Case Patagonia

Topics: Management, Planning, Plan Pages: 3 (650 words) Published: February 26, 2013
Juha Jutila 18.09.2012Management Control1(2)

Case: Patagonia
Questions: Why do you think there were problems with the Workbook Process? Analyze the reasons for the problems described in the case. What could be done to solve the problem?

The intent of the Workbook Process was very good: Directing company employees to work for company goals by open plans and involving employees in planning process. The way this was understood in Patagonia management and implemented was even idealistic. Because target was set so high, the process became a monster, too costly and time consuming. It was not any more efficient use of time to have the whole company so widely involved in detailed planning.

There were some future targets to reduce the massive amount of paperwork by building computer systems. This might help a bit but if process is too heavy, computerizing it is not enough.

It was expected that everybody want and can learn to understand all the financial figures. This was not true and that’s why the Workbook Process was not motivating all the employees. Maybe Patagonia should have built on parallel some other ways to motivate people who were not so interested in numbers. So the process was addressing all three control problems (direction, motivation, personal limitations) for part of the organization, but not for all.

In addition to the challenges in planning part, also the practical implementation of follow-up was challenging. It was difficult to get the actuals on time and the usability of monthly numbers was not always good for planning because of monthly variances. It might have been better to use for monthly follow-up some other measures prepared by experts in financial department.

The same targets of openness, understanding of the plans and involvement in planning process could have been reached probably with lighter process. Information could still be openly available. Maybe some non-informal, detailed numbers could be replaced...
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