1. What were Debbi and Randy’s “resumes” when they met? Based on this, what would seem to have been a reasonable future for each?
When Debbi and Randy met, Debbi was a young and inexperienced girl who had only learned the art of baking cookies from her teenage experiences. She worked for the Oakland A’s baseball club and moved to a local department store. On the other hand, Randy was an economist and a graduate of Stanford University. Judging by their resume, Debbi would have been a small-scale cook of cookies, cooking for her family and the baseball club, while Randy would have been offering consultancy services on economic matters.
2. What do you think led to the opening of the first store? What do you suppose Debbi’s goals were? Randy’s?
I think the couple opened the first store because of the praise Randy’s friends gave to Debbi. They must have loved her cookies and kept asking for more, prompting her to realize that she could turn her passion into a business venture. Similarly, it must have been a bet between the couple to see whether Debbi could deliver on her promise of going into the cookies business. I suppose Debbi’s goals were to find a business that would keep her busy while her husband was dealing with his business. Randy’s goal on the other side was to make his wife happy by agreeing to her proposal of venturing into the cookies business. I suppose neither of them thought the business would turn out to be that big and successful.
3. The opening of the second store presented Debbi with a real dilemma. What was it? Discuss Debbi’s management style in this context and in the context of the rapid growth that followed.
Debbi realized that what she thought to be a store was actually a business that could develop and make her good money. She realized that all she needed to do was to bake high quality cookies and she would achieve success in her business. The idea was not making money as most businesses would wish but to satisfy her customers and the money would come. Her management style was democratic: She allowed her employees to take part in the decision-making process. As a matter of fact, it was because of their desire for growth that she opened the second store. This can only be achieved when the subordinates are given the autonomy to complete their work without the harassment from the manager.
It was the vice president of her business, Chuck Borash, who suggested the idea of international expansion in 1982. Debbi concurred with his suggestion and established Mrs. Fields International. This supports the fact that Debbi’s management style gave the subordinates room to make decisions concerning the business. As you would expect, this makes them feel like they are part of the organization and therefore work hard to ensure that the business succeeded as it did. On a different occasion, it was because of the views of other executives that Debbi realized that the company needed to change some things in order to succeed in the Japanese market. Upon the opening of the second store, Debbi was forced to delegate duties to employees because she could not be in two places at the same time. Although it was not easy for her in the beginning, she learnt to live with it. She also treated her employees with respect and made them feel worthy.
4. What is Randy’s role in the organization?
Randy played the advisory role in terms of what were the best business deals to be taken since he was an economist. He helped in the provision of technical knowledge to the stores and provided on-site management alongside his wife. For instance, he believed that it was necessary to keep a small number of employees to allow them to concentrate on solving business problems.
5. Examine the exhibit on the Fields information systems. The in-store systems are essentially unique for a business of this type at this time. Discuss them. What do you think of them? How does Field use them?
The Fields information system works with a Tandy 1000 computer that has one floppy disk and one hard disk, 20 megabytes big. It also has a 1200 bps modem for communication. For such a relatively big and active company, these specifications are so low and outdated. As a matter of fact, new versions of computer systems do not have floppy drives. They work with external hard disks or bigger capacity internal hard disks. A 2-megabyte hard disk is too small. It cannot keep enough information from all the stores. 1200 bps modem is also too slow for a busy company. It needs a much faster communication system.
The good thing about the system is that it has a backup plan. In case one system failed, information could be retrieved from the back up. However, there are new systems from companies like Cisco which work as one unit making it cheaper for the company. For instance, there is the Cisco retail system which is much faster and has a bigger capacity. Generally, for a system that has to transmit information every day, this system’s capacity is too low and cannot handle a huge number of customers or retailers.
6. Classify the in-store and corporate systems with respect to classifications of business systems that we discussed in class.
The in-store system could be described as a sales force automation system. This is because it works on a comprehensive sales and marketing approach to improve business performance by creating a long-term customer relationship. It comprises a number of applications ranging from sales process tracking and automation to contact management. This system makes it easier for the company to service the clients. The case indicates that the system enabled Debbi to remain in touch with the store managers. The system also keeps track of the activities in every store and produces reports that are viewed on a daily basis. This means that the managers can keep track of whatever happens in every store. Through the system, the company can also keep in touch with the suppliers. In addition, when new employees are needed, they can post their resumes on the system. The managers can then retrieve the information to call up successful applicants. This saves time and money on the paper work.
The corporate system could be classified as a job cost business system. This is because the system tracks the expenses and revenues for individual projects within a larger business. The case states that the controller viewed report summaries from every computer. It also monitored the trends and problems and contacted the field managers for more insight about the reports. This indicates that the system boosts the performance of each business. Job cost applications enable the managers to compare the budget of every store with the actual profitability of every store.
7. Outline the resume of an ideal Fields store manager. How does this compare with the resume of a typical manager at say, McDonald’s?
