The Contrary Management of Levendary China – Case Study Example

MEMORANDUM Mrs. Mia Foster, CEO Levendary Café [April 5, RE: Advice and Analysis on your meetings regarding future of Levendary Café China
WORDS: # 806
Statement of Problem
Immediately after the shift of the CEO, the company has gone through major challenges given the contrary management of ‘Levendary China’, as its president Louis Chen, has completely ignored the traditional conduct and concepts of U.S Lavendary Café. The competence and management styles of the new CEO has also come under scrutiny due to her lack of prior international management experience. Her management is piled up with skepticism and issues which prompts her to visit China to solve the problems that are threatening to frustrate the efforts of the company to grow its multinational brand. The company is on dilemma and needs to address the challenges by solving the management issues with Chen. The solutions proposed should be based on decisions related to documentation of rules and regulations that sets out procedures and policies for operations, product image in the Chinese market and formulation of a communication plan for both internal and external purposes.
Alternative Courses of Action of Dealing with Louis
The following three alterative course of action can be implemented by Foster to help her solve the problems with Chen.
i. Defining the role of the ‘Levendary China’ and consequently the role of Chen. Since the 23 restaurants in China are subsidiaries, Foster should set up new rules and regulations that should govern them. The initial ‘no limit’ role handed by the former CEO, Howard Leventhal has worked very well for the company, but it is time for regulation and definition of roles before it costs the company its brand. Rules proposed should guide Chen when making further developmental decisions.
ii. Acknowledgement of the fact that the strategy employed in China to make the restaurants very successful cannot be purely decided upon in Denver. This means that even if the company needs to be standardized, both Foster and Chen must cooperate to bring together a resource development component and a market positioning component in order to offer a range of acceptable products that will effectively serve the market.
iii. Hiring an international financial analyst with the capability of standardizing the finances by managing and controlling the Chinese financial operations in order to ensure that the company succeeds in its global strategy and reduction of risks. In line with standardization of the formats of financial reporting by hiring an auditor to manage the China audit, Louis Chen has already shown reluctance to comply or help in standardizing the China reporting with that of the US.
Decision Recommend for Implementation
The recommended course of action to solve the problems in Levendary China is by defining the role of the ‘Levendary China’ and consequently the role of Chen by formulation of rules and regulations that need to be followed when making future decisions. Although it is clear that most of the strategies that apply to Denver cannot apply to China, the company has a target market that should form the basis of its decision making. It is clear that both Chen and foster hold opposing views about the potential growth of the Chinese market and the way forward, but it is also clear that Foster, as well as the legendary executives of the company has never been interested in rapid growth when it means compromising the authenticity of the brand and signature image of the restaurants. As such, it is imperative to make clear the goals, policies ad processes of the company even if it means weeding out some branches at an early stages to save the company some money and restore its brand before it is completely destroyed in China and consequently in USA by extension. There is also the need to set rules that will formalize the financial reporting system in China to comply with the GAAP numbers since using direct numbers from China was a great risk to the company. Although this decision will be criticised as sacrificing the market, the company will be saved from lots of unstable brands which can cause long term problems in the restaurants in the future.
Action Steps
Foster has to strategically implement her decision is a systematic manner to ensure that there is heightened coordination between the current state of affairs and the changes that need to be effected without making major disruption in the restaurant activities.
i. First, she should collect enough data about the operations of the 23 restaurants in order to evaluate the extent of departure from the restaurants in the U.S.
ii. Conduct a meeting with Chen in order to brief him why such departure in unacceptable and the dangers it is posing to the company’s brand.
iii. Present the new rules and regulations to Chen in order to make sure he implements them in the 23 restaurants.
iv. Facilitate weeding out of restaurants that are non-compliant like the take-out joint in Shanghai, while fixing some which show little deviations.
Work Cited
Bartlett, Christopher A. and Han, Arar., Levendary Café: The China Challenge. Harvard Business School: Brief Cases. 2013. Print.