XYZ Widget Company has Lost 20% of its Market Share
For this assignment, first carefully review the required background materials. Make sure you are highly familiar with the main steps involved in action research and organizational development discussed in the readings. When you are finished reviewing the background materials, take a close look at the scenario in the Case Assignment below.
Case Assignment
Action research is the process of inquiry that is used to assist an individual or organization in solving a problem or improving a situation. For each scenario below, think about the reasons why things did not work out well for the company and more specifically, think about action research in terms of developing a plan for action.
Your task for this assignment is to explain what steps the organization should take by reviewing the standard action research and organizational development steps covered in the background materials. Try to assess which key step is missing in the scenario below.
Then write a 4- to 5-page paper using three scholarly sources from the required and optional readings list addressing the following for the scenario below:
The Perils of XYZ Widget Company
Sales have gone down at the XYZ Widget Company and nobody in the organization, including the CEO, seems to know why. They decide to hire you, an organizational development consultant, to do some action research. You and the CEO spend a lot of time discussing how to proceed and create a contract. The contract specifies that you will limit the scope to finding factors that led to the decrease in sales, come up with a plan of action within one month, and answer the following questions using the background data from the scenario below.
Scenario:
XYZ Widget Company has lost 20% of its market share over the past two years resulting in a sales loss of 1.5 million in 2017 and 2 million in 2018 for a total of $3.5 million. Each widget costs the consumer $29.99 to purchase, and the average customer will purchase three widgets annually. Each XYZ widget is produced for $8 dollars and is of higher quality than the competition.
One competitor (Jim’s Widgets) in the widget industry with a similar product has increased market share by 12% due to a lower production cost of $4 per unit and price to the consumer of $9.99.
The CEO of XYZ Widget Company is reluctant to lower prices and has had to eliminate commissions and bonuses of sales employees who exceed goals. In addition, seven of the 21-member sales team were laid off for non-performance of sales goals.
Develop an Action Research Strategy Plan covering the following Action Research Phases in a report to the CEO.
Data gathering and Diagnosis
Feedback
Planning Change
Intervention
Evaluation
1. What are the reasons behind the decrease in sales?
2. What actions or strategy (data/sales/changes) should be taken to turn sales around and regain market share?
3. What strategy should be taken to increase employee morale?
4. How long should this strategy take to complete?
XYZ Widget Company has Lost 20% of its Market Share
Introduction
The sustainable growth and development of organizations across different economic sectors demand the development and implementation of effective business strategies. Such strategies should enhance the firms’ ability to mitigate the ever-shifting changes within the external and internal environments within which such entities operate. Among the key elements for ensuring sustainable growth and development of organizations includes enhancing the efficacy of an organization’s daily operational activities. Failure to enhance the operational activities of an organization amidst factors such as increasing competition and entry of new firms into the market, for instance, may have negative implications on its overall growth and development objectives. The concept of organizational development offers a reprieve from such negative outcomes through its holistic approach to initiating and implementing the desired change towards enhancing the daily operational activities of an organization CITATION McL06 \l 1033 (McLean, 2006). It entails implementing and integrating diverse practices based on behavioral sciences to enhance organizational change towards enhancing its overall performance CITATION McL06 \l 1033 (McLean, 2006). The action research model makes for one of the key models for implementing organizational development to achieve the desired outcomes. The model features seven key stages of implementation, including entry, contracting, Data gathering and diagnosis, feedback, planning change, intervention, and evaluation. The 20% loss in market share by the XWY Widget Company over the past two years, coupled with the loss of approximately $3.5 million over the same period, calls for effective implementation of an active research model toward mitigating identified challenges facing the firm and ensuring positive organizational development changes. Provided herein is a detailed application of some of the key aspects of the action research model toward instituting positive changes in the XYZ Widget Company case scenario.
Data Gathering and Diagnosis
XYZ Widget Company provided key data on the organization’s overall performance in the market, showing a significant decrease in the company’s market share in the past two years, accounting for approximately $3.5 million in sales loss over the same period. One-on-one interviews were conducted with the sales personnel and members of the organization’s management to get their views on what they believe to be the reasons behind the decrease in sales and market share. The one-on-one interviews further allowed for the assessment of the interviewees’ beliefs, individual strengths, and weaknesses or areas for improvement CITATION Vog13 \l 1033 (Vogelsang, 2013). It was also imperative to evaluate the diverse personalities of both the managers and other staff members at the organization. The managers’ completion of the Myers-Briggs Type Indicator (MBTI) was instrumental in gathering data and information about their personalities CITATION Vog13 \l 1033 (Vogelsang, 2013). Sales representatives were introduced to the 360-degree feedback process, including consumers’ feedback on their performances CITATION Vog13 \l 1033 (Vogelsang, 2013). The diagnosis of the research findings from the gathered data took place under the sole expertise of the organization development consultant, as neither the CEO nor the managers had the experience of using the diagnostic tools utilized in this phase.
Feedback
Market research revealed that the presence of new entrants into the market provided competitive alternatives to XYZ Widget Company’s consumers who opted to pur...