A resume of an ideal store manager at Fields would include the following: two years of College education, especially in business management; experience in sales and management; computer literacy; and report writing skills. This is different from the requirements to typical store managers in other companies because of a number of reasons. For starters, typical store managers do not engage in sales and marketing activities. Unlike typical managers, Fields Company requires that their managers also take part in sales activities. In addition, companies like McDonalds prefer managers with a university degree or graduate diplomas. These would be people of above 30 years of age. On the other hand, Fields prefers young managers of between 20 to 25 years old. They are normally inexperienced and work for the first time at the company. It therefore gives young managers a starting point in their careers. This is something they would not get in other companies. Other companies would also expect their managers to have worked as assistant managers at some point before becoming full-fledged managers. In general, the resume of typical managers is much longer and more detailed than that of a store manager at Fields.
8. We are supposed to note the statistic on store manager turnover. We are also supposed to see this as a bad thing. Why? Can you make an argument that this is not a bad thing for Fields or the store managers?
Keeping records about store manager turnover helps the company understand the department that seems to have problems or issues that need to be solved. In most cases, the managers would quit their jobs because of some lack of satisfaction. For instance, if the salary they get does not match the kind of work they do, they will feel overworked and quit to companies where they will get a better pay. A high turnover therefore means that more people have moved in and out of the company, which is not always good. Every company wants to keep its best employees at all costs.
However, store manager turnover is not always a bad thing. For instance, in the case of Fields Company, the manager turnover was a result of managers going back to school to advance their studies. This is an indication that the company gave them enough experience to make them feel that they could become better managers. Other than the experience, education is necessary.
9. How do Debbi & Randy view franchising? Is this consistent with their “style”? Why do most organizations of this type embrace franchising?
They viewed franchising as a business where every business works in its own way. Since their business was not established specifically for profit making, it was very unlikely that a franchisee would get into business for any reason other than making profits. Moreover, once the profit aspect comes in, the business would soon fall. This kind of business is not consistent with the profit-making style. The Fields needed their cookies to remain a feel good product sold in a feel good manner. Most businesses are keener on the profit aspect and would not agree to this policy.
Most businesses of this kind embrace franchising because they are able to benefit from strategies and trademarks of a successful company to attract more customers and make profits. Using successful business models gives the franchisee the good will that puts them on a better place than its competitors. Moreover, the parent company provides support to the franchisee that boosts its business. For instance, it could benefit from training and advertising as part of the business agreement. In exchange, the parent company earns some income by levying royalties and initial fees from the franchisee.
10. What are the two most common ways that organizations finance themselves? What are the tradeoffs of each?
The two common ways of financing an organization are through bank loans and going public. Getting bank loans is a long shot. Banks would typically consider companies that are more than two years old. The tradeoffs of bank loans are the tangible assets which are used as collaterals. Manufacturing companies using heavy equipment or a company building are exempted. The IPO process starts by a private company contracting an investment bank. This process involves making certain decisions, including the number of shares to be issued and their prices. The tradeoff of going public is by an investment bank assuming ownership of the shares and their legal responsibility. It is the underwriter who sells the shares to the public at a higher price than he paid for them to the original owners.
11. Explain the Fields approach to financing in the context of their management style. Explain the London thing!
The first source of finance for the Fields was a bank loan of $50,000. However, the experience of bank financing kept becoming more unpleasant. This must have been a result of the high interest rates charged by the banks. This meant that a huge percent of the company’s profits went to repaying the loan. Moreover, banks loan money basing on the ability of an organization to pay and, in most cases, they finance an organization that has a greater value. Since they were the only owners of the company, they were the only ones permitted to take a loan. Since the value of their business was not much, they could only take a loan that was less than their worth. Consequently, they opted to go public. For a company to go public, it has to become a publicly owned and traded. In this situation, it meant that the Fields had to relinquish the ownership of the company and the decision making process to the public or the shareholders. This process was definitely going to be difficult because the company worked under the principle of quality of the products, and not profit making.
This contradicted with the main reason behind buying of shares from a company. The public would wish to invest in a company that promises to give good returns after a while. The fact that the Fields were not much interested in profit made the public shy away. Moreover, the company did not believe in franchising which meant that it was not very well known like other foodstuff companies, e.g., McDonalds. An investment bank would wish to underwrite or own shares of a company that is well known in order to attract more people to buy the shares. This was not the case of the Fields.
12. The Fields say that their organization is too “warm & fuzzy” to require a formal organization chart. Based on information from the case, what type of structure do you think they actually have?
The Fields seem to operate under a sole proprietorship business structure. This is because the business is owned by a married couple. The organization is also simple, that is why it is described as warm and fuzzy. The management has very close ties with the employees and operating managers. There are also very few legal controls. The managers are also involved in selling cookies. For instance, while a regional manager oversees the work done by district managers, he manages his own store. This means that everyone, including managers, ‘soils their hands’ in the running of the business, unlike in other companies where the managers are mainly in control of their subordinates and concentrate on the office duties. The Fields have no specific job hierarchy.