Root causes of Chattanooga Ice Cream Company's sales decline

Business Problem -- Chattanooga Ice Cream Company

The Business Problem

The Chattanooga Ice Cream Company is one of three divisions of the Chattanooga Food Corporation, founded in 1936 by the grandfather of its current division president, Charlie Moore (Sloane, 2003). The Chattanooga Food Corporation also maintains a Grocery Products Division and a Specialty Foods Division in addition to the Ice Cream Division. The Ice Cream Division had been strong until recently and sales have flattened out. Some of the external factors to which that decline is likely attributable are: (1) the increased market share of "super-premium" ice cream products such as Haagen-Dazs and Ben & Jerry's; (2) the growing popularity of healthier ice-cream-like alternatives such as frozen yogurt and fat-free ice creams; and (3) the growing popularity of "mix-in" ice cream products such as those that include pieces of cookies or candy bars in the ice cream mix. Making matters even worse, Charlie just received the news that Chattanooga's third largest customer, Stay & Shop, has decided to drop the Chattanooga line and to replace it with the Sealtest product line in its stores throughout a substantial region of its market (Sloane, 2003).

Charlie had recently replaced a retiring veteran of the company who managed using an autocratic style wherein he solicited information from his department heads (as well as from other information channels that he had developed) and then made decisions independently (Sloane, 2003). Charlie believed in a much more collaborative leadership methodology and hoped that by conducting joint meetings with all of his department heads he could create an environment in which they all learned from one another and in which decisions were the product of a consensus rather than of his independent decisions (Sloane, 2003).

When Charlie called a meeting of his department managers, the session quickly devolved into arguments wherein each department head blamed the other for the problem (Sloane, 2003). Specifically, the head of Marketing blamed the head of Product Development and Production, who blamed both the head of Marketing and the head of Information Systems. Meanwhile, the head of Sales argued that the main problem was that Marketing was not being aggressive enough to secure premium shelf space and also, and that the product line was stale because product line desperately required more products to compete in the health food, specialty, and super-premium areas. This was the first time that the respective department heads had expressed those views to one another. Previously, all of them had expressed them only to Charlie in private. Not wanting to allow a rift to develop within his management team, Charlie tried to "turn a deaf ear" to their mutual blame of one another and hoped that by finally airing out these grievances, he could channel their respective concerns into a productive collaborative process (Sloane, 2003).

Solving the Internal Problem

Irrespective of the external problem of improving Chattanooga's lagging sales, Charlie must first solve his underlying leadership and management style problem. First, he must take back control of decisions and restore the manner in which his predecessor made decisions. Second, he must change the organizational culture wherein his department heads privately undermine one another while (ordinarily) refraining from criticizing one another in any open and productive manner. In that regard, he must impress upon his management team that all of their respective input must be expressed during meetings instead of privately behind one another's backs. Third, for the time being, Charlie must assume the position of sole decision maker in connection with which he must also develop procedures for collecting all of the necessary information from all of his team members so that his decisions reflect the relevant substantive data from each department. Finally, Charlie can announce that his long-term goal is to develop a collaborative decision-making organizational culture among his management team, but that their demonstration of their ability and willingness to operate under his new guidelines is an absolute prerequisite to doing so.