Acme corporation has had recent problems with increased turnover of employees and decreased profitability. However, leadership is not sure exactly what the problem is or what to do about it. Senior managers have been arguing for many months about what to do, but it is clear that leadership does not have a strategy to get the company back on track. The company (prior to organizational changes) had 24 sales associates that averaged $423,000 in combined sales each month with a profit margin of 32%. This breaks down to a monthly sales average of $17, 625 per sales associate.
Since the changeover, the employees are stretched thin and have become demoralized as management has been slow to respond to the turnover and has increased pressure to exceed monthly goals. The average monthly sales have steadily decreased for six months after the new Chief Executive Officer (CEO) replaced the vice president of sales, two sales directors, and six sales managers with employees from another organization. The Vice President, directors, and managers have yet to establish
relationships, are not very engaging or motivating, have more of a transactional style of leadership, and micro-manage every detail of the sales associates performance. The following table shows company sales performance since January of this year and includes month, number of staff, average sales, profit percentage and total profit.
Month Sales Staff Sales Profit % Profit $
January 20 $322,800 32% $103,296
February 19 $321,100 32% $102,752
March 18 $318,500 32% $101,920
April 18 $267,900 32% $85,728
May 15 $260,500 32% $83,360
June 12 $247,700 32% $79,264
Please use the scenario and the table above to answer the following questions (support each section with sources from the required and optional readings list):
a. Introduce your paper with your thoughts on the scenario and why it happened.
b. Explain which organizational change model (Kotter’s Eight-Step, Lewin’s Three-Step, or the Stages of an Action Research Project) would be most suited for this scenario supporting your decision and response with a source from the required or optional readings list.
c. Provide a solution to the scenario and build a plan of action for this organization using the individual steps of your chosen change model.
d. Use and fill in the table below with your expected forecast potential to show growth in sales staff, sales, and total profit from July through December. Use the formula below the table (New Month Sales x 32% = __), to calculate expected sales and profit percent for an increase in profit dollars for Acme Corporation.