Management Report Esprit

Introduction to Management and Research Methods EFO249 Fall 2009 Group Project : Final Management Report Company: International Marketing Group 6 International Marketing: Friederike Busch : fbh09002 Wiwatchai Jirawattananukool : wjl09001 Saruta Cholviroj: scj09001 Himmet Baran : hbn09004 Tutor : Tobias Eltebrandt 1 Table of Content 1. Introduction …………………………………………………………………………………………………………………. 1 1. 1 1. 2 1. 3 1. 4 2. Purpose of this Management Report ( ………………………………………………………………………… Research Question …………………………………………………………………………………………………. 1 Strategic Question ……………………………………………………………………………………………………. 1 Critical Literature Review …………………………………………………………………………………………. 2 The Company‘s History ………………………………………………………………………………………….. Financial Overview …………………………………………………………………………………………………. 4 Esprit Holdings Ltd. Overview ………………………………………………………………………………………… 3 2. 1 2. 2 3. Research Methodology: Framing ……………………………………………………………………………………… 5 3. 1 3. 2 3. 3 Structural Frame ……………………………………………………………………………………………………… Human Resource Frame …………………………………………………………………………………………. 7 Political Frame ……………………………………………………………………………………………………….. 9 …………………………………………………………………………. 9 3. 3. 1 Organizations as a Political arena 3. 3. 2 Managers as Politicians …………………………………………………………………………………………. 10 3. 4 3. 5 4.

Hire a custom writer who has experience.
It's time for you to submit amazing papers!


order now

Symbolic Frame ……………………………………………………………………………………………………. 11 Summary ………………………………………………………………………………………………………………. 12 Findings and Analysis ……………………………………………………………………………………………………. 13 4. 1 Findings regarding the Structural Frame ……………………………………………………………………. 13 Hierarchy and Division of Labor …………………………………………………………………….. 13 Coordination ………………………………………………………………………………………………….. 13 Organizational Structure …………………………………………………………………………………. 14 Structure, Restructure and Environment ……………………………………………………………. 14 4. 1. 1 4. 1. 2 4. 1. 3 4. 1. 3 4. 2 Human Resource ………………………………………………………………………………………………….. 5 Maslow’s Hierarchy of Needs……………………………………………………………………………. 16 4. 2. 1 4. 3 Organizational Politics …………………………………………………………………………………………… 18 Moral Responsibility ……………………………………………………………………………………….. 18 4. 3. 1 4. 4 Findings regarding the Symbols ……………………………………………………………………………….. 19 Organizational Vision and Culture …………………………………………………………………… 9 Leading Principles …………………………………………………………………………………………… 20 4. 4. 1 4. 4. 2 5. Conclusion and Recommendation ………………………………………………………………………………….. 21 5. 1 5. 2 5. 3 Research Conclusion ………………………………………………………………………………………………. 21 Strategic Conclusion……………………………………………………………………………………………….. 1 Recommendation ……………………………………………………………………………………………………. 22 Reference List ……………………………………………………………………………………………………………………… 24 1 1. Introduction This report is a part of the course EF0249, ? Introduction to Management and Research Methods‘. It utilizes the theories from the book of Bolman and Deal which describe the organizational management and the organizational frames. This report studies the management of Esprit Holdings Ltd1. one of the biggest apparel and fashion companies in the world. It manufactures and distributes men, women, and children’s apparel, including accessories. They have achieved outstanding business performance, expanded their business globally and effectively within a few decades and have gained great popularity within their target market. 1. 1 Purpose of this Management Report The purpose of this report is to study the organizational structure and management of Esprit as well as to uncover the reasons why Esprit became remarkably successful and has one of the top positions in the apparel market.

Furthermore, analysis of the company should also indicate the factors that led to its success and to global growth. 1. 2 Research Question This report contains research on Esprit, focusing on its organizational structure. This will be analyzed through investigation of its management structure, human resource and political challenges and other symbolic aspects of the company. The research will focus on overall management and leadership concepts in the company and will leave out specific topics such as marketing, logistics, finance and accounting or other parts of the management. . 3 Strategic Question This report aims to use four perspectives to look on the company‘s management. The different frames shall help to suggest what Esprit could do to improve their competitive advantage in the apparel market. 1 The full name of the company is Esprit Holdings Ltd. but for simplicity reasons in this report the company will be referred to as Esprit. 1 1. 4 Critical Literature Review This report is oriented around the theories presented in the book “Reframing Organizations” by Bolman and Deal.

The research in the report is supported with secondary data, including both facts directly from official company information sources but also articles from reputable magazines and journals. The articles shall help to analyze the company with a more objective, unbiased perspective. Additionally, the book “Researching and Writing a Dissertation” by Fisher was used as a guideline for conducting the research and organizing the structure of the report. Suggestions included on how to evaluate the viewed literature supported the judgment of the quality of the research material ({Fisher 2007 #17}p. 2f. ). Some information could only be gathered from the company‘s webpage www. espritholdings. com. The authors of the report are aware of the fact that only company‘s information can‘t be considered as objective information. Due to lacking time restrictions the research couldn‘t be extend, so further research on especially the political frame is required. The research in the report is not complete; however, information found will enable the authors to answer the strategic questions and to formulate recommendations for Esprit holdings directing the maintenance of their competitive advantage.

Furthermore it should be mentioned that some information found didn‘t fit the purpose to answer the strategic question of this report. Literature about the company‘s product tactics and marketing strategies, for example, were helped to give the authors of this report an understanding of the company‘s business but didn‘t actually support the research on the question about leadership and general management. 2 2. Esprit Holdings Ltd. Overview Esprit describes itself as “an international youthful lifestyle brand offering smart and affordable luxury and bringing newness and style to the life of our customers”{Esprit Global Image GmbH #12}.

