Cushz Armchair

1.

An American company recently acquired Cushy Armchair, a Hong Kong based firm. The acquisition of the market leader in reclining chairs resulted in the replacement of the managing director of the business, in order to “breathe in new life”. Alison Sampson of the acquiring company replaced the founder who had been in charge since the beginnings of Cushy Armchair and who was well respected. Two weeks into the assignment Sampson sent an email to all purchasing, sales and design executives, in all 17 countries the company was present in. Her email remained without any effect.

There are a couple of reasons for the poor response from her colleagues. The most obvious is the timing: She has no authority, recently started the job and expects her new colleagues to change their business during the busiest season of the year, as the manufacturing process for the winter has begun. Besides the poor timing there are a few other problems that arise with her email and that she should have taken into consideration before sending out the message.

The organization requires different parts of the company to work together, with a certain level of interdependence. The organizational alignment model defines these levels of interdependence as pooled, sequential and reciprocal. In the case of Cushy Armchair the interdependence is reciprocal, everybody relies on everybody before the company is acquired: each department has its own responsibilities and can choose suppliers, advertising and design choices. Witht the arrival of Allison Sampson at the head of the company, she decided to take away some of those responsibilities. She will not let any of the, for now autonoumous departments, make their own decisions and she would like to move away from the reciprocal interdependence to a sequential interdependence where all the decisions are made in A (New York), the manufacturing is done in B and the sales are more or less exclusively under the responsibility of the NYC office.

Alison Sampson sees the numbers and the financials of the company. The human component of the business is left aside.

In the mid 14th century the word business, then spelled bisignes stood for care, anxiety and occupation in old English. Computers do not make business and decisions are supported by human relationships. Unfortunately she doesn’t meet with her colleagues in Hong Kong, nor with the other managers that she sent an email to. She has no authority and is asking the colleagues, who she had never met to discontinue relationships with stakeholders; relationships that have been established with care, over years. She doesn’t know the situation and in this case there are 17 situations to assess and to evaluate before deciding on the strategy. Sampsons decision is a change in the company policy, she is forcing the people who have been working in the business for a while in a new model without ever consulting with them in person. It appears that she forgets the human component of business and that the equation between purely technical and fact based decisions and human based decisions in wrongly assessed. In fact the human part is not assessed at all, since Sampson has never met any of her 17 colleagues she sent the email to.