Chattanooga Ice Cream Case Analysis

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Chattanooga Ice Cream Division Case Analysis

The Ice Cream Division of Chattanooga Food Corporation had shown declining sales for 5 consecutive years through 1996. That was the year that they lost their third largest customer, Stay & Shop. A turn around had to take place but the Ice Cream Division leadership was unsure how to accomplish this. The division was run by Charlie Moore, grandson of the company founder. Charlie was a very democratic leader but had major issues controlling and leading his team of vice presidents. The team was very dysfunctional considering they did not trust each other, had open conflict that was often malicious and mostly unproductive, a very apparent lack of commitment to work with each other, and the biggest issue appears to be avoidance of accountability. Moore had to get his team on the same page and quickly. Each management team member has their own issue with the other team members. Moore needs to publicly put the loss of Stay & Shop in the past and let everyone on the team know that it is all of their responsibilities to get together and become a functional team to make sure that no other business is lost. He needs to leverage this as an opportunity to finally build his team in a way that functions as needed but also in a way that he can ultimately manage in a style he is comfortable with. This paper will examine the problems with the team and propose how Moore can get this accomplished.

Chattanooga Ice Cream Company, a wholly owned subsidiary of Chattanooga Food Corporation founded in 1936, sold ice cream products primarily to supermarkets and regional food chains. It was one of the largest regional manufacturers of ice cream in the United States. Chattanooga showed revenues of $150 million in 1996. This was down from $185 million just five years before, due in part to a decline in per capita consumption and increased competition. A further consideration was the fact that mix-in flavors (like fruit, nuts, sauces) were gaining in popularity over smooth flavors. Chattanooga was not tooled for mix-ins due to significantly increased cost requirements. Despite having taken action with the introduction of a line of frozen yogurt, and making other operational changes, the Company continues to founder and seemingly remains anchored to the past.

To address declining sales, a management change was undertaken in 1993. Charlie Moore, grandson of the company founder, was put in charge of the division. New talent, Barry Walkins, was brought in to shore up marketing. Information and control systems leadership was revitalized with the employment of Stephanie Krane. Additionally, in an effort to reduce costs, Chattanooga Ice Cream Division closed its original manufacturing plant in Chattanooga and consolidated production in its two other plants in Birmingham and Memphis in 1995. The problem that brought everything to a head was the loss of their third largest customer, Stay & Shop (representing $6.5 million in revenue), with little apparent forewarning. Analysis

The previous general manager for the Ice Cream Division was a stern manager that made decisions in a vacuum, seldom consulting any other senior team members. This led to a culture of dependence (on the leader) and team autonomy, which did not foster sharing vital information within the management team. His coercive management style yielded a management staff whose only decision making skill is in matters that only involve their own departments. Moore was completely different, believing significantly in the value of a team approach.

Moore found that no one was ready to open up in front of each other. He did find, though, that most were willing to openly criticize the others in private. Although his leadership approach and attempt at engagement should be commended, he failed to adapt his style to the appropriate state of the team while moving them to a storming...
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