Esprit is a global company that is operating in the wholesale and retail distribution, as well as in licensing and sourcing of fashion, accessories and house-ware. The company sells its products either through one of the approximately 690 directly managed retail shops or on a ? shop in shop? base. There are currently about 14. 500 wholesale point-of-sale shops that sell Esprit in Europe, United States of America and Asia. Esprit has stores in over 40 countries all over the world {Esprit Global Image GmbH #12}, with its global finance headquarters based in Hong Kong and its Global Business Headquarters in Ratingen, Germany.

Esprit‘s product range encompasses 12 lines, which include women, men, kids fashion, shoes, furniture, cosmetics, sports fashion, amongst others. Cosmetics are the only product line licensed separately under the brand ? Red Earth?. More than 20,000 products are designed for Esprit every year {Esprit Global Image GmbH #11} Esprit‘s highest success is based on sales in Europe, especially in Germany. In 2000, the company was awarded with the German ? Forum-Preis? to acknowledge the entrepreneurial achievements.

Additionally an independent brand survey found out that Esprit has a brand awareness of 84% in Germany and is ranked 52nd on a list of the most recognized brands in America in 2001 {Biography Doug Tompkins 2007 #8}. 2. 1 The Company’s History Esprit was founded in 1968 in San Francisco. The couple Susie and Doug Tompkins started their first clothing business under the name “Plain Jane Dress Company” and sold the clothes out of their car. The business became successful and in 1971 the company renamed into “Esprit de corps”.

In 1974, Esprit owner Tompkins formed a partnership with the Chinese business man Michael Ying and the company started to outsource the whole production sector to China. Four years later, in 1978, Esprit enlarged the business and entered the European, as well as the Asian market. In 1979 Esprit introduced the today well known logo and also opened its European headquarter in Ratingen, Germany. During the 70s and the 80s, Esprit was very successful; the brand became more and more popular as sales grew until they reached US $700m in 1985. (Company Profile, Esprit de Corp).

In the late 80s and early 90s, Esprit began to show financial strain as their sales dropped. Reasons were said to be competitors who copied Esprit‘s image and who sold clothes in the same style as Esprit, but for a lower price (Company Profile, Esprit de Corp). Furthermore, there were some management problems in the company, leading to a near-downfall. The turnabout came 1996 when the new (and still current) chairman and CEO, Heinz Krogner joined the company. He restructured many parts of the company and brought Esprit back to success.

Under the management of Krogner Esprit Asia Holdings acquired Esprit Europe and Esprit Source in 1997 and combines all three brands to a global brand which was renamed into Esprit Holdings Ltd (Zentes, Morschett, Schramm-Klein, p. 64). The global brand strategy was completed when Esprit Holdings brought the US and Caribbean trademark rights in 2002. Today Esprit is one of the fastest growing retail companies in the world. 3 2. 2 Financial Overview In 1993 Esprit was listed at the Hong Kong stock exchange. Michael Ying, the main shareholder, who holds 42 percent of Esprit Holding Ltd. s also ranked on the Forbes list of the 500 richest men, as his assets are estimated on US $ 2,7 billion. Up to the year 2008 Esprit had increasing incomes and revenues every year, but due to the recent financial crisis Esprit‘s revenues and shares dropped in 2009. In 2008 the total revenue was US $ 37,2 billion, which was an increase of more than 11% compared to the previous year (revenue in 2007 was US $ 29,64 billion). In June 2009 revenue wasn’t quite as high; it dropped to US $ 34,49 billion but is still higher than 2007 (Businessweek). 4 3.

Research Methodology: Framing Bolman and Deal refer in their book ?Reframing Organizations? to frames as perspectives to look on organizations. “Like maps, frames are both windows on a territory and tools for navigation. ”{Bolman 2003 #13} p. 13 By this statement Bolman and Deal are explaining that it is necessary to understand that every person has a different frame, or map, in their head, hence every organization works with different frames. The authors found four frames that enable managers to understand the complexity of any organization. In this report all frames will be applied to Esprit.

The structural, human resource, political and symbolic frame show the different angles that form the complexity of organizations. These four perspectives will be analyzed in order to understand Esprit‘s success. As mentioned by Bolman and Deal, frames are a ? tool for navigation? , showing that the four frames can be used to solve problems. The frames help to adopt a multi-perspective view which leads to a greater understanding. The aim of this report is to understand not only the way the company is conducting business, but also to establish a recommendation for Esprit to develop a competitive advantage.

Furthermore the analysis of the company in respect to the Bolman and Deal frames will give the opportunity to indicate where reframing might be appropriate. Table 1: Source: Bolman and Deal p. 16 The table above indicates that each frame has its own reality {Bolman 2003 #13} p. 15. The frames are not only a good tool to understand situations and connections in a complex company, they also provide strategies due to different concepts and perspectives. 3. 1 Structural Frame The first frame analyzed in this report will be the structural frame. The structural frame emphasizes goals, specialized roles, and formal relationships”{Bolman 2003 #13} p. 14 The structural frame is one of the most common perspectives looking at an organization. This 5 frame is a very rational and logical perspective on organizations. As the name of the frame already indicates, the angle of view in that case focuses on clear structures that enable the company to achieve its goals. According to Bolman and Deal the structural frame underlies six assumptions {Bolman 2003 #13} p. 45 “1. Organizations exist to achieve established goals and objectives. . Organizations increase efficiency and enhance performance through specialization and a clear division of labor. 3. Appropriate forms of coordination and control ensure that diverse efforts of individuals and units mesh 4. Organizations work best when rationality prevails over personal preferences and extraneous pressures. 5. Structures must be designed to fit an organization’s circumstances 6. Problems and performance gaps arise from structural deficiencies and can be remedied through analysis and restructuring.? {Bolman 2003 #13} p. 45

In every organization there are always two basic tensions {Bolman 2003 #13} p. 49. The division of labor and the allocation of roles and work can be challenging for the company. Differentiation and integration of work areas, responsibilities and specifications have to be adapted in a way that the company‘s goal can be reached. As soon as the allocation of employees is determined, responsibilities and authorities have to be decided. The integration of work areas can be for example based on knowledge or time (e. g. shift work) or productorganized, and so forth. {Bolman 2003 #13}p. 9f Coordination of the newly-defined units is another factor in a company‘s structure. According to Bolman and Deal there are two ways of coordination; vertical and lateral. Vertical refers to a structure that authority and rules are controlling the work. The structure is coordinated in levels, higher levels have more authority than lower levels. Lateral coordination, in contrary, is more flexible and depends less on authority and policies. Informal meetings, networking or coordinating groups are typical of lateral strategies. Above this all stands the general design of the organizational structure.

