SAMPLE. All Change at Broake Shoes

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1 BUSINESS All Change at Broake Shoes Resources for Courses Broake shoemakers was established in 1910 by four brothers, Henry, George, Albert and Jasper Broake. Today, five generations and more than 100 years later, the Broake association with fine, handmade shoes lives on and the business is still family owned, ran by fifth generation Broake, Andrew. Broake specialise in the production of handmade brogues, using only the very highest quality materials with each pair of brogues taking around 10 weeks to make. The process involves 135 skilled craftsmen, many of which have been with the business for over 20 years. Broake produce 5 different styles of brogue, but all of them are produced in exactly the same way using traditional shoe making methods. The shoemakers at Broake pride themselves on the fact that every pair of shoes is unique and individual to the person who wears them. Andrew Broake, whilst being a traditionalist, has suggested to his senior managers that the way the business produces some of their shoes needs to change. Broake often struggle to meet demand which has resulted in the failure to meet delivery targets. This has resulted in some key customers failing to place new orders, instead choosing

2 All Change at Broake Shoes Resources for Courses shoe suppliers who they say are, more reliable. The cost of producing a Broake pair of brogues is also incredibly high and Broake are suffering from increased competition in the marketplace, often losing out to manufacturers who can produce high quality shoes at a fraction of the cost of a pair of Broake s. Andrew wants to change the way that 3 styles of brogue are produced, introducing more modern production techniques into the business. Andrew has argued that Broake should invest in more technology in order to increase labour productivity as well as implement some elements of lean production and quality assurance. This would require a significant change in culture for the business with staff needing extensive training and also increased empowerment with the shoemakers taking on increased responsibility. Andrew has yet to address the employees directly about the change, although rumours are rife within the business and employees have indicated to senior managers that they would resist any change. 3 of the longest serving members of staff have been particular vocal in their opposition. Morale within the business has dipped considerably and productivity has decreased. Absenteeism has also started to rise with many staff unhappy at what Andrew may have in mind for the future of the business. 1 Analyse the reasons why employees at Broake might be resistant to change (12 marks) 2 With reference to Kotter and Schlesinger, evaluate the best way for Broake to overcome resistance to change within the business (20 marks)

3 All Change at Broake Shoes Resources for Courses Suggested answers 1 Reasons why employees at Broake might be resistant to change Kotter and Schlesinger outlined 4 main reasons for resistance to change; parochial selfinterest, misunderstanding, low tolerance to change, different assessment of the situation Job security issues investment in technology with the specific objective of increasing productivity could lead the employees to believe their jobs are at risk (more output with less employees) this links to parochial self-interest, for example, focusing on their own interests as opposed to the needs of Broake as a business The introduction of lean production could also make employees feel that their jobs are at risk due perhaps the misunderstanding of the term, lean this links to misunderstanding. Andrew has so far failed to address the employees about his plans. This could cause severe misunderstanding Changing job roles with employees expected to work in a different way and also take on more responsibility this links with low tolerance to change especially as many employees have been with the business for over 20 years A move away from traditional, handmade shoe making to more automated shoe making. Staff could believe that this could affect the USP of Broake and therefore they may simply disagree with the (new) direction of the business. 2 Methods of overcoming resistance to change Kotter and Schlesinger outlined six approaches that can be adopted to overcome resistance to change; education and communication, participation and involvement, facilitation and support, co-optation and manipulation, negotiation and bargaining, explicit and implicit coercion Andrew has failed to outline his proposals with the employees. This appears to be perhaps the most significant barrier to change. Staff may not be aware that only 3 styles of Brogue are going to be automated and that the other two styles will still utilise their skills Andrew perhaps needs to spend time educating and communicating with the employees about why these changes are necessary. They may not be aware about the reduction in repeat orders and falling sales due to being less price competitive. Perhaps if employees realise that without these changes their jobs may be at risk then they may be more open to the proposals

