Gtp/Fun Foods the Biggest Change

GTP/Fun Foods

The biggest change needed by GTP would be an improved sales and profitability reporting system for its various divisions and lines of business. It is odd - and quite unacceptable - that GTP would have no idea how the Fun Foods division was performing and whether it was suffering losses that were impacting GTP profitability. So, GTP immediately needs to implement a better sales and profitability reporting procedure that would be monitored by the company's top management on a regular basis. And GTP's overall management procedures were seemingly weak as well. Division manager Isaac Wander was able to essentially overhaul the entire division and implement harmful strategies without anyone knowing. Clearly, GTP top management needs to implement a regular reporting procedure that would keep it better informed of major strategic initiatives at its divisions.

Closing or restructuring Fun Foods were not GTP's only options, although it is clear that these are the only options that GTP's Board of Directors were willing to pursue. One option, obviously, would have been to maintain the status quo, and to allow the company to continue draining profits. The other option would have been to keep Fun Foods at its present staffing level and to attempt the restructuring without downsizing. This would have conceivably caused more pain in the short-term. For example, sales would have initially decreased while the company shuttered many of its distributor relationships, but costs would have remained the same. GTP's problem, in essence, was fairly simple: the company needed to find a way to improve profitability at Fun Foods while preserving the division's, and the parent company's, reputation. The GTP Board decided there were only two acceptable ways to do that (shutting the division or downsizing), even though there were obviously more options.

3) Numerous factors likely influenced GTP's decision to try to restructure and fix Fun Foods. The most important factor, obviously, must have been that GTP's Board believed the division could, in fact, be fixed. To arrive at this conclusion, GTP's Board would have had to look at: sales figures (pre- and post-acquisition); costs, and whether they were in line with production and sales; any clear management problems that perhaps were impairing the division's performance; sales and marketing efforts, and whether key markets were being pursued correctly; any problems with the product itself or how the product was getting to market; and what the impairment to the company's reputation would be if the division was closed.

The two main benefits that would have followed closing the division pertain to costs and opportunity costs. The cost benefit would have been that GTP could have quickly stopped the financial pain being caused by the Fun Foods division. The other benefit would have been that GTP could have spent its management talents and energies on improving other areas of GTP's core business. Obviously, turning around a division takes a great deal of time and effort.

4) Reassigning employees would take close communication with division heads and human resources personnel. There are some obvious reasons for this. First, we need to keep division heads in the loop because they know best what their current personnel needs are, and what types of qualifications and strengths they are seeking. They also would be aware of issues like people in their division resigning, retiring or being promoted, which would create open positions. Naturally, human resources should be aware of these things as well. Human resources also can serve as a liaison among several divisions, knowing whether a position was opening in Chicago, Atlanta, Paris or Tokyo. Human resources also would make sure that issues involving a transfer from one division to another - such as any salary, benefits or relocation issues that may arise - are handled in an orderly and professional manner.

5) There are numerous components that are essential to change management, and the absence of any of these things can derail the entire effort. First, obviously, is the vision - an organization must have a clear idea of where it wants to be headed and what steps are necessary to get there. The second critical component is communication - everyone in the organization must understand the vision and be committed to its implementation. The third critical component is implementation - an organization must implement the changes that it has deemed necessary for change. The fourth critical component is evaluation - the organization must monitor its performance in the change process.

If any of these components are missing, the organization's efforts can fail. If the vision is lacking or incorrect, the organization can end up in a worse situation than it had been previously. If communication is lacking, employees may work at cross purposes. If the implementation is faulty, the goals will not be achieved. and, finally, without evaluation the organization can not monitor its progress and respond to problems that may arise.

6) in short, the Pareto principle states that 80% of an organization's problems come from 20% of the factors that influence it. Naturally, this can apply to Fun Foods' situation. Targeting the wrong markets, for example, was only one aspect of the business, but it was creating a significant portion of the problems. The employees were good (they had been with Fun Foods during more profitable times) and the product was good (assuming it did not exceed its shelf life). But one decision to focus on the wrong markets undermined many of those otherwise positive attributes.

The 80/20 rule can apply to many things in business and in life. Many business owners find, for example, that 80% of their business comes from 20% of their customers. People may find that they let 20% of their friends or acquaintances monopolize 80% of their time, or that they spend 80% of their money on 20% of their bills.