The steps mentioned so far are the basis of every structure that management has to decide how to allocate and coordinate workers. For the general design Mintzberg has found out five major elements that lead to different forms of structure; these components are “strategic apex, middle management, operating core, technostructure, and support staff” {Bolman 2003 #13}p. 92. The operating core describes the basic work that is been done in a company, whereas the strategic apex is the administrative component on top of the management structure.

Alongside the administrative element there is the middle management, as well as the technostructure and the support staff. Technostructure is responsible for the measurement of the outline and analyzing processes. The organizational form depends on how the structure of the five components is arrayed, leaving out the middle management and consisting only of the strategic apex and the operating core. Machine Bureaucracies have a large support staff and technostructure, so there are “many layers between the apex and operating levels”{Bolman 2003 #13}p. 75.

The divisionalized structure has a top management and many units (divisions) that work more or less autonomously. Adhocracy is a very flexible structural form that is characterized by an unclear management structure. The structure chosen should 6 ideally support managers of an organization to balance the company‘s‘ goals with workforce, technology and environment. Figure 1: Mintzberg‘s Model; Source: Bolman and Deal, Reframing Organizations, 2003, p. 74 The key point of Bolman and Deals structural frame in the book “Reframing Organizations” is restructuring.

If, for example, the structural tensions (differentiation of labor, integration of labor) are breaking up or if the environment that formed the structure is changing than the company should draw the conclusions and restructure the organization. Mintzberg‘s models of structure can be adapted to the circumstances. Restructuring doesn‘t guarantee success but sticking with an old structure in a new environment is not likely to lead the company to successful numbers either. Hence, restructuring is always a risk. {Bolman 2003 #13}p. 82ff. 3. 2 Human Resource Frame Human resource plays one of the most important roles in the company.

The human resource frame concentrates mostly on how characteristics of organizations and people shape what they do for one another. (Bolman 2003, P. 111) The human resource frame is built on core assumptions and it requires a sensitive understanding of people‘s relationship with the organization. For the employee, they will have questions in there mind of how well the organization is able to fullfill employees‘ needs. And for the organization, they will need to find the way to recruit and retain people with the organization‘s requirement on employee skills and attitudes in order to do the work. Bolman 2003, P. 115), According to Maslow’s Hierarchy of Needs, human needs can be classified into 5 levels, which are physiological, safety, love/belonging, esteem and self-actualization. 7 Figure 2 Maslow’s Hierarchy of Needs Source: ? Essentials of management? by Koontz, H. ; Weihrich, H. 1. Physiological needs are the basic needs for living such as oxygen, water, food, physical health and comfort. 2. Safety needs include personal security to be safe from danger, attack and threat. 3. Belongingness and love are the needs for positive and loving relationships with other people. . Esteem needs include the needs to feel valued and to value oneself. 5. Self-actualization are the needs to develop to one‘s fullest, to actualize one‘s potential. After all the relation between human resource management and firm level performance outcomes, integrating with Bolman and Deal‘s human resource framework consists of some steps such as build system and implement human resource management strategy, Hire the right people, Keep them, Empower them, Promote diversity {Bolman 2003 #13} p. 36 Because of fast changing environment and markets, companies need more to focus on organized and well developed human recourse systems and well integrated group and individual working process. In this regard a human resource strategy is mostly about employee selection, communication, training, career development, rewards, and performance evaluations. The changing of the market units convey a change in customer expectation. The customer wants to see service and product quality so the selection of the employee regards to what kind of job and what kind of person will be hired.

On the other hand who fits the job might lead to integration of the company goal, employee expectation and customer satisfaction. For keeping good employees in the company, some conditions take over importance such as encouraging employees and rewarding them as well as , protecting their jobs, or promote within, and share the wealth. Basic financial rewards and protect jobs, 8 promote within policy and share the wealth with employees are important factors in this regard. {Bolman 2003 #13} p. 137-138 In general, education and learn on the job within business became more and more important.

From time to time special needs arising from technical, legislative, and knowledge need changes. Therefore all on the job are learning need to be done in a way of re-investing human capital for a company. {Bolman 2003 #13} p. 142 For empowering of employees Provide information is a strategic key. All employees at every level should see and learn to understand financial and performance measures and conditions of the business. {Bolman 2003 #13} p. 143 A positive diversity culture within the workplace is primarily because it makes good business sense.

Therefore, employers are willing to create such a diversity-friendly work environment. The term of diversity undertakes more important role in the multinational company which is combine different race, religion gender and so on. ({Bolman 2003 #13} p. 153 3. 3 Political Frame Organizations include a range of groups as well as individuals who have different backgrounds, beliefs, attitudes, skills, and imaginations of ideas. At this point, Bolman and Deal‘s political frame can be used as a guidance of examining the right decision making process.

It can be seen as coalitions, enduring differences among coalition members, important decisions involve allocating scarce resources, and power the most important asset, goals and decisions. . {Bolman 2003 #13} p. 186 Even though organizations include a numbers of different individuals, groups, ideas, beliefs, are doing job, etc. it should consist of coming all together to achieve their goal or their mission. # 3. 3. 1 Organizations as a Political arena Organizations seem to have a hierarchical relationship, where there are top decision makers, referred to the upper level workers, and contrary lower level workers.

Contra dictionary, a coalition of organizations does not seem to be simply as a hierarchical structure, but it is a platform where decision making is being done by all party contributions. Thus, power is not sharply collected by one person or a group, instead it is widely shared. This can make a coalition in the organizations In the organizations when coalitions are accomplish then it simply lead managers to make advantages of diversity which comes from different individuals‘ contributions. Thus leads to a more efficient and proper decision making process.

