Management 14th Edition by Leslie Rue,Lloyd Byars ,Nabil Ibrahim

Exercise 18

The Way We Do Things
Fitzgerald Company manufactures a variety of consumer products for sale through retail department stores. For over 30 years, the company has held a strong belief that customer relations and a strong selling orientation are the keys to business success. As a result, all top executives have sales backgrounds and spend much of their time outside the company with customers. Because of the strong focus on the customer, management at Fitzgerald emphasizes new-product development projects and growth in volume. The company rarely implements cost reduction or process improvement projects.
Between 1990 and 2000, Fitzgerald's 10 percent share of the market was the largest in the industry. Profitability was consistently better than the industry average. However, in the last 10 years, the markets for many of Fitzgerald's products have matured, and Fitzgerald has dropped from market share leader to the number three company in the industry. Profitability has steadily declined since 2006, although Fitzgerald offers a more extensive line of products than any of its competitors. Customers are complaining that Fitzgerald's prices are higher than those of other companies.
In June 2012, Jeff Steele, president of Fitzgerald Company, hired Valerie Stevens of Management Consultants, Inc., to help him improve the company's financial performance. After an extensive study of Fitzgerald Company and its industry group, Valerie met with Jeff and said, "Jeff, I believe the Fitzgerald Company may have to substantially change its culture."
Discuss the problems the company may encounter in attempting to implement changes.