CASE FOR ANALYSIS Sunflower Incorporated\'110 Sunflower Incorporated is a large

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CASE FOR ANALYSIS Sunflower Incorporated'110 Sunflower Incorporated is a large distribution company with varied widely. By 2006, the differences were so great that more than 5,000 employees and gross sales of more than management decided some standardization was necessary. $700 million (2008). The company purchases salty snack Managers believed highly profitable regions were foods and liquor and distributes them to independent ret smetimes using lowerquality items, even seconds, to boost stores throughout the United States and Canada. Salty snack profit margins. This practice could hurt Sunflower's image. foods include corn chips, potato chips, cheese curls, tortilla Most regions were facing cutthroat price competition to chips, pretzels, and peanuts. The United States and Canada are hold market share. Triggered by price cuts by Eagle Snacks, divided into 22 regions, each with its own central warehouse, national distributors such as Frito-Lay, Borden, Nabisco, salespeople, finance department, and purchasing department. Procter&Gamble; (Pringles), and Kraft Foods (Planters The company distributes national and local brands and Peanuts) were pushing to hold or increase market share by packages some items under private labels. Competition in this cutting prices and launching new products. Independent industry is intense. The demand for liquor has been declining, snack food distributors had a tougher and tougher time and snack food competitors like Procter & Gamble and Frito- competing, and many were going out of business. Lay have developed new products and low-carb options toAs these problems accumulated, Joe Steela gain market share from smaller companies like Sunflower. The president of Sunflower, decided to create a new position to head office encourages each region to be autonomous because monitor pricing and purchasing practices. Loretta Williams of local tastes and practices. In the northeastern United was hired from the finance department of a competing States, for example, people consume a greater percentage of organization. Her new title was director of pricing and Canadian whiskey and American bourbon, whereas in the purchasing, and she reported to the vice president of West they consume more light liquors, such as vodka, gin, finance, Peter Langly. Langly gave Williams great latitude and rum. Snack foods in the Southwest are often seasoned to in organizing her job and encouraged her to establish reflect Mexican tastes, and customers in the Northeast buy a whatever rules and procedures were necessary. She was greater percentage of pretzels. also encouraged to gather information from each region. Early in 2003, Sunflower began using a financial Each region was notified of her appointment by an official reporting system that compared sales, costs, and profits memo sent to the 22 regional directors. A copy of the across company regions. Each region was a profit center, memo was posted on each warehouse bulletin board. The and top management was surprised to learn that profits announcement was also made in the company newspaper. Williams showed a draft of the message to Langly two problems needed her attention. Over the long and invited his comments. Langly said the message term, Sunflower should make better use of information was a good idea but wondered it was sufficient. The technology. Williams believed information technology could regions handled hundreds of items and were accustomed provide more information to headquarters for decision to decentralized decision making. Langly suggested that making. Top managers in the divisions were connected to Williams ought to visit the regions and discuss purchasing headquarters by an intranet, but lower-level employees and and pricing policies with the executives. Williams refused, salespeople were not connected. Only a few senior managers saying that such trips would be expensive and time consuming. She had so many things to do at headquarters After three weeks on the job, Williams decided in about half the divisions used the system regularly. In the short term, Williams decided fragmented pricing and said that the trips were impossible to schedule. Langly and purchasing decisions were a problem and these decisions also suggested waiting to implement the procedures until should be standardized across regions. This strategy should after the annual company meeting in three months, when be undertaken immediately. As a first step, she wanted the Williams could meet the regional directors personally. financial executive in each region to notify her of any change Williams said this would take too long because the in local prices of more than 3 percent. She also decided that procedures would then not take effect until after the peak all new contacfor local purchases of more than $5,000 sales season. She believed the procedures were needed should be cleared through her office. (Approximately now. The messages went out the next day. 60 percent of items distributed in the regions were purchased in large quantities and supplied from the home office. The seven regions. The managers said they were in agreement other 40 percent were purchased and distributed within and were happy to cooperate. the region.) Williams believed the only way to standardize Eight weeks later, Williams had not received notices operations was for each region to notify the home office in from any regions about local price or purchase changes. advance of any change in prices or purchases. She discussed Other executives who had visited regional warehouses the proposed policy with Langly. He agreed, so they indicated to her that the regions were busy as usual submitted a formal proposal to the president and board of Regional executives seemed to be following usual directors, who approved the plan. The changes represented procedures for that time of year. She telephoned one of the a complicated shift in policy procedures, and Sunflower was regional managers and discovered that he did not know moving into peak holiday season, so Williams wanted to who she was and had never heard of her position. Besides, implement the new procedures right away. She decided to he said, "we have enough to worry about reaching profit send an e-mail message followed by a fax to the financial goals without additional procedures from headquarters. and purchasing executives in each region notifying them Williams was chagrined that her position and her suggested of the new procedures. The change would be inserted in al changes in procedure had no impact. She wondered policy and procedure manuals throughout Sunflower within whether field managers were disobedient or whether she four months During the next few days, e-mail replies came in fronm should have used another communication strategy.

Explanation / Answer

Loretta Williams was a newly hired director in the company. Usually when a company hires people in important positions, the induction and onboarding of the new recruit involves visiting all the offices of the company and having an introductory session with the key management people. In case of Williams, a memo was sent to the regional directors to inform them about her hiring. Instead of this, a video conferencing could have been done if Williams was not able to meet the key employees in person. The company divulged in an array of products, so the regional directors may have missed on the memo.

When Williams started working on his position, instead of talking personally to regional directors and setting a tone of professional relationship, she simply drafted a message and sent to the regional directors. Many of the regional directors did not even open the message and from those who opened, they failed to recognize Williams. This was a clear case of bad communication strategy. Williams needed to introduce herself to the common people with whom she would be interacting. She could have interacted with them through a videoconference meeting or a telephonic discussion. This would have been a better communication effort rather than simply shooting a message.

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