4 All Change at Broake Shoes Resources for Courses Education. The promise of training to help staff to cope with the new roles Andrew could involve the staff more (participation) in the change process. Perhaps by giving them some input into the changes. This could reduce their resistance to change Manipulation and co-optation. Although there has been general resistance to change there are 3 employees in particular who seem to have opposed it the most. Andrew could/ should try to win these 3 staff over, perhaps by giving them key roles within the change process. This could help to get the other employees on board Negotiation. Andrew could perhaps look to negotiate with the employees, perhaps by introducing incentives in return for productivity targets Coercion. Andrew could look to simply force the changes through implying that if the changes are not made then staff will need to be made redundant or wages will need to be cut in order to reduce the cost of production. Evaluation There are a number of different ways in which Andrew could look to overcome the employees resistance to change Coercion should perhaps be avoided. Andrew has a loyal workforce with many long serving staff. Forcing the changes through could prove to be problematic Education and communication. Andrew has so far failed to address employees about the proposed change and that has led to rumours within the business. By communicating with his employees about what he is proposing, and more importantly why, he could significantly reduce and overcome employee resistance to change Manipulation and co-option. Andrew will need to get the three longest serving staff on board as they will have a major impact on the ease at which this change can be implemented Education. Staff will need assurances that training will be available to help them cope with the change in their job roles

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6 What Happened Next? Resources for Courses Teacher instructions What Happened Next is a kinaesthetic card activity to consolidate the teaching and learning of balance sheets. The activity can be differentiated making it ideal for a range of ability levels. The activity is ideally done in pairs/ three s. Timings Approximately 60 minutes Teaching & Learning Strategies There are 3 main ways in which this activity can be carried out. Teaching & Learning Strategy 1 1 Each pair/ three is given a copy of the completed balance sheet (Balance Sheet Before) and a set of the scenario cards. There are 4 for each scenario and each scenario is colour coded as well as identifying the scenario on the top of the card. 2 The teacher reads out each scenario from the scenario sheet (8 different scenarios have been provided). 3 Students look through the scenario cards and then decide which card from the 4 matches which scenario. 4 Students place which card they think is correct to one side. This continues until all 8 scenarios have been read out. 5 Once all 8 scenarios have been read out the teacher goes back through each one to check students understanding. A teacher s answer sheet has been provided. 6 After the above has taken place each pair/ three rewrites the balance sheet incorporating the changes on the what happens next cards. Extra copies of the teachers answer sheet can be printed out and given to the students to allow them to incorporate the changes (however, please refer to the end of the teachers instructions re strategies for differentiation). A blank balance sheet has also been provided for students to complete. (An alternative strategy here is to simply have the students hold up the cards at the end of each scenario). The business wants to purchase a new delivery van (worth 5,000) in order to deal with an increase in demand for their products. The business decides to purchase this vehicle by increasing their overdraft by 5,000. WHAT HAPPENED NEXT?

7 What Happened Next? Resources for Courses Teaching & Learning Strategy 2 (A PowerPoint presentation has been supplied to be used in conjunction with teaching and learning strategy 2). 1 Each pair/ three is given a copy of the completed balance sheet (Balance Sheet Before) and a mini-whiteboard/ marker pen. 2 The teacher reads out each scenario from the scenario sheet in conjunction with showing the relevant scenario on the PowerPoint presentation. The PowerPoint presentation shows each scenario (one at a time) along with possible changes to the balance sheet. However, for this teaching and learning strategy students need to work out the actual figures in relation to the change. 3 Students then need to decide what happens next and then write this down on their mini-whiteboards and hold it up. This allows the teacher to assess the students understanding (full answers have been provided). 4 Once all the scenarios have been read out/ shown on the PowerPoint then students need to re-write the balance sheet incorporating all 8 scenarios. Extra copies of the teachers answer sheet can be printed out and given to the students to allow them to incorporate the changes (however, please refer to the end of the teachers instructions re strategies for differentiation). A blank balance sheet has also been provided for students to complete. Teaching & Learning Strategy 3 Teaching and Learning Strategy 3 is a combination of Teaching and Learning Strategy 1 and 2 in so much that the teacher gives the cards to weaker students in order to provide them with more support in deciding what happens next (very weak students can be given fewer cards per scenario to limit the choice available). Strategies for differentiation 8 balance sheets have been provided each one showing how the balance sheet changes after each scenario. This allows the teacher to be able to allow weaker students to incorporate fewer changes in the balance sheet and still be able to see if the students completed balance sheet is correct. The business purchases some new land for future development which is fully funded by the issue of 20,000 worth of shares. WHAT HAPPENED NEXT?

