Herman Miller Case Problem

• Management

Problem:

Herman Miller wanted to implement Green Strategy on its product, avoiding PVC wherever possible. However, the increased cost is placed on the staff’s compensations. They have to undertake the pay cut, especially top executives. This way would easily result in outflow of talents, and decrease the ability to reinvent and renew itself. Therefore, Herman Miller needs to identify its most important value first and then achieve the balance between employees, Green characteristic and price.

Concept:

P 361. The funding requirements of good strategy execution must drive how capital allocations are made and the size of each unit’s operating budget. Underfunding organizational units and activities pivotal to the strategy impedes successful strategy implementation. A company’s operating budget must be both strategy-driven (in order to amply fund the performance of key value chain activities) and lean (in order to operate as cost-efficiently as possible)

Solution:

Focusing on innovation provided by creative employees. Change the compensation system. Employees can get a fixed ratio bonus from profit of the products they design. Make ergonomic design as Herman Miller’s biggest asset to differentiate itself from the competitors. Take green factor as a minor advantage on their products. If there is capital left, invest on Green strategy, but mainly the capital should be allocated to the managers, designers and any field innovation related.

• Marketing

Problems:

Herman Miller’s main attraction for its product is ergonomic design, but not environment friendly. The emphasis on recycled material would possibly make the consumers who care about the practical function doubt the quality of the chairs. The emphasis on environment protected characteristics cannot estimate how many consumers who