The Status of the Company

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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 organization and significant changes were made. As the changes began, it was found that Avon had some issues with its talent, both with the existing talent and with the company’s ability to identify and produce talent. The change model in the Avon case was the 360-degree feedback assessment tool. According to Silzer & Dowell (2010), the rise of 360-degree feedback assessments encouraged greater use of competency models built specifically around leadership behaviors. Silzer & Dowell (2010) go on to say that “organizations soon had lists of the leadership behaviors they expected from their managers,” which was the case with Avon. Avon was found to be opaque. As such, the talent practices within the organization were not known to the managers or to the associates. The resulting change was that of new practices and a re-making of the existing practices to become more transparent except for when there were confidentiality concerns.

Another weakness that existed with Avon’s talent practices was that the company was egalitarian and needed to turn around the quality of its talent. Once this was understood, Avon made a change to differentiate its investment in its talent. This allowed for the company to better match the effectiveness of its talent investment with the expected return since before the turnaround the high performers were not engaged and the low performers were not managed very effectively.

Avon’s level of complexity in its talent management practices was another noted weakness. Quality talent was not grown as quickly as was needed by the company so Avon simplified its talent process to ensure a balanced process.

Employee surveys and talent reviews were performed episodically. Decisions concerning promotions and other objectives were more or less influenced by as much by individual knowledge and emotion as by objective facts. The turnaround that was made here was that

relationships became stronger and as the business grew, leaders know of other’s...
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