8 SCENARIO CARDS 1 The business wants to purchase a new delivery van (worth 5,000) in order to deal with an increase in demand for their products. The business decides to purchase this vehicle by increasing their overdraft by 5,000. What happened next? SCENARIO CARDS 1 The business wants to purchase a new delivery van (worth 5,000) in order to deal with an increase in demand for their products. The business decides to purchase this vehicle by increasing their overdraft by 5,000. What happened next? Non- Non- Net Net SCENARIO CARDS 1 The business wants to purchase a new delivery van (worth 5,000) in order to deal with an increase in demand for their products. The business decides to purchase this vehicle by increasing their overdraft by 5,000. What happened next? Non- Net SCENARIO CARDS 2 The business decides to purchase 5,000 worth of inventory in cash. What happened next? Non- Net SCENARIO CARDS 1 The business wants to purchase a new delivery van (worth 5,000) in order to deal with an increase in demand for their products. The business decides to purchase this vehicle by increasing their overdraft by 5,000. What happened next? Non- Net Non- Net SCENARIO CARDS 2 The business decides to purchase 5,000 worth of inventory in cash. What happened next? SCENARIO CARDS 2 The business decides to purchase 5,000 worth of inventory in cash. What happened next? SCENARIO CARDS 2 The business decides to purchase 5,000 worth of inventory in cash. What happened next? Non- Non- Net Net

9 SCENARIO CARDS 3 One of the businesses creditors has contacted the business asking it to repay the 8,000 it owes it. The business increases its overdraft by 8,000 in order to make the repayment. What happened next? SCENARIO CARDS 3 One of the businesses creditors has contacted the business asking it to repay the 8,000 it owes it. The business increases its overdraft by 8,000 in order to make the repayment. What happened next? 8,000 decrease 8,000 increase Net Net SCENARIO CARDS 3 One of the businesses creditors has contacted the business asking it to repay the 8,000 it owes it. The business increases its overdraft by 8,000 in order to make the repayment. What happened next? Net 8,000 increase 8,000 decrease SCENARIO CARDS 4 The business sells inventory (which originally cost 5,000) for 5,000 to another business allowing the business 3 months to pay. What happened next? SCENARIO CARDS 3 One of the businesses creditors has contacted the business asking it to repay the 8,000 it owes it. The business increases its overdraft by 8,000 in order to make the repayment. What happened next? Net 8,000 decrease 8,000 decrease SCENARIO CARDS 4 The business sells inventory (which originally cost 5,000) for 5,000 to another business allowing the business 3 months to pay. What happened next? SCENARIO CARDS 4 The business sells inventory (which originally cost 5,000) for 5,000 to another business allowing the business 3 months to pay. What happened next? SCENARIO CARDS 4 The business sells inventory (which originally cost 5,000) for 5,000 to another business allowing the business 3 months to pay. What happened next?

10 SCENARIO CARDS 5 The business purchases some new land for future development which is fully funded by the issue of 20,000 worth of shares. What happened next? SCENARIO CARDS 5 The business purchases some new land for future development which is fully funded by the issue of 20,000 worth of shares. What happened next? Non- Non- 20,00 increase Total Equity Total Equity SCENARIO CARDS 5 The business purchases some new land for future development which is fully funded by the issue of 20,000 worth of shares. What happened next? Non- Total Equity SCENARIO CARDS 6 The business decides to sell a disused factory (valued at 20,000) for 20,000 cash. What happened next? Non- Net 20,000 decrease SCENARIO CARDS 5 The business purchases some new land for future development which is fully funded by the issue of 20,000 worth of shares. What happened next? Non- Total Equity Non- Net SCENARIO CARDS 6 The business decides to sell a disused factory (valued at 20,000) for 20,000 cash. What happened next? 20,000 decrease SCENARIO CARDS 6 The business decides to sell a disused factory (valued at 20,000) for 20,000 cash. What happened next? SCENARIO CARDS 6 The business decides to sell a disused factory (valued at 20,000) for 20,000 cash. What happened next? Non- 20,000 decrease Non- 20,000 decrease Net Net

