Joan has a necklet business and has developed her jewelry designs to a point tha

Question

Joan has a necklet business and has developed her jewelry designs to a point that she has been running a million dollars yearly gross sales. However, a group has made similar designs and sold them to QVC and HSN about six months ago. She was working with them up till now. In the last six months her sales dropped twenty percent. In fact she can see a real dip coming in the next month. However she has picked up three new national chain stores which should pick things up considerably. The sales won’t make the profit columns until next year. If she can convince her staff to take a significant pay cut she will be able to reinstate their full salaries in the 9 to 12 months.

Create the first few paragraphs of the speech that she will give in the hopes of keeping her employees. You may add facts to the scenario or add to your speech anything you think is reasonable for after the 9-12 months. However, adaptability and change are the paramount ideas that Joan must address in her leadership actions.

Explanation / Answer

In the speech the fact that employees will have to take a pay cut in the current scenario will have to be communicated after highlighting the difficult business environment and falling profitability. Joan should put more emphasis on the future prospects given the fact that three new national chain stores have been added. This will result in the employees going back to their full salaries in the next 9 to 12 months period and a possible bonus if profits increase considerably. Thus in the speech below, the blow has been cushioned and Joan has been clear and direct about the present situation and the future prospects.

Speech:

Dear employees,

As all of you are aware our business is falling due to our designs being copied by a group and selling them to QVC and HSN. Our sales have dropped by a huge twenty percent and this has decreased our financial health. I will be as direct and to the point with you as possible. Our deteriorating financial health has made our resources scare and this is constraining our ability to meet all our financial obligations. In these trying times, I have no option, but to implement a significant pay cut for all the employees for a temporary period. We have to adapt and change as per the current situation. Change is a constant and the current change that we are witnessing is not a pleasant one. This requires us to adapt to the situation for the time being and use our resources to preserve our future. We have to adapt to the present and make some changes to ensure that our future is stronger than ever.

There is always a light at the end of the tunnel. Our company has entered into agreements with three new national chain stores. The impact of this on our financials will be felt only next year. I promise to reinstate your salaries to the normal level next year once the impact reflects in our financials.

Lastly, we all are a part of a family. As all of you are ready to help and support the organization during the current trying times, I will ensure that every member of the organization is paid healthy employees when, in the near future, the profits increase considerably and we add more stores. Since you have supported the organization during its bad times, the organization will amply reward you when it has the wherewithal to do so.

I end up by asking for your support. You are the company's most valuable assets and without your support we will not be able to achieve the potential that lies in store for us.   

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