Shoe Corporation of Illinois
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Summary of facts
· Shoe Corporation of Illinois (SCI) produces a line of lower-priced women’s shoes. · Average profit per pair of shoes has decreased from 10 years ago. · The company has 2 factories within 60 miles of Chicago and a headquarters; offering 100 to 120 different products to customers each year. · The external environment is unstable, requiring rapid responses to style demands. · SCI’s organization chart is based on Functional Grouping. · Large shoe houses hold the market for “stable” shoe market because of economies of scale, SCI offers trendy styles and their org structure allows for them to be flexible for this. · The volatile product environment of SCI causes friction within the company. An e-commerce department, directed by Olsen, was recently created to help reduce friction but this has not had the desired effect as most employees are resisting change and do not want to use the new technologies. Olsen believes these technologies would increase communication and product awareness and reduce design/production/delivery times. · SCI continues to use outdated procedures for deciding new styles and unclear/confusing production procedures. · According to Allison, the average time from design to the pilot run is too long but could be reduced and there is too much conflict in the styling phase. · According to Lawson, Flynn is knowledgeable and has gained much experience over the years. Last year, he was promised a raise that he has yet to receive. · Flynn says he is becoming dissatisfied with his job as it lacks creativity, he would like more freedom to design styles but Lawson told him the current process is proven. · Flynn and Freeman feel Allison is overtaxed and his work is suffering. They also feel the procedures should be changes and without consulting others two projects with their new procedures, one successful and one not. · There is conflict between the styling department and one of the factories due to a lack of understanding of each other’s roles and responsibilities. · There is a goal conflict in the various departments and this is causing certain employees to circumvent procedures in order to achieve their goals.
Statement of the Problem
The problem in which Shoe Corporation of Illinois is currently facing is the need for quicker speed of responsiveness to customer expectations and changing trends which is the result of the lack of communication, collabroation and coordination present at SCI, lack of horizontal linkages implemented in the organization’s structure, the absence of a leadership which supports a culture that accepts the use of technology, emergence of conflict between separate departments and the insufficient incorporation of technology into the company's processes. (Kat: added)
Analysis/Causes of the Problem
The problem in which Shoe Corporation of Illinois is currently facing is the need for quicker speed of responsiveness to customer expectations and changing trends which is the result of the lack of communication, coordination and collaboration present at SCI, lack of horizontal linkages implemented in the organization’s structure, the absence of a leadership which supports a culture that accepts the use of technology, emergence of conflict between separate departments and the insufficient incorporation of technology into the company’s processes.
Charles F. Allison believes that the only way for a small independent company to be competitive is to change styles frequently, be flexible and design shoes that appeal to customers. Since SCI is in the fashion industry its operations fall under the ‘Simple-Unstable’ quadrant of the ‘Framework for Assessing Environmental Uncertainty.’ This indicates that the company operates in an environment with high-moderate uncertainty where there are constant shifting customer expectations and preferences. In this sector managers need...
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