11 SCENARIO CARDS 7 Due to an increase in bank overdraft charges the business decides to clear 10,000 of its existing overdraft using cash. What happened next? SCENARIO CARDS 7 Due to an increase in bank overdraft charges the business decides to clear 10,000 of its existing overdraft using cash. What happened next? Non- Non- 10,000 decrease 10,000 decrease 10,000 decrease 10,000 decrease SCENARIO CARDS 7 Due to an increase in bank overdraft charges the business decides to clear 10,000 of its existing overdraft using cash. What happened next? Non- 10,000 increase 10,000 increase SCENARIO CARDS 8 The business sells some more inventory (which originally cost 5,000) for 5,000. It received 2,500 cash and the other 2,500 is on credit. What happened next? Payables 2,500 increase 2,500 increase SCENARIO CARDS 7 Due to an increase in bank overdraft charges the business decides to clear 10,000 of its existing overdraft using cash. What happened next? Non- Payables 10,000 decrease 10,000 increase SCENARIO CARDS 8 The business sells some more inventory (which originally cost 5,000) for 5,000. It received 2,500 cash and the other 2,500 is on credit. What happened next? SCENARIO CARDS 8 The business sells some more inventory (which originally cost 5,000) for 5,000. It received 2,500 cash and the other 2,500 is on credit. What happened next? SCENARIO CARDS 8 The business sells some more inventory (which originally cost 5,000) for 5,000. It received 2,500 cash and the other 2,500 is on credit. What happened next? 2,500 decrease 2,500 decrease Payables Payables

12 WHAT HAPPENED NEXT? SCENARIO/TEACHERS ANSWER SHEET SCENARIO 1 The business wants to purchase a new delivery van (worth 5,000) in order to deal with an increase in demand for their products. The business decides to purchase this vehicle by increasing their overdraft by 5,000. What happened next? Non- Net Correct answer. Net assets would remain the same as the increase in non-current assets has been off-set by the increase in current liabilities. Non- Net Incorrect answer. The business has increased both its non-current assets as well as its current liabilities. WHAT HAPPENED Non- Net Incorrect answer. Vehicles are a non-current assets. Current assets are those assets that can be quickly turned into cash. Non- Net Incorrect answer. Non-current assets and current liabilities would increase but net assets would remain the same. NEXT? SCENARIO/TEACHERS ANSWER SHEET SCENARIO 2 The business decides to purchase 5,000 worth of inventory in cash. What happened next? Non- Net Non- Net Correct answer. There is no change to current assets as the increase in inventory has been off-set by the decrease in cash. Incorrect answer. and stock are both current assets therefore current liabilities would not increase. Also, the increase in inventory will be off-set by the decrease in cash. Non- Net Non- Net Incorrect answer. Net current assets would not increase. One type of current asset, inventory, has increased however cash has decreased. Incorrect answer. The business has used 5,000 of cash which is a current asset however it has bought 5,000 of inventory which is also a current asset.

