Organizational Behavior – Levis Jeans Case Study

Introduction

As the markets become more global and competitive, understanding organizational behavior can play a significant role in giving companies a competitive advantage. While providing alternative approaches to improve the overall performance of Levis Jeans, this report examines the organizational behaviors based on how the company has changed, focusing on the decrease in revenue. Additionally, the report analyses the organizational structure, culture, leadership style, and the approach of management in motivating the employees.

Notably, the current situation at the company shows sales have fallen significantly by 20% in the previous year, and the revenues decreased by 40%. Following the analysis of both the external and internal environment of the organizations, several findings were evident. First, the company is losing market share to new, fashionable competitors who appeal to young customers. Second, it is clear from the 15% sales return the products are not meeting required quality levels. It is also clear that labor turnover is significantly high, where less than 50% of the workforce has been employed for over a year. Finally, findings show that the cost of making a unit of Levis Jeans is 25% higher as compared to our competitors.

Organizational Structure

Organizational structure at Levis Jeans can be categorized as hierarchical. The founder, Brat Levis, is at the top of the hierarchy, where he controls everything from the head office in Croydon. He retains control over all the areas of the organization’s operations. Under Levis, there are department managers in each factory who answer directly to the head office. Their primary goal is to implement the directives of Levis. Under the managers, some supervisors ensure that there are no delays in productions.

The hierarchical structure of the organization can be one of the primary cause of the decrease in sales, revenue, and the overall performance of the company. There are various shortcomings of this approach (Alton, 2017). First, communication flows in one direction from top to bottom, which interprets to stagnation in innovation, and non-existent of engagement and collaboration. This structure also fails to focus on the employee experience, reducing the chances of attracting and retaining top talent in the company. This challenge is clear from the labor turnover in the company. This type of structure also hinders the fast rate of growth opening doors for competitors and startups to take over quickly.

It is necessary for the company to adopt a new structure to overcome these challenges. The best structure will be a flat-archy. This structure will remove unnecessary levels and spread power across all the stakeholders of the company. This change will offer better decision-making, help in retaining employees, and improvement of the products by promoting new ideas (Alton, 2017).

Organizational Behavior - Levis Jeans Case Study
Organizational Behavior – Levis Jeans Case Study

Organizational Culture

At Levis Jeans, one of the dominant business cultures is the power culture. CEO Bert Levis has absolute control over all departments of the firm’s operations. He is the only one who determines the company’s strategy, which he communicates to his managers via telephone and email. Bert Levis feels that he has a complete understanding of the jeans market; hence, he knows what is needed. Therefore, his departmental managers in each factory have been given limited authority to act and make decisions on the company’s strategic goals. A weakness of a power culture is that the competence of the decision maker directly influences the types of decisions made (Cohan, 2018). Furthermore, the junior managers may not be entirely on board with Levis’, and this may affect implementation success and morale of employees.

The best culture that Levis Jeans can adopt is a customer-focused culture. This culture focuses on taking care of customer needs at affordable prices (Cohan, 2018). Embracing this culture will motivate employees to develop innovative products and provide exceptional services that will bring customers back to Levis Jeans. This culture will be reinforced by having excellent customer care service. It will enable Levis Jeans to compete favorably with the new fashionable competitors.   

The best way that Bert Levis can make these changes to organizational culture without facing resistance is to convince his employees of the advantages of the changes. The managers have to show through their actions and behaviors that customer-based culture will be beneficial to everybody.

Staff Motivation

Levis Jeans uses various strategies to motivate employees. Notably, the company keeps its staff motivated by offering bonuses linked to output targets. The organization also provides promotions to supervisors and managers to encourage them to improve the overall performance in their respective departments.

Although these strategies might be useful, it will be necessary for the company to adopt new approaches to assist in retaining employees, improving the quality of the products, and increasing the revenue. First, it will be necessary to introduce a proper appraisal system in the organization which evaluates the performance of the staff not only in meeting set output targets but also other values such as leadership skills (Andriotis, 2018). The performance reports will be used in rewarding employees by offering them recognition awards and allowing them to share some of their unique ideas which will promote innovation in the company.