Amongst the facts mentioned above any type of organization have to some extend the problem of scarce recourses which stems from limits on time, money or staff and mostly they stems from outside of organizations such as market, political process. Each of these resource problems forces managers to regularly choose between their own beliefs and their organization. 9 In the Bowman and Deal‘s political framework, conflicts are not necessarily a problem, but natural and inevitable. Here, the key is to use power to navigate with conflicts, thus power is defined as an asset.

According to Bolman and Deal there are many forms of power such as authoritative or personal power to expertise or controlling agendas and rewards. Thus, power is seen as management strategies to control raises, position appointments, and punishments as well as to manage the debated issues and gain support from other coalition forces by using ones influence, expertise or charisma. With a limited resources best way of decision making by enduring differences is that decisions made by competing stakeholders through bargaining and negotiation (2003, p. 187). 3. 3. Managers as Politicians In the political frame managers could be seen in the position of politicians. According to Bolman and Deal the manager should hence meet the following skills: “agenda setting, mapping the political terrain, networking and forming coalitions, and bargaining and negotiating” {Bolman 2003 #13} p. 205. In the structural frame the management structure is accompanied with a goal, whereas in the political perspective the goal can be seen as a vision. The vision is the goal of what to reach, but the goal cannot be reached if there is no guideline on actions set.

Accordingly setting an agenda means that the manager not only has a vision, but that he follows the vision with a strategy. The agenda should ideally show the actions that have to be undertaken in order to achieve the vision, but also has to include the timing and the interests of the main stakeholders {Bolman 2003 #13}p. 205ff. Political maps should include political players and their interests, as well as the power that can be used by each player. Each player might have a different terrain, means they follow up different interests.

The manager‘s role is to first understand the political terrains of each player, considering their authority as well, and then navigate all terrains and bring all terrains to the level of the company‘s interests. {Bolman 2003 #13} p. 207f In order to do so managers are acting politically, which means that they negotiate, deal with interests and authorities and form networks and coalitions. These skills are crucial to navigate between the different interests of the shareholders and the authority‘s influence. Coalitions are relationships with either helpful supporters or potential rivals.

These relationships are important to keep track of the vision and to establish authority. Furthermore managers should not be scared by the alliance with opponents; often it can be even helpful to turn them into allies with an established relationship. Another skill that should come easily to managers is negotiation. In every company the case will occur that two or more parties will not conform and rivalry may happen. In order to avoid inefficient negotiations Fisher and Ury recommend strategies, such as not involving other people‘s personal feelings, or to always focus the strategy and not positions{Bolman 2003 #13}p. 11ff. Morality is also another issue in a company‘s politics. Morality can either refer to ethical behavior towards coalitions or to the opponents. When it comes to negotiations, managers have not only to keep their vision and all the interests in mind, but they also have to choose which strategy to utilize, perhaps influenced by moral judgment. Questions managers can ask themselves regarding their moral judgment, are meant to help them to reflect their own 10 behavior and hence, to guide them to a more ethical tactics in negotiations.

Correct ethical and moral behavior will simplify the process of establishing good (business) relationships, as well as collaborations {Bolman 2003 #13} p. 216ff. Furthermore, organizations play an important role in ecosystems in order to compete with others and to survive in the market. To remain competitive and powerful, organizations need to have politician skills in developing an agenda, mapping its environment, managing relationship with their alliances and enemies, and performing effective negotiation. {Bolman 2003 #13}p. 228-229 3. Symbolic Frame The symbolic frame focuses on how humans make sense of the messy, ambiguous world in which they live. In the Symbolic Frame, the manager of the organization should understand about the symbolic assumptions which are the following: {Bolman 2003 #13} p. 240 1. “What is most important is not what happens but what it means. 2. Activity and meaning are loosely coupled; events have multiple meanings because people interpret experience differently. 3. In the face of widespread uncertainty and ambiguity, people create symbols to resolve confusion, increase predictability, find direction, and anchor hope and faith. . Many events and processes are more important for what is expressed than what is produced. They form a cultural tapestry of secular myths, heroes and heroines, rituals, ceremonies, and stories that help people find purpose and passion in their personal and work lives. 5. Culture is the glue that holds an organization together and unites people around shared values and beliefs. ?{Bolman 2003 #13}p. 242-243 If they understand well about the symbolic assumption, they will be able to make a company‘s meaning to be very strong and the employees will understand the meaning of working in their company.

According to Bolman and Deal, symbols are the basic building blocks of the meaning systems, or cultures, that we inhabit. ?We live in cultures in the same way that fish live in water. ” {Bolman 2003 #13}p. 240 There are lots of employees in one organization and different person always interprets experience differently. The organization should have strong culture and really make it as a symbol of the organization. It is, for example, the manager makes the employees feel so proud that they work in their company and being connected with the company.

The employee will be so proud with the myth and events, and the story of the organization. It is so wonderful in a complex organization but the employees feel the same thing. The employees like the way they contact each other, they way they have a chance to show the skill, they way they solve problems together. It is like a myth. 11 Moreover, it is because of the strong organizational symbol and culture. If the employees feel proud and like the company that they work for, they will devote themselves into working hard and do the best job to the company.

It also can create Heroes and Heroines {Bolman 2003 #13} p. 254 in the organization. The result of the strong culture, vision, and symbol of the organization is a good business outcome and also the growth and the survival of the company. The manager of the organization should have understood about the leading principle also. Some leading principles are for example the understanding on how someone becomes a group member is important. Moreover, diversity supports a team‘s competitive advantage and example, not command, holds a team together. {Bolman 2003 #13}p. 89-290 Referring to Bolman and Deal, managers who understand symbolic forms and activities and encourage their use help shape an effective organization—so long as the organizational culture is aligned with the challenges of the marketplace. ({Bolman 2003 #13}, p. 244) 3. 5 Summary Organizations depend on all kind of circumstances and situations. The frames can help to look on situations from a different point of view. The same situation can be interpreted in four different ways. It depends on the circumstances and on the situation which frame should be used to look at issues.