13 WHAT HAPPENED NEXT? SCENARIO/TEACHERS ANSWER SHEET SCENARIO 3 One of the businesses creditors has contacted the business asking it to repay the 8,000 it owes it. The business increases its overdraft by 8,000 in order to make the repayment. What happened next? Net Net 8,000 decrease 8,000 increase Correct answer. The business has simply increased one type of current liability to pay off another therefore there would be no change. Net 8,000 increase 8,000 decrease Incorrect answer. There would be no decrease in current liabilities as the business has increased its overdraft by the same amount. WHAT HAPPENED NEXT? SCENARIO/TEACHERS ANSWER SHEET Incorrect answer. Both the overdraft and creditors are current liabilities therefore there would be no change to current assets. Net 8,000 decrease 8,000 decrease Incorrect answer. Although current assets would stay the same there is no decrease in current liabilities or net current assets. SCENARIO 4 The business sells inventory (which originally cost 5,000) for 5,000 to another business allowing the business 3 months to pay. What happened next? Correct answer. The business has reduced its inventory by 5,000 and increased its receivables by 5,000 therefore there is no change to current assets. Incorrect answer. has fallen by 5,000 and there has been no decrease in cash. Incorrect answer. Current assets would not decrease as although inventory has fallen by 5,000 receivables has increased by 5,000. Incorrect answer. Current assets would not increase as although receivables has increased by 5,000 inventory has fallen by 5,000.

14 WHAT HAPPENED NEXT? SCENARIO/TEACHERS ANSWER SHEET SCENARIO 5 The business purchases some new land for future development which is fully funded by the issue of 20,000 worth of shares. What happened next? Non- Total Equity Non- Total Equity 20,00 increase Correct answer. Fixed assets would increase which would cause the firms net assets to increase. This has been funded by share issue leading to an increase in total equity. Non- Total Equity Incorrect answer. Land is not a current asset. WHAT HAPPENED Incorrect answer. Land is a fixed assets therefore there would be no change to current assets. Non- Total Equity Incorrect answer. Total equity would increase as the purchase has been funded by share issue. NEXT? SCENARIO/TEACHERS ANSWER SHEET SCENARIO 6 The business decides to sell a disused factory (valued at 20,000) for 20,000 cash. What happened next? Non- Net 20,000 decrease Non- Net 20,000 decrease Correct answer. There would be no increase in net assets as the reduction in non-current assets has been off-set by an increase in current assets. Incorrect answer. A factor is a fixed asset therefore non-current assets would decrease. Non- Net 20,000 decrease Non- Net 20,000 decrease Incorrect answer. There would be no increase in firm s net assets as the reduction in non-current assets has been off-set by the increase in current assets. Incorrect answer. There would be no increase in net assets as the reduction in non-current assets has been off-set by the increase in current assets.

15 WHAT HAPPENED NEXT? SCENARIO/TEACHERS ANSWER SHEET SCENARIO 7 Due to an increase in bank overdraft charges the business decides to clear 10,000 of its existing overdraft using cash. What happened next? Non- 10,000 decrease 10,000 decrease Non- 10,000 decrease 10,000 decrease Correct answer. Net assets would remain the same as the business has simply reduced its current liabilities by the same amount as its current assets. Non- 10,000 increase 10,000 increase Incorrect answer. The business has reduced its current assets by using cash to reduce its current liabilities. WHAT HAPPENED Incorrect answer. is a current asset and therefore non-current assets would remain the same. Non- 10,000 decrease 10,000 increase Incorrect answer. The business has reduced its current liabilities by reducing its overdraft by 10,000. NEXT? SCENARIO/TEACHERS ANSWER SHEET SCENARIO 8 The business sells some more inventory (which originally cost 5,000) for 5,000. It received 2,500 cash and the other 2,500 is on credit. What happened next? Payables 2,500 increase 2,500 increase Payables Correct answer. The businesses cash position would only increase by 2,500 as the other 2,500 will be received later (meaning an increase in receivables). Incorrect answer. Only 2,500 cash has been received not 5,000. Also, creditors wouldn t increase only receivables. Payables Payables 2,500 decrease 2,500 decrease Incorrect answer. would decrease by 5,000 but cash would only increase by 2,500. Incorrect answer. Both cash and receivables would increase.

