90
Multicultural Organizational Development: Evolving toward Organizational Cultural Competence. (n.d.). Multicultural Counselling Competencies: Individual and Organizational Development, 107-119. doi:10.4135/9781452232027.n9
SWARBROOKE, J. (2007). Main concepts in consumer behaviour, including models of consumer behaviour, adapted for tourism. Consumer Behaviour in Tourism, 40-49. doi:10.1016/b978-0-7506-6735-7.50008-7
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Evaluation Essay Sample on XYZ Widget Co: Adaptability & Commitment Crisis Requires OD Measures. (2023, Feb 27). Retrieved from https://proessays.net/essays/evaluation-essay-sample-on-xyz-widget-co-adaptability-commitment-crisis-requires-od-measures
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