According to Bolman and Deal there are certain conditions that imply the more effective frame. The usage of multiple frames can help to minimize complexity of situations and control the outcome according to the company‘s goal better. There are variables that help to chose the appropriate frame for the situation. The key variables are: motivation, technical constraints, uncertainty, conflict and way of operation {Bolman 2003 #13} p. 304ff. The table shows which frame should be used in what situation: Source: Bolman and Deal, ? Reframing Organizations? , 2003; p. 310. 12 4.

Findings and Analysis The following section in the report is the result of the literature research. As a guideline for the research the theories of Bolman and Deal, described above, were used. The theory background and the critical literature review brought up the findings about the management structure of Esprit. These findings are crucial for the analysis concerning the report‘s strategic questions; without the conducted research the strategic question can hardly be answered {Fisher 2007 #17}p. 34. Even though the answer to the strategic question “What can Esprit do to improve its competitive advantage? cannot be clearly found in the literature, the findings listed below help to understand the company from different views, hence, the conclusion for the strategic question can be based on that. 4. 1 Findings regarding the Structural Frame Esprit‘s main goal is to maintain growing and to become a world leading fashion company. To reach that goal Esprit‘s business strategy is to establish a global brand. Esprit‘s global management structure was implemented in the mid 1990s when Esprit was going back to become one unified brand{Zentes 2007 #3 }. see p. 64.

This was already achieved in 2002 when Ying brought the American and Caribbean rights and unified Esprit Holdings. Esprit‘s management structure is hierarchically-organised. Esprit pursues a global management structure {Zentes 2007 #3 } p. 64 (see) On top of the company‘s management there is the Chairman and Officer (CEO) Heinz Jurgen Krogner-Kornalik (he will be referred to as Heinz Krogner in this report). He is leading the company. 4. 1. 1 Hierarchy and Division of Labor Esprit is ruled by a board of executive directors who represent the top management in the company.

The board of executive directors has three members, Heinz Krogner, who is not only Group Chief Executive but also Chairman; Ronald Van der Vis, who holds the position of the executive director and the Group CEO Designate; and Chew Fook Aun, who is as well an Executive Director and the Group Chief Financial Officer. {Esprit Global Image GmbH 2009 #4} Each member has different responsibilities in this board. Krogner is responsible for the operational strategic decisions of the Group. Furthermore he holds the positions of the Chairman which leads to the responsibility of leading the management board in a way that they achieve the set goals.

Van der Vis is responsible for the total group and presents directly to the CEO Krogner. His special focus of work is set on the brand positioning and on the corporate identity {Esprit Global Image GmbH #6}. 4. 1. 2 Coordination Esprit‘s general organizational structure follows a vertical coordination, which means that higher management level possesses over more authority. The CEO Krogner is on top of each decision as he is responsible for all operating activities. The other board members complete 13 the area of responsibilities. The divisions are subordinate to the COO who is again subordinate to the board. Jens Bergmann 2004 #16}. In terms of lateral coordination it is hard to find data. It is obvious that more or less formal meetings are hold in the company. Some records about meetings can be found on Esprit‘s webpage, such as summaries of board meetings, etc. Informal meetings held in middle management levels are very common, but as they are more informal it is hard to find minutes or any other source about these meetings. In the HR-part findings will also clarify how employees work together and that reflects that Esprit has implemented a lateral strategy with meetings and coordinating roles. . 1. 3 Organizational Structure Esprit integrates people in units and follows a divisionalized structural form. Esprit has three big markets where it operates, hence there is a geographical grouping. Esprit is following a global management strategy which includes amongst a global unified brand that the clothes and fashion are global as well. Krogner doesn‘t want to adjust styles and the collection. He rather aims for a global collection that everyone is happy with, no matter if the customer is from Asia, Europe or the United States.

Therefore there is no distinction between the operated regions in terms of designers or marketing. But the distribution management is divided. That gives the advantage to adapt to the different peculiarities between the continents. Esprit‘s distribution management is divided into the Asian, European and USAmerican market leaders {Textilwirtschaft 2009 #14}. The regional leaders are for example, responsible for the brand establishment and brand awareness in the corresponding area {Textilwirtschaft 26. 03. 2009 #15}. Furthermore Esprit has also 12 product categories and there is a management for the product area as well.

The 12 product lines are again divided into five divisions, each category has a manager on top. All five divisions are under the control of the COO, the Chief Operation Officer who is managing the operational part of the divisions, as well as logistic issues and IT-matters {Textilwirtschaft 26. 03. 2009 #15}. Esprit is organized as a divisional structure. The divisions are mentioned earlier in this report already. Esprits product lines are divided into five units: edc. , Casual, Collections, Sports and Non Apparels; each unit has its own manager and all units are subordinated by the COO. {Textilwirtschaft 26. 03. 2009 #15}.

To summarize the division and integration of work at Esprit, one can say that the working units are grouped geographically, knowledge based and product based, depending on the hierarchical level and responsibility. 4. 1. 3 Structure, Restructure and Environment Esprit is a company that has shown that it can adapt to environmental or technical changes. One example at this point could be that Esprit has started to change the Esprit-own 14 developed software program into SAP until 2010. The company has noticed that the owndeveloped software is not suitable anymore and that it doesn‘t suit the goals, hence global growth.

The changing process is for sure neither an easy, nor inexpensive one, but the time exposure that comes with the change is it worth in order to have a better competitive advantage {Textilwirtschaft 26. 03. 2009 #15}. Another change can be seen in the management structure. Actually Esprit has conducted several changes in its management structure in order to adapt to the environmental challenges. The first big change was when Krogner came to the company as a CEO. He saw the need for dramatic changes to get back to successful revenues. Part of his change was the management structure.

