Raleigh & Rosse Case

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Case Write-Up
Raleigh & Rosse: Measures to Motivate Exceptional Service
Summary of Case Situation
In this case, Raleigh & Rosse, Simons and Mahoney (2011) report that Raleigh & Rosse, a retailer for luxury goods, is dealing with a class of action lawsuit from its own sales associates. R&R had established loyal customer relationships, and good reputation by providing high-level service. In fact, to build an entrepreneurial and responsible working environment, R&R began to use a new strategy called “Ownership Culture” in 1987. The central idea of the Ownership Culture was SPH (Sale-Per-Hours), the way to evaluate sales performance. However, the SPH program put a lot of pressure on store managers and sales. Consequently, a large group of the R&R associates sued it for “working off the clock” in 2010. This lawsuit might cause reputation damage, and the settlement could be up to $200 million. In 2008-2009 before the case, there was an economic recession. The whole luxury goods industry in the U.S. dropped over 14%, and R&R revenues declined 10%. Although R&R suspended new-store opening, and hiring, still the business not good as before. So, now the CEO of R&R, Linda Watkins, not only has to cope with the SPH lawsuit, but also fix the reputation damage during this hard time.

Central Issue
How CEO of R&R, Linda Watkins fix inappropriate, controversial regulation of the Ownership Culture (SPH program) during economy depression.

Recommended Course of Action
Linda should revise the R&R Ownership Culture partly. For instance, set a fair minimum SPH and working hours to ensure sales’ rights, or enhance employee benefits to satisfy sales associates.

Basis for Recommendation
R&R should revise the Ownership Culture partly, because it an ultimate solution. It not only eases intense relationship between the company and sales associates, also it lead R&R to sustainable development. If R&R keep using the old Ownership Culture to run...
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