The Status of the Company
Running Head: AVON PRODUCTS, INC. 1
1. Provide a brief description of the status of the company that led to its determination that a change was necessary.
Avon Products, Inc. (Avon) is a 122 year old company whose primary focus is on the economic empowerment of women around the world. Basically, the organization is a leader in direct distribution of cosmetics, fragrances and skin care products. Prior to and including the year 2005, the company was considered to be a very successful company operating in over 40 countries with 70% of its revenue from outside of the United States. Its growth rate on profit margin was outstanding. In 2006, the company found itself in a declining state in revenue and profits. The company’s direct-selling business was taking on great costs for a number of reasons including global legal restrictions and some dissatisfaction of the company’s representatives. Since Avon’s reliance is on its direct-selling, the earnings and representative satisfaction are essential for the success of the business. The underlying factor along with other contributing causes was that Avon had grown faster than portions of its infrastructure and talent could support. The structure, people and processes that support a $5 billion company were not necessarily a good support for the $10 billion company. In the process of reviewing its talent practices the talent management team was able to identify six areas of missing or poorly functioning talent processes. The weaknesses that were found in Avon’s existing talent practices were listed 1) opaque; 2) egalitarian; 3) complex; 4) episodic; 5) emotional; and 6) meaningless.
2. Identify the model for change theory typified in the case study of your choice. Discuss what led you to identify the model that you did.
Faced with the challenges of its flattening revenues and declining operating profits, Avon’s CEO restructured the
1. Provide a brief description of the status of the company that led to its determination that a change was necessary.
Avon Products, Inc. (Avon) is a 122 year old company whose primary focus is on the economic empowerment of women around the world. Basically, the organization is a leader in direct distribution of cosmetics, fragrances and skin care products. Prior to and including the year 2005, the company was considered to be a very successful company operating in over 40 countries with 70% of its revenue from outside of the United States. Its growth rate on profit margin was outstanding. In 2006, the company found itself in a declining state in revenue and profits. The company’s direct-selling business was taking on great costs for a number of reasons including global legal restrictions and some dissatisfaction of the company’s representatives. Since Avon’s reliance is on its direct-selling, the earnings and representative satisfaction are essential for the success of the business. The underlying factor along with other contributing causes was that Avon had grown faster than portions of its infrastructure and talent could support. The structure, people and processes that support a $5 billion company were not necessarily a good support for the $10 billion company. In the process of reviewing its talent practices the talent management team was able to identify six areas of missing or poorly functioning talent processes. The weaknesses that were found in Avon’s existing talent practices were listed 1) opaque; 2) egalitarian; 3) complex; 4) episodic; 5) emotional; and 6) meaningless.
2. Identify the model for change theory typified in the case study of your choice. Discuss what led you to identify the model that you did.
Faced with the challenges of its flattening revenues and declining operating profits, Avon’s CEO restructured the
References: Bates, S. (n.d.). Communicating vision: How HR professionals can help leaders articulate big ideas and get people moving in one direction. Retrieved 11/03/12 from http://www.hrcrossing.com/article/270140 Edersheim, E.H. (2007). The definitive Drucker. New York, NY: McGraw-Hill Goldsmith, M., & Carter, Louis. (2010). Best practices in talent management: how the world’s leading corporations manage, develop, and retain top talent. San Francisco, CA: Pfeiffer Noe, R.A., Hollenbeck, J.R., Gerhart, B., & Wright, P.M. (2011). Fundamentals of human resource management. New York, NY: McGraw-Hill Silzer, R., & Dowell, B.E. (2010). Strategy-driven talent management: A leadership imperative. San Francisco, CA: Jossey-Bass.