Secondly, it will be necessary for the company to ensure employees are aware of the company’s mid-term objectives and the overall direction of the company (Andriotis, 2018). Failing to communicate with the employees makes them feel like simple tools in the organization and may lead them to do just the assigned task because they do not feel like part of the vision. Explaining the strategies and the goals of the company and the way to achieve them may play a significant role in motivating the staff.

Finally, training employees will be a significant motivator (Andriotis, 2018). Failure to understand their work can be detrimental to staff motivation as they are not offered a clear career development path. Therefore, it is essential to establish a staff training course and deploy it across all the factories. These platforms will provide both new and senior employees the leadership skills necessary to improve the performance of the company and retain employees because they offer an opportunity to advance their careers.

Leadership Styles

The management and leadership style which the company uses is the authoritarian style of leadership. This is because Levis is a leader who focuses mostly on efficiency and results. He makes all the company’s decisions alone, and his departmental managers and other employees are expected to do as they are told.  This type of leadership is only applicable to companies operating in industries that require substantial compliance. It is also appropriate in a situation whereby the leader of a small organization is the most experienced and knowledgeable in the group (Dugan, 2017). Levis Jeans is a major jeans brand in the U.K. hence, this style of leadership is not appropriate for the company. Levis’ style of leadership has affected the performance of the organization because Levis Jeans is losing market share to competitors. Clearly, his pulse on the jeans market is not accurate. Also, this leadership style suppresses innovation and creativity, and employees feel confined.

The best leadership style that Bert Levis can adopt is one of the participative leadership theories. These theories suggest that the ideal leadership style is that which takes into account the input of other members (Dugan, 2017). By adopting this participative approach, Levis will encourage contributions from his departmental managers and other employees, making them feel relevant; hence, they will be more committed to the implementation of the discussed strategies. This strategy will, therefore, boost their morale and productivity. These changes can begin at the managerial level and then trickle down to the rest of the junior employees.

How to manage the change process?

Psychologist Kurt Lewin created a model for change which is still applicable today in the management of change. The theory claims that change encompasses moving from a frozen state, then going through an activity stage and eventually going back to a frozen or a fixed state (Hayes, 2018). From a practical point of view, implementing change can be a daunting task in an organization.  Employees can resist change and even rally against it. Therefore, leaders have a responsibility to persuade their employees on the advantages of change.

Managers can manage the change process by first formulating a clear strategic framework. The framework serves the purpose of giving direction for the impending change (Hayes, 2018). After coming up with a plan, the management has to communicate it with the rest of the staff. Communicating the change plan is vital for the project as management can now receive valuable contributions and feedback from the employees. This approach makes decision making more inclusive and much more accessible when it comes to implementation.

The top management must display a commitment to the change process. The organization will also require to be modified to support the change process. Finally, managers will have to identify obstacles and resisting employees. Acknowledging and rewarding employee improvement will encourage involvement in the continuous change process.

Conclusions and Recommendations

Over the last ten years, Levis Jeans has grown to one of the U.K.’s significant jeans brands. Although the company is experiencing some challenges, it can improve and achieve its full potential if the necessary changes are made. Some of the problems can be attributed to the hierarchical organization structure, lack of sufficient motivation to the employees, power, and performance-oriented culture, and the authoritarian leadership strategy.

Based on the findings as outlined in this report, the company should adopt a flatarchy structure to distribute power and promote innovation. Subsequently, the company should employ a customer focus culture and introduce other motivation strategies such as training employees. Finally, Levis Jeans should change the leadership style to a participative approach to allow every stakeholder to take an active role in the company.

References

Alton, L., (2017). 4 Common Types of Organizational Structures

Andriotis, N., (2018). How To Motivate Employees In The Workplace In 5 Foolproof Ways – eLearning Industry.

Cohan, P., (2018). 4 Types of Company Culture, Ranked from Best to Worst. Inc.

Dugan, J. P., (2017). Leadership theory: Cultivating critical perspectives. John Wiley & Sons.

Hayes, J., (2018). The theory and practice of change management. Palgrave.

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