16 WHAT NEXT? HAPPENED BALANCE SHEET BEFORE Non- Land 60,000 Building 100,000 Machinery 50,000 Vehicles 35,000 Total Non- 245,000 30,000 20,000 12,000 Total 62,000 Payables 30,000 Overdraft 14,000 Total 44,000 Net 18,000 Non- Bank Loan 60,000 Mortgage 50,000 Total Non- 110, ,000 Equity Share Capital 33,000 Retained Profit 120,000 Total Equity 153,000

17 WHAT NEXT? HAPPENED BALANCE SHEET AFTER Non- Land Building Machinery Vehicles Total Non- Total Payables Overdraft Total Net Non- Bank Loan Mortgage Total Non- Equity Share Capital Retained Profit Total Equity

18 WHAT NEXT? HAPPENED BALANCE SHEET AFTER SCENARIO 1 Non- Land 60,000 Building 100,000 Machinery 50,000 Vehicles 40,000 Total Non- 250,000 BALANCE SHEET AFTER SCENARIO 2 Non-s Land 60,000 Building 100,000 Machinery 50,000 Vehicles 40,000 Total Non- 250,000 30,000 20,000 12,000 Total 62,000 Payables 30,000 Overdraft 19,000 Total 49,000 Net 13,000 Non- Bank Loan 60,000 Mortgage 50,000 Total Non- 110, ,000 Equity Share Capital 33,000 Retained Profit 120,000 Total Equity 153,000 BALANCE SHEET AFTER SCENARIO 3 Non- Land 60,000 Building 100,000 Machinery 50,000 Vehicles 40,000 Total Non- 250,000 35,000 20,000 7,000 Total 62,000 35,000 20,000 7,000 Total 62,000 Payables 30,000 Overdraft 19,000 Total 49,000 Net 13,000 Non- Bank Loan 60,000 Mortgage 50,000 Total Non- 110, ,000 Equity Share Capital 33,000 Retained Profit 120,000 Total Equity 153,000 BALANCE SHEET AFTER SCENARIO 4 Non- Land 60,000 Building 100,000 Machinery 50,000 Vehicles 40,000 Total Non- 250,000 30,000 25,000 7,000 Total 62,000 Payables 22,000 Overdraft 27,000 Total 49,000 Net 13,000 Non- Bank Loan 60,000 Mortgage 50,000 Total Non- 110, ,000 Equity Share Capital 33,000 Retained Profit 120,000 Total Equity 153,000 Payables 22,000 Overdraft 27,000 Total 49,000 Net 13,000 Non- Bank Loan 60,000 Mortgage 50,000 Total Non- 110, ,000 Equity Share Capital 33,000 Retained Profit 120,000 Total Equity 153,000

19 WHAT NEXT? HAPPENED BALANCE SHEET AFTER SCENARIO 5 Non- Land 80,000 Building 100,000 Machinery 50,000 Vehicles 40,000 Total Non- 270,000 BALANCE SHEET AFTER SCENARIO 6 Non- Land 80,000 Building 80,000 Machinery 50,000 Vehicles 40,000 Total Non- 250,000 30,000 25,000 7,000 Total 62,000 Payables 22,000 Overdraft 27,000 Total 49,000 Net 13,000 Non- Bank Loan 60,000 Mortgage 50,000 Total Non- 110, ,000 Equity Share Capital 53,000 Retained Profit 120,000 Total Equity 173,000 BALANCE SHEET AFTER SCENARIO 7 Non- Land 80,000 Building 80,000 Machinery 50,000 Vehicles 40,000 Total Non- 250,000 30,000 25,000 17,000 Total 72,000 30,000 25,000 27,000 Total 82,000 Payables 22,000 Overdraft 27,000 Total 49,000 Net 33,000 Non- Bank Loan 60,000 Mortgage 50,000 Total Non- 110, ,000 Equity Share Capital 53,000 Retained Profit 120,000 Total Equity 173,000 BALANCE SHEET AFTER SCENARIO 8 Non- Land 80,000 Building 80,000 Machinery 50,000 Vehicles 40,000 Total Non- 250,000 25,000 27,500 19,500 Total 72,000 Payables 22,000 Overdraft 17,000 Total 39,000 Net 33,000 Non- Bank Loan 60,000 Mortgage 50,000 Total Non- 110, ,000 Equity Share Capital 53,000 Retained Profit 120,000 Total Equity 173,000 Payables 22,000 Overdraft 17,000 Total 39,000 Net 33,000 Non- Bank Loan 60,000 Mortgage 50,000 Total Non- 110, ,000 Equity Share Capital 53,000 Retained Profit 120,000 Total Equity 173,000