He started to set up the twelve divisions and each division got its own manager. That worked great for the beginning and the growth came quickly. Krogner saw the advantage in that structure that he could easily spot where management failures are done because the divisions were rather small {Jens Bergmann 2004 #16}. The second significant change just happened recently. The reason for the change was on the one hand dropping sales due to the global financial crisis and on the other hand there will be a dramatic change in the management as Krogner wants to leave the CEO position and focusing on the chairman duties.

Van der Vis is going to be the new CEO from November 1st while Krogner will remain in the board as Executive Chairmen. The changing of the CEO is not the only big personnel changing. Moreover in October 2008 a new COO (Chief Operating Officer) started, and in February 2009 a new Group CFO (Chief Finance Officer) acceded. Since June 2009 there is also a new Marketing Manager, and further changes in the product management can be expected {Textilwirtschaft 2009 #14}. The personnel‘s changing implicates a changing of the management structure. 4. 2 Human Resource ?Esprit is an environment where you have the freedom o do the best you can.? John Poon Cho Ming – Deputy Chairman, Esprit Group Chief Financial Officer & Company Secretary (Esprit 68/08) ?Great mindset with an excellent Christoph Auhagen – culture.? Esprit Senior Vice-President Collection (Esprit 68/08) ?Esprit stands out – not because of the quality of its products but also the quality of its people.? 15 Orazio Zapparrata – Esprit Country Manager, Italy (Esprit 68/08) ?Part of our success is due to the people Esprit recruit, and Esprit are always looking for talented, like-minded and ambitious people with a feeling for and commitment to Esprit.

Esprit‘s approach to business has always been to create work environments that are fun to be in, and to recruit people who share our values. We have openings all over the world ranging from store to head office positions with excellent prospects.? Esprit perceives the importance of human capital. Esprit believes that their continued success depends on the staff‘s commitment, enthusiasm and energy. Esprit‘s approach to business has always been to create fun work environments and share values among employees. (Esprit, 2009) 4. 2. Maslow’s Hierarchy of Needs 1. Physiological needs Physiological needs are the basic needs that every human needs such as oxygen, food, water, shelter, protection and sleep. 2. Safety needs Safety needs include personal security, financial security, health and wellbeing. For the employees‘ satisfaction on safety needs, employee must feel secured in such ways including the safety of using equipments while working, zero accident for the producing factory, financial security in terms of salary and bonuses, and health insurances. 3.

Belongingness and love Regarding to Esprit‘s commitment, they develop a positive and respectable working environment that encourages staff‘s collaboration and cooperation. They also aim to improve company-wide communication and connection between 8,400 plus employees around the world with the Esprit family through quarterly newsletters and the Group’s global intranet. These create friendship in the workplace, which fulfill the staff‘s need of belonging to the company. 4. Esteem needs Esprit is opened to new ideas and feedbacks from their staff, which creates staff‘s confidence and respectfulness in sharing thoughts and experiences with their olleagues and people in management level. Moreover, an annual performance and salary review system are used to educate their staff with a clear 16 and fair basis on rewarding for example, staff with outstanding performance would be granted with a share options and discretionary bonuses. These would fulfill their staff‘s esteem need in working with the company. 5. Self-actualization As Esprit try to be an attractive company for talent and motivation, they focus on staff training and development in order to exploit staff‘s potentiality.

They also provide resources for the organization such as, workshops and seminars. By having this practice, the staff could acknowledge their self-actualization in order to make self improvement on their work. 4. 2. 2 Implementing a Humane Resource Strategy The fast changing in the environment and market needs to focus on organized human resource in this term Esprit focuses on multinational diversity of HRM strategy which includes different race, genders cultures and way of doing business. They are committed to developing a positive organization culture which encourages cooperation and collaboration between workers.

In the market integration of the company goal, employees expectation and customer satisfaction take much importance than before. For Esprit the success and satisfaction of their customer comes from their talented and ambitious and skillful employee who is the right person for the right position. Beside these Esprit give an importance to reward well protect job and share wealth for retaining good staff in the company and encourage them. The Group employs both full-time and part-time employees and has over 8,000 positions worldwide after converting the part-time positions into full-time positions based on working hours.

The most significant personnel increase was in the sales-related department (www. fibre2fashion. com, 2009). The remuneration package is performance-based and takes into account business performance, market practice and competitive market conditions. Share options and discretionary bonuses are granted to staff that show outstanding performance. (ESPRIT, 2009) In general, education and learn on the job within business became more and more important. From time to time meet special needs arising from technical, legislative, and knowledge need changes. Esprit believes in investing in thorough training. Esprit offers ob learning and trainee programs which provide employees with a basis for a profession and a promising and interesting career with Esprit. (ESPRIT, 2009) For empowering of employees Provide information is a strategic key and all employees can understand financial and performance of the business conditions. Esprit encourages the employees to take responsibility and incentives. It is highly important for Esprit‘s human capital policy to have self driven employees, self managing teams and egalitarianism is highly valued within the company and it always keeps the way up for anyone who wants to learn more about their business. ESPRIT, 2009) A positive diversity culture within the workplace is important. Therefore, employers are willing to create such a diversity-friendly work environment. The term of diversity undertakes more important role in the company which is multinational. Esprit takes into account implementing the policy rigidly and inflexibly irrespective of individuals‘ needs. It is willing to consider, for example, being flexible in terms of holiday 17 dates to allowed employees who uphold certain religious festivals to have time off on the relevant dates if at all possible. ESPRIT, 2009) 4. 3 Organizational Politics The research on the political frame in general can be difficult because the company tries not to reveal its strategy and political tactics in public. Therefore most of the findings in this section are based on the findings for the structure which lead to assumptions for the politics. Some strategies are rather obvious whereas other strategies are hard to discover. But there is no doubt that Esprit is acting politically. The findings in this section are supposed to investigate the political standard strategy.

