Andrea Jung Case

1. Describe Andrea Jungs leading style. How did her upbringing ferment that style? What assumptions about human nature does she hold? Andrea Jung is the quintessential transformational leader. Jung show slip-ups her transformational leaders style through and through her charisma, committal of authority, love of marchers, and her might to constantly veer the organizational structure of Avon. Jungs charisma is knock againstn in the loyal rut she has for Avon. This passion was crystalisely manifested when Jung turned down a CEO bunk at another confedeproportionn to re main(prenominal) the number two some nonp atomic number 18il at Avon.The genuine love that Jung has for Avon and its impact on society serves as a motivational lead as welll. The influence of Jungs positive stead toward Avon promotes an atmosphere of cooperation and squad operate. Much like fellow transformational leader Howard Schultz, Jung is firm truster in delegating authority. An specimen of Jungs tr ust in delegation was seen in her 2001 appointment of Susan Kropf to COO. Despite Kropfs young age, 31, Jung believed she was the right cleaning lady for job. Jungs instincts proved to be correct, as Kropf saved Avon almost $460 million.In working her way through the many levels of Avon, Jung was able to construe the splendour of gross revenue representative moral, as they were the heart of Avon. It was through this knowledge that Jung intractable to produce representatives commission payouts. This action is a legislate example of her consideration of subordinates and Jungs transformational leadership style. Jungs leadership at Avon has always been characterized by her belief in modifying the organizational structure. Never were these modifications for her individualized earn, rather the benefit of Avon as a whole.From her initial changing of the mass statement in 2000, to her unseas unitaryd business copy in 2005, Jung has always put social club goals ahead of any personal interests. Andrea Jungs upbringing has had a dispatch influence on our transformational style of leadership. Andreas pargonnts instilled in her a strong work ethic at a very young age. This work ethic, combined with her Asian p arents high belief in in-group collectivism, set the stage for Andrea to take considerable pride in groups that she holds surface to her, such as her family and Avon.On the contrary, Andreas upbringing was not one characterized by high individualism. A 2006 USA Today story states, (i)ntroversion susceptibility be partially explained by culture, ge topics and upbringing. More men are introverts than women. Masatoshi Ono, who resigned as CEO of Bridgestone/Firestone during the tire scandal of 2000, lived in Nashville for septet years but was practically unknown even by neighbors when he returned to Japan. Avon Products CEO Andrea Jung told USA TODAY in a rare interrogate in 2000 that she is not shy, but grew up in a conventional Asian household and was, on that pointfore, reserved. As the above statement explains, the modest humor that Andrea was raised in was not one were she was able to showcase her bumptious and confident side. In Jungs rise to CEO one of her main obstacles was revealing her aggressive side, a side that was slangly surpressed as a youth. Andrea Jung possesses an multitude of assumptions on human nature. Jung is a firm believer in having a genuine love for what you do in life. She assumes that not doing what you necessitate to do is a sacrifice that affects both men and women.Andrea in addition believes that founding is the name to finding success in business, however, Jung assumes that this innovation can not be used in a means to hurt the family. Jungs strongest assumption on human nature is a persons sound principles and passion exit guide them through both the bang-up and bad cartridge holders. Jungs charasmatic doings, combined with her modest upbringing, modify her to begin these bullish assumptions on human nature. 2. Does Jung practice high social occasion learnion? pardon your answer. Andrea Jung practices a high interlocking style of management.Jungs high involvement management is seen through her reliance on finality power, information sharing, and fillip compensation. The delegation of all operational decisions to Susan Kropf is an example of the belief in decision power that Jung possesses. The delegation paid off in the dour sour for Avon, as Kropf saved a large nitty-gritty in minify the amount of suppliers. For Jung to put such responsibility in a subordinate is a testament to her high involvement climax. Avon is characterized by an ease up return of information for all its employees.Key among this data is Avons spreading of facts on female social and health issues. Jungs continuation of Avons conventional spreading of information pamphlets alters both her work force and guests to share in Avons values. The distribution of these pam phlets enables Avon to form a special bond with their customers. High involvement four-in-hands believe in compensating their employees establish upon their performance. Avons compensation is based on a piece rate system, where associates are compensated based on the amount they sell.In another manifestation of her high involvement style, Jung decided to increase representative payouts. Some areas Avon even pays commissions to surviveing gross sales members, based upon reps that they personally recruit. 3. To what degree does Andrea Jung demonstrate the attributes of aroused in evidenceigence? The five attributes of emotional intelligence are highly visible in Andrea Jungs leadership style. Through her day to day demonstration of self-awareness, self-regulation, motivation, empathy, and social skills, Andrea Jung proves that she is a manager characterized by a high degree of emotional intelligence.Jung understands that her behaviors affect her workforces feelings and beliefs. T he productivity of her employees is a right away result of her optimistic demeanor. A prime example of her self-awareness is evident when Jung states, (i)f people cant tell that I love this company, then its hard for me to be a lasting leader. This quote serves a symbol of Jungs readiness to understand that her attitude, alone, is a key motivational force for Avon. Emotionally intelligent leaders are able to remain calm in both the skilful and bad times.From her time as a Bloomingdales management trainee, to her up-to-date role as Avons CEO, Jung has always been able to control her emotions. The self-regulation that Jung has shown through her ups and downs has encouraged her associates to handle their difficult situations in the same calm and open minded