Organizational Change ‘leadership, Culture, and Transition at Lululemon, Multimedia Case’

HR 236 – Organizational Change

‘Leadership, Culture, and Transition at Lululemon, Multimedia Case’

Part I        Case Questions (27 marks)

Questions can be completed in point form.  The mark indicated after each question indicates the number of points I am looking for in each question.

1.         What was the state of Lululemon when Christine Day was hired as CEO in 2008? (3)

Financially, Lululemon was doing pretty well and expanding rapidly. It had grown exponentially from 2005 to 2008, from 20 to 100+ stores. However, 2008 was the year of the horrible economic recession so it was making an impact on Lululemon. The goal was to keep up this growth and open more stores to increase sales to $1 billion from the current $350 million, so they had a long way to go.

2.         What did Day cite as the major issue among the management team when she was hired as CEO in 2008? How did this issue affect the morale and thus the decision making ability of the members of the management team? (3)

        Day said that the major issue among management was rising tensions and a “them versus us” mentality. This was caused by the rapid growth of the company forcing management to hire key leaders from outside of the firm, but they were not given the proper training or time to build key relationships with the founder and original team members. Because of this, morale was low, and they were making uninformed decisions which was negatively affecting the company.

3.         Describe Chip Wilson’s decision to ‘make’ or ‘buy’ when he sought to create a board of directors and explain his motivations for doing so. (2)

        I would say he was buying when he sought to create a board of directors because he needed them to help him key positions like HR, CFO, etc. He really didn’t know how to do it himself, his area of expertise was more in creating a brand but he knew he needed to expand his team to continue growing.

4.         Explain how and what the front-line employees communicate with the executive team at Lululemon in regards to their product development. Next, describe the organizational culture that this type of communication encourages. (3)

        The front-line employees are asked to communicate any problems that customers have with the products to the executive team. They find out what needs to be improved and it has an impact on how future clothes are designed. This encourages an inclusive organization culture. The employees feel listened to and that they are a part of something larger than just selling clothes.

5.         How does Lululemon recruit and select employees to ensure there will be a ‘fit’ between the employees and the company? What affect does their recruitment and selection process have on ensuring employees will execute the behaviors the company wants them to over a long period of time? (4)