Due to time matters and the back holding of information, the group was not able to find much about the political behavior of Esprit. There were rumors about Esprit speculating to buy another fashion company. Negotiations were going on with Escada and Jil Sander, two fashion brands that stand for luxury clothes. The negotiations were held in 2007, but up to the present date when the report was conducted there couldn‘t be found any further information. {Tanja Kewes 09. 10. 2007 #21}Neither was is possible to find any information on how Esprit was behaving during the negotiations.

All the authors could provide would be speculations and that would not express objective research. 4. 3. 1 Moral Responsibility Susi Tompkins, who founded Esprit together with her husband, emphasizes that Esprit is a company that reaches for moral goals and not only for profit. As the political frame aims rather on visions than on goals, it can be stated that Esprit has a moral vision and according to Tompkins this moral vision is not measured by profit success. As Esprit sees its moral vision beyond customer‘s satisfaction, profit is actually used to keep up the moral vision {STEVEN P. FELDMAN 2007 #18}.

In political affairs it is always difficult to keep the balance between everyone‘s interests. Looking on Esprit‘s moral vision for example, these difficulties can be seen. The company uses the profit gained by customers to finance moral actions, such as donating money for the “Morakot Typhoon Relief Day “-Campaign. After the flood in Taiwan in August 2009, Esprit Taiwan donated about US$102,000. Most of the donated money came from the money customers spent in the Esprit stores in Thailand. A small part was also taken from the Esprit Care Trust, a fund run by the Esprit Group that helps in different projects. Esprit Global Image GmbH 28. 08. 2009 #19}. 18 4. 4 Findings regarding the Symbols In the symbolic frame part of this report, we aim to use topics discussed in the symbolic frame chapter to analyze how Esprit can improve its competitive advantage in the apparel market. Let‘s go back to the day when Esprit was found, Esprit used to have several brands inside the company like Plain Jane (dresses), Rose Hip(jeans) , Jasmine Tea(T-shirt), and etc. Unfortunately, at that time, Esprit was almost go bankrupt because of the high cost of production and purchasing. Esprit, 68/08) In 1979, Esprit came up with a new logo which has been used until today. The big E in three bars shape became one of the fashion symbols in nowadays. (2009, Esprit International) At this point, Esprit succeeded with the symbolic frame. The big E with three bars shape is always the first thing to come to people mind when they think about Esprit. It looks modern and articulate. Whenever people think about Esprit, they will imagine a very outstanding logo first. This could be a very good example of an organizational symbol. 4. 4. 1

Organizational Vision and Culture Esprit has a very clear Symbolic frame. It is so obvious that working together as a family became the organizational culture. Esprit was able to settle down this culture inside the company and it seems like it is successful. The company as a family with a very big size has a strong culture in the same direction is really amazing. Esprit always opens the opportunity for their staff to share the opinion and Esprit also has been a company where staffs have freedom to show their skills. Someone says Esprit is the ? love company?. Esprit, 68/08) People are very happy and proud to be part of the company. They feel like Esprit gives a real chance to move ahead quickly. Esprit is something like a family. The employees feel like they have grown into and feel connected to it. (Esprit, 68/08) Since Esprit has been established for a long time and they have about 15,000 employees (Esprit, 68/08) around the world, it is for sure they have a very strong vision and culture inside the company. It is not easy to make about 15,000 employees feel the same way and it is also not easy to make all of them feel as same as company‘s vision.

The number of employees includes employees per store, the core group, counting administration, the management of the distribution companies, and the designers (Esprit, 68/08) Esprit has set the headquarters as power centers where everyone is able to know everything. As we mentioned that the leaders work closely with all employees, furthermore, Esprit always sends the managers on excursion to their regions. The managers will talk to employees. The manager will listen to the production and distribution employees. Aside from the power center strategy, Thomas Grote, President Esprit Brand said Esprit also has ? uncomplicated management style? Esprit, 68/08) which is suitable with its global style. Every time when Esprit has new employees, they will give a train with a very personal level in order to make new employees feel the same way of the company‘s culture. Recently, Esprit continues strategic direction with new Group CEO Esprit Holdings Limited today announced that Mr. Ronald van der Vis has joined Esprit on June 22, 2009 and has been appointed as Executive Director on June 22, 2009. Heinz Krogner, a Chairman and 19 Group CEO said that ? Ronald is an excellent match for the Esprit family, both in terms of business background and personality.

His appointment as Esprit‘s new Group CEO is particularly based on his successful international retail experience. Since over 50% of Esprit‘s sales are based on wholesales to independent stores, it is important that Esprit is headed by a CEO who understands the requirements of our retail partners. We are confident that Ronald will provide outstanding leadership for our company,? (2009, Esprit International/news) From this interview, it could be another good example that working as a family of Esprit is absorbed in employee‘s mind already. Heinz Kroner still mentioned Esprit family until now and probably every time if he has interview.

This way of management is one the reasons why Esprit became big and a global brand. Although Esprit is very diverse because they are a very big company with a lot of employees, but the employees all over the world can understand and have the same feeling about working in Esprit. This kind of corporate culture is very effective. Esprit has leader teams who understood this theory well. The employees feel like this company is like their home and they are happy to work here. It can make all employees dedicate themselves into working hard and commitment to excellent. It is the reason why they are very big and strong.

Obviously, the employees have a good feeling while working can create effective outcome which is the quality of the product. The company has power because of the unity and strong culture. 4. 4. 2 Leading Principles Jurgen Friedrich, a Cofounder Esprit Europe said ? We were and are more than a company-we are a corporate family? and Peter Buckler, former CEO said ? Esprit‘s success then, as now, has always been a product of the intelligence and hard work of each staff member, and their together as a community? (Esprit, 68/08). Every staff in Esprit works together as a warmly family.

They have been working together as a community. Over the past forty years, Esprit has a very long history and changes. The leader team has managed the organization with friendly atmosphere. The leaders work together closely with everyone in the company to achieve the effective outcome. Heinz Krogner, Chairman and Group CEO said that ? Leading doesn‘t mean you just declare things because you feel like it. It means that based on your knowledge and experience, you help others do an excellent job? (Esprit, 68/08) 20 5. Conclusion and Recommendation In the conclusion part the findings and analysis above will be interpreted.

