I. Statement of the Problem
How can Cherie Cosmetics improve the operations and marketing of the Elegante division?
How can the communications between the operations department and Elegante division be improved for better coordination?
II. Areas of Consideration
Cherie Cosmetics is a wholly-owned subsidiary of the International Cherie Company of New York. The company is directed by Ralph Nolk and has four distinctive product lines each headed by a general manager. Heather King is the general manager of the Elegante Division in Toronto, Canada. Bob Shaw is the Vice President of Operations. Dennis Green, the purchasing manager of operations, is Heather King’s main contact.
Elegante is the first new product line that Cherie Cosmetics introduced in twelve years and is the most exclusive line of the prestigious company. A lack of sales history for Elegante combined with the complex dynamics of a new product line made forecasting for Elegante difficult. Elegante needed the operations department to be responsive and cooperative to its marketing needs. Overall, the success of Elegante hinges on the support and coordination of the operations department.
Since the beginning, however, Elegante encountered various problems. There were errors in shipping and warehousing, production and purchasing, which affected the sales of the Elegante division and reduced employee morale.
Bob Shaw hired Sandra Mirano to fill a new position of product coordinator in the hopes of improving communication between marketing and operations for Elegante and other product lines in the company. After Sandra Mirano’s appointment, however, communications continued to deteriorate.
One particular situation involving tester units portrayed the problems between the operations and Elegante division. Tester units allow the testing of Elegante products before purchase and are vital to the success of the division. The completion of the tester units were delayed for a long period of time. In an attempt to get the tester units completed, Heather King called and emailed Sandra Mirano requesting the reason for the delay. Her communication was ignored. Heather King went directly to Dennis Green to request the status of the tester units, but was also ignored. Finally, Heather King decided to bypass the process and went directly to the supplier, Ryan Casey.
After hearing of how Heather King bypassed the operations department and went directly to the supplier, Dennis Green verbally attacked Heather King for breaching procedures.
Heather King brought up the issue to Bob Shaw by writing a memo, but Bob was also unresponsive to the issues at Elegante.
There are many reasons why the operations department does not support and effectively communicate and coordinate with the Elegante division.
Firstly, the operations department does not have the incentive to support the Elegante division. The Elegante division comprises only 1.5 percent of Cherie Canada’s total sales in all product lines. Production runs for the Elegante division is only 200 units, whereas it is 5,000 units for other Cherie products. The operations department has other Cherie divisions to coordinate with and the Elegante division simply doesn’t have the market or profit size to be a top concern of the operations department.
Secondly, the operations department is not accountable for the performance of the Elegante division. They have no motivation to support Elegante if they consider their success as separate from the success of the Elegante division. There is nothing in it for the operations department if they put their effort and resources into the Elegante division.
Thirdly, Heather King doesn’t have the formal power to coordinate with the operations department. Power is the capacity or potential of person A has to influence the behavior of person B, so that person B acts in accordance with the wishes of person A....