Business Improvement and Creativity for PUMA Company - Case Study Example

Business Improvement and Creativity for PUMA Company Introduction PUMA is among the leading sport lifestyle companies worldwide and specializes in developing and designing apparel, footwear and accessories (PUMA. 2013). The company is dedicated to working in a manner, which contributes to society by supporting sustainability, peace, creativity and staying true to the fundamental principle of being honest, fair, creative and positive in decision making. PUMA scope of activities start in sport and ends in fashion. PUMA’s sport lifestyle and performance labels include categories such as Motorsports, Football, Running, Sailing and Golf. Sport Fashion features are done in collaborations with popular designers such as Mihara Yasuhiro, Segio Rossi, and Alexander McQueen. The PUMA company owns the brands Tretorn, Cobra Golf and the brand PUMA. The company, which was incepted in 1948 distributes its services in over 120 countries, staffs more than 11000 workers and has headquarters in Hong Kong, Boston and Herzogenaurach in Germany. This paper applies Kotter’s 8 Stage Change Model approach to summarize business improvements of PUMA Company. A focused and informative analysis of the theory is done with the aid of a diagram analysis. The analysis of the theory is based on its weaknesses and strengths and case analysis of PUMA organization. Challenges, impact sustainability, resistance, current strategy, turnover, profit and audit are key points discussed in the paper in respect to PUMA’s case study. Finally, the paper provides recommendations in view of what the company should do to support sustained improvement and success. Focused and Informative Theory Analysis Kotter’s 8 Stage Change Model: Step one of this model stresses on the need to create urgency. In order for change to occur, in an organization, the entire management must embrace the change (Schacter, 2002). Developing a sense of urgency around the needed anticipated change helps in sparkling the motivation to have things done (Katzenbach and Smith, 1993). This step encompasses identifying potential threats and developing scenarios, which indicate what, is likely to happen in the future, examining opportunities to be exploited, requesting support from customers, and stakeholders and providing dynamics and reasons to get people thinking and talking. In order for the change to be effective, 75 percent of the management need buy into the idea. Therefore, significant energy and time is required for building urgency prior moving to the next stage. Stage two is the form of a powerful coalition, which involves convincing participants that change is necessary. This point requires visible and strong leadership from senior people within the organization. Tom (1982) argues that to effect change, bringing together influential people or a coalition from various professions remains critical. After the formation of the coalition, it should operate as a team by continuing to build momentum and urgency around the need for change (Hersey and Blanchard, 1977). Step three demands creation of a vision necessary for change. Solutions and great ideas should be linked to an overall vision, which people can easily remember and understand (Madaza and Agere, 1999). A central vision helps members to understand the importance of their contribution (Deal and Kennedy, 1982). The leaders should therefore establish the values, which are crucial to the change, develop a summary, which captures the organization’s vision, practice the vision speech, create a strategy to implement the vision and ascertain the member fully comprehend the vision. Stage four is centered on communicating the vision. Communicating the vision frequently is indispensable at the slightest opportunity that arises (Hammer and Stanton, 1995). The newly created vision should be applied daily to solve problems and when making decisions. This helps member to remember to the contents of the vision and apply in their departments. For the leaders, walking the talk is critical in demonstrating the kind of conduct expected from others (Deloitte, 2005). To achieve this, leaders are expected to often talk about the vision, honestly and openly, address people’s anxieties and concerns, lead by example and apply the vision to the company’s operations. Step five focuses on removing obstacles such as structures and processes that gets in its way. Removing obstacles empowers members to move forward in the implementation of the vision (Kettl, 1993). To achieve this, identifying, changing and hiring leaders conferred the mandate of delivering the change must be conducted. Compensation and performance systems, job descriptions, and organizational structure should a line with the vision. People resisting change should be identified and action taken to remove human barriers. Step 6 aim at creating short term wins. Motivation is ultimately the key to success and gives the organization a taste of victory in its early stages of change process (Charles, et. al. 1999). In a short span of time, the organization should endeavor to delivering tangible result to their members. Without results in the short run, negative thinker and critics might halt the change progress (Cohen and Brand, 1993). Achieving short term goals calls for undertaking sure fire projects, which are easier to execute, selecting inexpensive projects, thoroughly analyzing the probable pros and cons, and rewarding the participants of the change process (Commonwealth Secretariat, 1995). Step seven is about building on the change. Kotter emphasizes that most change projects fails mainly because success is stated too early. Each success presents an opportunity of what actually went right and highlights what need to be improved (Hammer and Champy, 1993). At this stage, the managers are expected to set goals and proceed on fostering momentum achieved, embrace the idea of Kaizen (continuous improvement), and introduce fresh ideas by changing leaders and agents for the coalition. The last step as identified by Kotter entails anchoring the changes in corporate culture. In order to make the changes stick, the vision must become the core part of the company. Often, the corporate culture determines what is to be implemented, so the values behind an organization’s vision must be practiced regularly (Cohen and Eimicke, 1995). Continuous efforts should be made to make certain the change process is reflected in all aspects of the organization. This gives the change a