As this report is meant to answer the research and the strategic question, the conclusion for both questions will be drawn. The conclusions will be connected to the frames discussed in the finding chapter. 5. 1 Research Conclusion The structural perspective showed that Esprit has already successfully adapted to changing circumstances and other challenges. The management structure of Esprit is not fixed and untouchable. The research showed that the CEO and board members are open for change when needed and implement the change successfully.

Moreover the research indicates also that Esprit is a very structured organization with clearly defined work duties and units and a divisionalzed hierarchy. Another factor of Esprit‘s current success leads to the human resource perspective. Esprit‘s achievement comes from selecting the right employees; they apply to the right person for the right job. Esprit‘s management policy and relation between the hierarchical levels enable a friendly working environment. This environment attracts the people to work with this company and that in turn leads to international success.

The symbolic frame can in some part be connected with the political frame. The symbolic frame is one of the most important things in the management of Esprit. It is more on the inside of the company but it really affects the appearance of the company to the social or public. The symbolic frame can help the employees of the company understand the vision and the direction of the company. It is an organizational culture which is very hard to explain but the employees will understand and adapt themselves to working environment, ritual, ceremony, and etc.

In the Political Frame, people come to the same company or the organization with the same purpose too. The organizational culture is also very important, especially, with the global company like Esprit. It can make the employees which come from different places and have different experience feel the same thing. The organizational culture is whether effective or not we can evaluate from the feeling of the employee to the company. The organizational culture can make the team being together and bring the unity to the company. Esprit has succeeded in setting a corporate family culture. They are an apparel company.

Everything means the look and design. Not only that, but also they have a large scale of the apparel production. Working as a family and give the opportunity to the employees to show their skill can make the employees do not feel stress. They can devote themselves into working hard and the outcome will have a good quality in return. This can be one of the examples of how Esprit can always improve their competitive advantage in the apparel market. 5. 2 Strategic Conclusion With regard to the strategic question and the research conclusion, the strategic conclusion can be drawn at this point. 21

Generally a solid structure, including a clear division of labor and integration of responsibilities are a good basis for business success, hence for a competitive advantage. The biggest challenge right now is probably the world‘s financial crisis which makes it harder to compete next to low price and discount apparel companies. Following a clear goal and having a structured organization will probably help Esprit to maintain successful. Esprit can use human resource efficiently, this can been seen as the employee‘s performance and the way of conducting business let Esprit achieve apparel quality and design in global market.

That is a good basis for Esprit‘s competitive advantage. Esprit encourages and retains their employee by using some policy such as reward well offering job security and promoting within in the esprit the promoting depend on the performance so that the success of the employee is important. Research showed that leaders have to treat the employees as they are important in the company. That means the leader should have ethics and a sense of the leadership. The organizational culture of Esprit has been implemented by the leader and spread to the employee in many levels and many countries.

It could be a very good example of the topdown management in the Political Frame. 5. 3 Recommendation After the conclusion this report tries to give some recommendation for the management and leadership strategy for Esprit. In order to improve the competitive advantage in the apparel market, Esprit has several options to act. There are certainly ways of changing the marketing or product distribution strategy but this report will only recommend actions towards the management. The conclusions show that there is not much need for a recommendation from the structural point of view.

In order to achieve competitive advantage a company needs a structure that fits to the environment and to the circumstances of the market. The research above showed that Esprit has already a clear structure and they are willing to restructure when necessary. Connecting the structural and the human resource frame, there is actually one consideration of change. As Esprit is changing its board members due to the CEO change, the company should consider employing female executives. Esprit‘s board of director contains only male executives, but the authors of the report think that Esprit should consider employing female executives as well.

Equality in a workplace should be recognized as gender doesn‘t determine working skills and potentiality. The main concern is that Esprit is a major player in clothing business, which targets mostly on female customers, therefore, female executives could perform efficiency in guiding what the brand should improve to be more attractive to female customers and they would have better vision and perspective toward development of the products and future growth of the brand. In addition to that, the authors would also recommend a further step of action.

After studying and analyzing the management and business strategy of Esprit Holding Company, the authors think that Esprit should also focus on continuously expanding their business to the new country. With their symbol which is very unique and outstanding, the corporate culture of Esprit can be suitable with almost every country and collaborating cultures. Their management is very uncomplicated and friendly. It will be very easy to enter more new countries in order to improve their competitive advantage and increase more sales and 22 reputation.

The most availability in the apparel market will be an unbeatable competitive advantage of Esprit because the way of Esprit‘s management is very possible for this particular recommendation. They will be able to get a lot of high potential employee to work for them and the company would be number one in the apparel market in the future. At this point it should be mentioned that a variety of cultural backgrounds within all employee‘s level could lead to a competitive advantage. The more diverse the employees are the more diverse the markets and culture for new business can be.

The report was also aiming to examine if Esprit needs reframing in terms of their competitive advantage. The research showed that different perspectives give broaden view of the concepts, such as competitive advantage. There is not only one factor responsible for a company‘s success. The report showed that management and leadership should be aiming for different perspectives, appropriate to the situation. So far, Esprit‘s board has shown a sensitive management structure and after the research conducted there is no doubt that the leadership skills analyzed above are represented in the company.

As long as the board and managers will keep up on framing situations and challenges from different views, and don‘t stuck with only one perspective, the chances of becoming the world leading apparel company could become better and better, due to the fact that the competitive advantage. 23 Reference List About. com: Psychology; Hierarchy of Needs – Maslow’s Hierarchy of Needs. Retrieved on 26/09/2009 from http://psychology. about. com/od/theoriesofpersonality/a/hierarchyneeds. htm Biography Doug Tompkins (2007). Retrieved September http://www. infomat. com/whoswho/dougtompkins. html. 25, 2009, from

x

Hi!
I'm Heather

Would you like to get such a paper? How about receiving a customized one?

Check it out