Success Factors M&a

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Ben and Jerry’s in early years

(ORGANIC)

Ben and Jerry’s Today

(MECHANISTIC)

- Broad Specialization

- Multilevel, Cross functional teams

- Multi-channel command

- Wide spans of control

- Decentralization

- Low formation

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- High specialization

- Rigid departmentalization

- Clear chain of command

- Narrow span of control

- Centralization

- High formation

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But in the later years the cultural model changed to hierarchical corporate culture which has a fairly rigid and fixed organizational structure.

Factors that led to this change are as follows:

- Growth for the survival of the company - During 1980s, the market for ice crème was maturing. Hence it became necessary for the company to focus on growth so as to survive in the market and retain its position on supermarket shelves

- New Competitors - Entry of the new competitors in the ice crème market is another factor that led to the increased focus on growth which brought in cultural changes

- Public Issue in 1985 – Focus on growth compelled Ben & Jerry to go public in 1985. To remain consistent with company’s community focus, it sold its shares only to Vermonters. Hence there was increased pressure on Ben & Jerry to fulfill the interests of the stockholders who were their friends and neighbors. 40% slowdown in profits

- Change in the company strategy – Earlier the business strategy of Ben and Jerry focused on collaborative culture and social change rather than profit making. However growing importance to expansion led to shift from company’s original mission to the mechanistic environment

- Increased competitiveness – Pressure of growth led to bringing in new culture and environment in the company. It started adopting new tools such as promotion, cost control measures, qualified staff recruitment.

Q6. If you were a management consultant what advice would you give to Ben Cohen?

Ans6. Since there were lot of organizational changes as it was growing year on year. Ben Cohen could have implemented Kilmann's Five Tracks Model. This model helps in scheduling and implementing the “tracks”. This model entails intervening in five critical leverage points (called tracks) found in all organizations, that, when functioning properly, cause the organization to be successful.

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The five tracks are as follows:

1. The Culture Track: This track enhances trust, communication, information sharing, and willingness to change among members. The conditions that must exist before any other improvement effort can succeed. With regards to the case, the cultural changes in organization after growth strategy could be first communicated before the changes were implemented.

2. The Management Skills Track: It provides all management personnel with new ways of coping with the complex problems and hidden assumptions. As in the case we could notice that first monthly meetings made production line stop so that the views of the employees could be taken but after growth it was just one way communication i.e. from management to employees. There was growing stress on meeting goals. This could be handled by taking into consideration, the new ways of coping with new management skills.

3. The team building Track: It infuses the new culture and updated management skills into each work unit- thereby instilling organization-wide cooperation so that complex problems can be addressed with all the expertise and information available.

4. Strategy-Structure Track: It develops either a completely new or a revised strategic plan for the firm and aligns divisions, departments, work groups, jobs and all the sources with the new strategic direction.

5. The Reward System Track: It establishes a performance based reward system that sustains all improvements by sanctioning the new culture, the use of updated management skills, and cooperative team efforts within and among all work groups.