Initially the Cyclermate was on the top of the world with remarkable sales and outstanding profit margins. The company build its name but as a result of poor organisation structure and poor organization culture this did not last long. The organization if being faced with a number of financial and social cultural issues including; being in dept, the threat of being sued for damages caused to a customer who used a product that was wrongly assembled. This will spoil the reputation of the organisation and loose most if not all of its customers.
One of the social issue that is affecting Cyclermate is it’s cooperate management. The organisation is owned by family member with Lewis Llewellyn, Linda Llewellyn and Dai Armstrong being the main corporate share holders. The problem with this ownership is the wrangles between Lewis Llewellyn and his divorced wife Linda Llewellyn.
Linda Llewellyn invested a legacy from a family member and in return she was given shares. She has been recently bothering her former husband to return back her money failure to which she demanded a third of the value of the entire business. In addition to this Geraint former colleague invested a good share of his redundancy to the business. Before he retired he used to lend a helping hand in the operation of the business. This however is not possible since he takes care of his wife and relies on the loan interest for his survival. This is tricky to the business since these must be set aside and it’s likely to inconvenience the business operations.
The company has had a drop in its profitability therefore affection its social status. It is undergoing financial crisis and the bank manager is sceptical about the increasing overdraft facilities unless the company financial position is adjusted in the coming year. A number of meeting held highlighted that the company sales are significantly dropping despite the increased urge for people to abandon their vehicle and turn to bicycles or otherwise (there is an increased cycle market)
This was attributed the poor reputation that the company has been experiencing for poor quality production something that is affecting the company profitability and growth as well. The company is having a poor organisation structure with insufficient employees and this is the main reason why the quality of it cycles are deteriorating. However the management is in a dilemma on whether to employee more staff since this would translate to increased cost of the total employees to be paid.
Mr Llewellyn being at the top of the management is less concerned with the recovery of the business. Instead of devising means to save the business back into track he admits that the cycle shops are closing and he is convince that it’s time to accept defeat and close down or sell to another firm that assembles cycle. With such a manager at the top of the organization it is bound to collapse since he puts little or no efforts to salvage the situation. His major concern is to sell the company, clear the debt and recover his investment so that he can pay his ex-wife and get her off his back. Mr Llewellyn is no longer motivated to work and consider his work stressful. Such a manager cannot motivate other employees and will only send then packing before the company collapses.
Mr Armstrong on the other hand is determined to salvage the company’s situation. He is torn between hiring a short-term consultant to offer advice but then that is an increased cost. He gives various options that include adopting a strategic direction of the business, production methods, or new technologies.
A meeting with the bank give the employee opportunity to explore options. Some employees are innovative and are suggesting modernisation of the existing product. Even with such innovative ideas that might salvage the company Morgan is still adamant. Some employees who work on the existing product feels that they are undervalued and are opting to exit the company which will be more problematic. One can only hope that the meeting brings forth a workable solution.