Management simulation: addressing declining sales and multiple organizational problems

¶ … Simulation

Case Summary

The sales at a local electronic store I am managing have been falling steadily for the past eight weeks. Furthermore, the store is facing action possible legal sanctions from the city council for violating local disability access regulations.

How can the advantages and limitations identified in the simulation impact your decision-making process?

The use of simulation provided an important tool to help me understand which of the store problems were the most urgent for the management to address, particularly as the problems of the store were diverse rather than singular in nature. I identified poor sales figures as the most pressing concern, and identified the cause of this problem as competition from a new store. But while the simulation caused me to identify continuously falling sales as the most pressing problem, it also helped me realize that my perceptions were falling short in terms of identifying other factors that could have a long-term impact upon the store's sales, such as poor product selection on the part of the store and poor employee motivation that also could directly affect sales numbers.

My selections were as thus:

Critical

Non-urgent

Sales

Product Mix

Attrition

Operations Manager

Legal Actions

New store

Inventory

Market Trends

Variable Pay

WAN

Performance Results

The reduction in sales figures was symptom of a larger problem, rather than an enclosed area of concern. Based on my performance, after the simulation I was called upon to answer such prompts as: "Did you consider the report by your predecessor that indicated that the drop in sales was due to the newly opened store? Did you consider other reasons for the fall in sales?" There was in fact, no single cause for the drop in sales. Rather the decline in sales was due to a constellation of problems. For instance, the product mix did not cater to the customer's demands for new internet-related and multimedia products. The low variable pay for junior employees also seemed to be the cause of employee attrition and resulted in poor productivity, as new employees were less aware of product strengths. Thus, when asked by the prompt, "could these issues have contributed to the poor sales performance of your store?" The answer was a resounding yes.

List four key points from the reading assignments that were emphasized in this simulation.

The four key points were the "problem solving steps," involving

1) Defining the problem (poor sales and pending legal action)

2) Analyzing data (such as rates employee attrition, prices of the store's competition, and altered customer demand)

3) Evaluating and selecting potential solutions (including introducing multimedia-based products and a better variable pay scale)

4) Developing an action plan for implementation (such as increasing commission pay for junior employees, while attempting to keep other new costs at a manageable level, given the current drop in store revenue)