Case Analysis: Leading Culture Change at Seagram

Topics: Edgar Bronfman, Jr., Bronfman family, Seagram Pages: 6 (2058 words) Published: March 3, 2012
Joseph E. Seagram Sons, Inc., a major alcohol distilling company of its time encountered new business challenges in the 1990s; increased government regulation and taxation on liquor, the 90’s recession, decline in sales, criticism of spirits marketing, and an eroding core market as the business plateaued. The President and CEO of Seagram Company, Edgar Bronfman Jr., recognized the crisis at hand and embarked upon a new vision to reposition and redefine the company’s competitive advantage based on changing its core values. Bronfman took crucial actions to differentiate company’s products and activities by taking ownership in other various industries such as an oil company, Martell USA (cognac), Tropicana (fruit juice beverages), DuPont (chemical), later acquired Dole Food, expanded spirit business into China and Asia Pacific, and purchased an entertainment company (MCA Inc. of Universal Studios and its theme parks). Through his visionary eyes, Seagram is to be “the best managed Beverage Company” with focus on growth, consumers and customers, reward, teamwork, development, training, motivation, and honesty—its values. This paper’s purpose is to review the corresponding actions of a mature organization in plateau, its need for companywide transformational change in culture and value; its management style in correlations to its implementation processes—emphasizing on being the “best managed Beverage Company” through high productivity yields increased profitability, diversification, and company competitiveness by unlearning the old and learning the new which ended unsuccessfully. First off, why did Seagram need to change? Bluntly because it is a reaction due to the lack of profit intake, lost in sales, “new sobriety”, and the comfort feeling it gets as a mature company. It has remained the same in product and services of distilling alcohol beverages for more than a decade and time has caught up to Seagram. Carol Bartz said it best when she said, “change if you’ve done something the same for 5 years because when you get too comfortable then you’re in trouble.” Change is inevitable as innovation, globalization, and customer orientation of today are not consistent with what is of tomorrow. It is difficult to change the mindset of an already established organization; its inability to change quickly from being “set in its ways” is a liability. For example, Blockbuster was a stable mature firm that chose to look the other way as change of the future stared into its eyes—internet rentals that eliminated physical in-store movie rental needs. This loss in competitive advantage is a crucial factor leading to a dark future, avoidable with small necessary incremental changes (Nadler, 1989) best to adapt and evolve, re-energizing mature firms and changing its values simply and rapidly from the inside rather than the outside (Beatty & Ultrich, 1991), as is in this case. The priority at Seagram is to identify customer wants and bring back growth by changing people’s behavior or culture and the way they interacted with each other. New sets of values became policies to live by as Bronfman felt that “values drive behavior, behavior drives processes and processes drives results.” True, but consider culture as well. Culture is the experience, the reality of the values; it is what members of an organization see, feel, and hear. It should correspond to the company’s values, mission, and vision or else there is nothing to build on and beliefs will slowly diminish. Ordinarily, culture does not change quickly and certainly not overnight, thus not a strategy of choice in a turnaround situation on short deadlines. This normative-reeducative change strategy is assuming people are social beings and will adhere to the norm by wanting to “fit in” (Chin & Benne, 1969). Under this assumption, buy-ins is certainly possible with charismatic leadership and momentous excitement, which Bronfman at Seagram indeed “talked the talk.” Bronfman is someone who...
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