solid place in the company’s culture. It is imperative that the company’s new and existing leaders continue to support the change. This stage should focus on including the change values and ideas when recruiting and training new staffs, creating plans to replace leaders and publicly recognizing members of the original change coalition. Fig 1.1 represents Kotter’s 8-Step Change Model Impact Sustainability PUMA has established how it aims at analyzing its activities i.e. risks and opportunities related to the sustainable development. The management has outlined measures (changes) required so as to operate in accordance with recognized and main international and national standards. The company has developed a supplier compliance screening plan since, which provides the data for assessing various supply chain opportunities and risks. The plan is based on the company’s code of conduct and safety & health environmental standards. These program and standards have been executed in adherence with International Labor Organization (ILO). It is from this development that PUMA developed its vision, which remains to be the company’s overall framework of corporate impact that guides all activities. In the 2011, the company produced its initial Environmental Profit and Loss Account. The EP&L has served as the bases for strategic tool for assessing environmental impact and shows where sustainability initiative needs to be directed in order to realize meaningful progress and environmental targets. The EP & L provide critical information that ensures the company is well placed to handle underling risk emanating from increased costs of raw material and to mange the scarcity of supply challenges (Chaneta, 2007). This is essential in a sector facing increasing input costs attributed to shifting water availability and changing climate. Current Strategy PUMA unveils how the systematic implementation and strategy devised takes into consideration all facets of sustainability that have major impact on the company (Puma, 2011). For example, the strategic competition base positioning, environment and resources, innovation and management, the value added chain, demographic developments, the product life cycle, and the product portfolio. PUMA usually discloses its target and activities through combined reports, which are in line with GRI standards. The company’s scorecard 2015 highlights the holistic sustainability objectives including sustainable products and conservation of climate. Sustainability covers a significant part of the company’s strategy, makes up the vision and is inclined in all business endeavors (Handy, 1996). The company as its strategy discloses what quantities and qualitative sustainability goals to be set and practiced. During the annual stakeholder, shareholders, capital markets, supplier and employee are invited to air their views. In 2009, the company via its sustainability scorecard pointed out the targets to be realized by 2015, which include supply chain, products and operations. This target is a saving of 25% on energy, water and waste reduction globally. In 2011, the company was among the first brand committed to Detox Campaign, which was launched in a bid to eliminate hazardous discharges from production processes (Puma, 2011). Turnover/profitability audit PUMA has established financial parameter on appropriate sustainability, which is based on periodical control and internal planning and how reliability of data is applied to external communication (Puma, 2011). Each component of PUMA’s vision (peace, creative, safe) has key targets, which are periodically reviewed and adjustment of financial parameters made against the targets. With the establishment of PUMA’s E&PL account, environment impacts are effectively accounted for in monetary terms. The Application of Theory-Evaluation and Analysis, Challenge, Resistance, Impact Sustainability PUMA faces major challenges related to the industry and include growing social and reputational challenges such as migrant labor, increasing prices, operating costs, shortage of raw materials, and increasing rates of child labor (Puma, 2011). Creating urgency based on Kotter’s 8 step helps in identifying PUMA’s potential threats and establishing scenarios that are likely to unfold in the future. To counter these changes, the management should examines and explode available opportunities to cut down on increasing operation costs. Further, it would be ideal for the PUMA leadership to work on a team building within various affiliate companies across the world to contain emerging resistance and barriers. PUMA’s strategy is to become the most sustainable and desirable sport lifestyle brand globally. In 2009, the company adopted a sustainability concept PUMA vision in view of manifesting its long standing in CSR (Puma, 2011). Today, the company’s position as a creative leader in lifestyle gives it responsibility and opportunity to contribute to a conducive environment for future generations. PUMA’s vision is in line with Kotter’s need for creating a vision for change (Battelle, 2010). The company’s vision makes it easier for stakeholders, employees and suppliers understand expected changes in the future. Conclusion and Recommendations In order for PUMA to support sustained improvement/success, proper procedures should be adopted to oversee the organization’s management and identification of environmental, economic and social performance. A proper governance structure help in identifying opportunities, risks and ensures compliance with internationally accepted codes of conduct, principles and standards. It is essential for the company to develop sustainable products and strive towards implementing sustainable ideas, which facilitates reduction of environmental impact and footprint. The company should forge future cooperation with the Environment Protection Encouragement Agency (EPEA) and investigate the need for developing recyclable products as provided for by the Cradle to Cradle concept. PUMA is among the leading sport lifestyle companies worldwide and specializes in developing and designing apparel, footwear and accessories. The company, which was established in 1948 provides its services in over 120 countries, employs more than 11000 workers and has headquarters in Hong Kong, Boston and Herzogenaurach in Germany. The company’s scorecard 2015 provides the holistic sustainability objectives including sustainable products and conservation of climate. Bibliography: PUMA. 2013. PUMA at a Glance. [Online] available at: Read More