20 greiner growth grid Phase 1 Growth through Creativity Phase 2 Growth through Direction Phase 3 Growth through Delegation Phase 4 Growth through Coordination Phase 5 Growth through Collaboration Phase 6 Growth through alliances Business Size Time

21 BUSINESS Greiner Growth Grids Resources for Courses Teacher Instructions This is a task designed to introduce students to the Greiner Growth model in a practical and kinaesthetic way. There are a number of stages in the task, and parts of the tasks can be used as a quicker activity or recap if the full task is not required. Timings The full task would take approximately 60 minutes. Teaching and Learning strategy 1 Students are organised into groups and given the A3 Greiner Growth Grid and cards with the various crisis descriptions. Their first task is to attempt to match the various growth stages on their grid. The teacher will feedback the correct answers and at this point the students have a good understanding of the model and the stages involved) 2 Groups will then be given the Hot Hair case study about the start up of the business. Using the stages of growth and the crisis stages, the groups will work on a what happened next task, where they come up with examples of how the business may have developed following the case study, and the growth and crisis stages that may have occurred 3 Using post-it notes, the students will then go back to the A3 grids and offer possible solutions for each crisis stage, advising Hot Hair on how they could overcome their issues and sticking these against the relevant part of the models Strategies for differentiation The task could offer stretch and challenge with an evaluation of the suggestions of how the business could overcome the growth crisis stages.

22 greiner growth grids Growth cards Resources for Courses Leadership Crisis The business has grown quickly and become more complex, as a result the original owner is unable to co-ordinate and control activities by themselves and a new structure is needed Red Tape Crisis This happens when the business introduces too many rules to introduce control, and the rules make the company too inflexible and rigid Autonomy Crisis Due to further growth, the co-ordination problems become too large for the original owner and the middle managers need more control and autonomy Growth Crisis Increased collaboration means that supervision and control decline sharply and the larger business is difficult to control and co-ordinate Control Crisis There are more divisional managers which makes it more difficult to coordinate all the divisions towards common goals as managers plot their own course

23 HotHair Martha had always had a passion for style and a flair for design. She studied for A Levels in Art and Media, but decided to start her own hair salon rather than go to University to study design. In 2014, using savings and loans from her family, she opened her first salon Hot Hair and operated as a sole trader. She quickly built up a loyal customer base due to her high quality personalised service. Martha met Andre whilst attending a hair design product conference in London. Andre had recently qualified as a barber and was looking for premises in the same area as Martha s salon. Martha was keen to offer barbering at the salon to expand her customer base, so the pair decided to form Hot Hair Ltd, with Andre receiving 35% of the shares. Andre had already conducted market research in the area to gauge the interest and prices that men would be willing to pay for his barbering services. He also found that couples liked the idea of being able to visit the salon together, and the pair therefore believed that offering couples deals and packages would give their salon a unique feature. Martha and Andre believed that demand for their salon was going to be very high but potentially seasonal, so they planned to employ staff on flexible contracts. They were both very ambitious and drew up their business plan with some key objectives for the salon: To increase customer numbers by 30% for the next 3 years To open two more salons in nearby towns in the next two years To grow their brand through a reputation of a unique and personalised service Market research suggested the pair should be cautious due to the high level of competition in the local area.

24 greiner growth grids TASK: WHAT HAPPENED NEXT? Resources for Courses Use the Greiner Growth stages and crisis stages to write what may have happened next as Hot hair developed as a business: Phase 1: Growth through creativity Phase 2: Growth through direction Phase 3: Growth through delegation Leadership Crisis Autonomy Crisis Phase 4: Growth through coordination Control Crisis Phase 5: Growth through collaboration Red Tape Crisis Phase 6: Growth through alliances Growth Crisis