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Power and Influence

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Submitted By jpeng29
Words 1128
Pages 5
Topic 3
Jieni Peng
2/15/2015

http://blogs.wsj.com/pharmalot/2015/02/12/sanofi-shrinks-cancer-research-and-revamps-rd-cutting-100-jobs/?KEYWORDS=changes+in+organization
1. Sanofi, a drug company, is having issues trying to change the company. The change involves the company eliminating 100 research and development jobs in Massachusetts by trying to shrink its oncology unit and moving it into the Genzyme unit. This change is due to the company struggling to strengthen its diabetes business as well as trying to find a new chief executive. The former chief executive lowered sales outlook after unexpected pricing discounts arose. This caused the board members to become unhappy because of a lack of communication of the chief executive informing them of his decision. This is causing the current chairman to try to shift resources away from cancer research by performing damage control and trying to refocus the company as quickly as possible. Meanwhile, the board is struggling to find a replacement CEO with various pharmaceutical executives declining the position. The struggle that Sanofi is encountering in trying to implement their major change programs signals a failure in creating a powerful enough coalition program. In order for a major renewal program to be successful the chairman plus another group must come together and develop a strong commitment in creating a strong renewal program and implementing it properly. Sanofi lacked this communication with their former CEO and the board members as well as with the current chairman and the board members. With the former CEO, he never communicated with the board member of the drastic decisions that he was going to make to the company. This caused a rift between the board members and the CEO because they felt that the CEO was not respecting their opinions properly. With the current chairman, the company is struggling to refocus itself by not having a proper plan in what their end goal is going to be. The chairman and the board members did not have the proper level of trust and communication to properly form together and develop a shared assessment of their company’s problems and opportunities.
2. Starbucks
Starbucks had to undergo major changes inside the company when the CEO Howard Schultz returned. This was due to the decline in sales and profit and competition from both ends of the market with McDonalds and smaller mom and pop stores that made it harder to Starbucks to retain customers. Starbucks was in trouble and had also lost its core focus as a company. Stocks had been dropping at an alarming rate when Schultz came back as CEO. Noticing the decline, he wrote a memo to the board members. In the memo, Schultz talked about what he though was wrong with the company including the continued expansion of unnecessary stores, the height of the espresso machines that blocked customer and barista interaction, and how Starbucks just didn’t have the right feel when you walked into it anymore. The memo helped force the company see what it was doing wrong and what needed to change. This forced the members to hold conversations that the company needed to have bring out the concerns that many people were thinking. The main issue of Starbucks was that it was focusing too much on profits and had lost its core value as a company. Schultz was able to bring back the focus of the company on what truly mattered.
Schultz did this and will need to continue to do this for the success of the company when he realized that Starbucks needed to get back to what made it great in the first place. Schultz realized that as Starbucks continued to expand and increase efficiency, it came at the expense of the stores originality and authenticity. This is why that Schultz shut down multiple Starbuck stores in order to properly retrain the company’s baristas in the art and technique of espresso making. This helped to refocus the company and have them see what truly mattered was the interaction between the baristas and customer. Another thing that the company did and needs to continue to do is to keep on realizing that even though ideas matter, the people matter more. As Starbucks got bigger, the customers could sense that the stores were less special than what they used to be. Schultz fixed this by sending multiple store managers to gather in New Orleans in order to redrill what the company’s mission and values truly stood for. Finally, Schultz realized that even if you return back to the basics the company needed to keep on innovating to order to retain success. Schultz did this in the company by coming up with the VIA instant coffee and embracing social media and e-payments. Starbucks was able to this so well that they have the most Facebook friends than any other company. This allows Starbucks to send e-gifts and allows customers to use their phones to pay for their food. The embracement of social media helped Starbucks fortify a strong connection to its customers and loyalty that helps Starbucks continue to be a success.
3. Working at Amway over the summer, the company underwent some changes in the sales department. The company decided that many of the managers and employees did not truly understand what made its products unique and superior to the other products that you could find in a department store such as Target or Walmart. This lack of understanding led to fewer sales and a harder time trying to market the products. Amway fixed this issue by holding sessions to reteach all of the employees what each product did and why it was so unique. They also retaught us how to approach customers and what points for each product we should start out with. To help develop this support, Amway mainly used the incentive technique. The incentive was that by selling this amount of products, Amway would sent out a gift basket full of their products to you for you to use as well as a bonus. This helped increase motivation to achieve the goals. Another reward was that as you sold more products, the gifts and rewards that you would receive would increase in their value. The gifts that we received was a way that the company offered us recognition. It felt as if the company was acknowledging our hard work in learning more about the products and using the companies outline sales pitch that would highlight the key points of the products. The compensation seem to say that the company knew that it took time and energy for us to relearn and analyze the products and that they realize that we are taking extra time and energy in doing this process.

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