demeanor. Motivation is synonymous with Andrea Jung. She possesses a passion for Avon and its pile of elevating women in the community. Jung has a track record of constantly looking to improve processes at Avon. Her delegation of authority to Susan Kropt and her proposed correctional action think are clear illustrations of this fervor.Through her search for feedback from associates and burning desire for constant improvement at Avon, it is clear that Jung is an emotionally intelligent leader. Jungs understands the richness of a bouncing balance among a professional and personal life. It is this empathy that enables her to be an in force(p) manager. Her ability to balance her personal and work duties sets an example for her workforce. Jung also has shown that she is not afraid to make decisions that readly improve her employees moral, as was the case when she raised commission payouts for her direct salesperson workforce.Jungs ability to see the big picture enables her to understand that a happy sales team willing pay far great value in the long condition than the short term balance sheet savings. Jung has established an array of effective working relationships with current and past colleagues. H er past relationships with Barbara Bass and crowd together Preston laid the framework of her proficient social skills. Her belief in the importance in social relationships is depicted in her decision to fall out Avons tradition of sales representative personally delivering roducts to their customers. It is through these social skills that Jung has been able to lead Avon to her desired outcomes. 4. What is Avons business model? How has the business model changed over time? Avons business model was built upon separate sales representatives selling cosmetics in a door to door sales approach. This model lasted for over 80 years, when two key economic forces caused Avon to change. The aspiration from large discount stores, as well as the trend of women connection the workforce, forced Avon to change its business model.In the 1980s Avon, unsure of its direct selling method, went through a period of acquisitions where it bought some health wish well businesses and Tiffany & Co. , a hi gh end jewelry retailer. In 1988 Avons impertinently CEO, James Preston, recommitted the company towards its direct sales of personal care products. later selling off non core business departments, Preston poreed on a restoration of growth at Avon. Avon was characterized in the 1990s by a vision centered on a global sagaciousness of women. Their re committal to their direct sales model was seen in their global sales force of slightly 1. million independent sales representatives. The Andrea Jung era of Avon began at the start of the new millennium. Jungs model was characterized by an even deeper emphasis on women, a reduction of suppliers, and an open mind regarding innovation. Despite much success in her early years at Avon, 2005 posed as a diametric year for Jung, as Avons demand was in decline. Given the changing market conditions, Jung proposed a new business model that focused on increased R&D, channel support, and ad. 5. Is Avon a attainment organization? apologise your answer. Avon possesses many of the key attributes of a learning rganization. Through its constant ability to oppose to market conditions, openness to innovation, and guiding ideas, Avon is a clear example of a learning organization. Learning has been a cornerstone of Avons historical success. As their market has experient a variety of drastic changes, their ability to react to market conditions has enabled Avon to survive for over a century. A great deal of learning at Avon comes from their process of having all executives spend time as a direct sales representative. It was during this experience, that a young Andrea Jung acquire the complexity of Avons marketing materials.For a company to be considered a learning organization, it has to have an environment that fosters innovation. Andrea Jung single handedly influences Avon to adopt an innovative approach to their business practices. Jung possesses an open mind regarding any innovation that Avon could adapt to its advantage. I t is this learning environment that has permitted Avon to experience such success. The most influential factor in making Avon a learning organization is the clear guiding ideas that management communicates to all employees. From James Preston to Andrea Jung, Avon has had a history of motivating, team building vision statements.The tradition of female focused mission statements is a perfect discipline for Avon, as the majority of Avons workforce is female. 6. How does Jung leverage human crownwork for Avons competitive advantage? Is this competitive advantage sustainable tending(p) the prevailing competitive pressures and forces driving industry change? Avons direct sales distribution is an inherent human capital leverage feature film that gives the company a competitive advantage. Jungs increase in the amount of independent sales reps from 1. 5 million to 5 million is a clear illustration of her leverage of human capital.This sales headcount increase is but one of Jungs human ca pital influences. Jung also motivates her sales force through her external travels, showing to her associates that each and every one of them is valued at Avon. Perhaps Jungs most valuable leveraging of human capital is her ability to cater Avons highest principles and values to her for the most part female workforce. Understanding that Avon is a female centered company, Jung is able to keep company moral high, as employees connect their job with Avons vision of enhancing womens value in the community.Avons competitive advantage is sustainable given the prevailing competitive pressures and industry driving forces. It is important to avow the influence the Avon brand has on consumers in its developed markets. Despite Avons recent softened demand in these long standing markets, they will always have a loyal customer base thank to their decades of personalized business. Avons growth potential is in the globalistic markets. As India and China continue to industrialize their economy, their cosmetic and toiletries spending is set to skyrocket.Avons increased international sales headcount is the key in addressing their developing international opportunities. As long as Avon continues its innovative nature and corset committed to its bread and butter, direct selling with independent sales representatives, they will continue to perform well. 7. In 2005, what strategic and/or organizational problems exist for Avon Products? How are these reflected in the financial performance of the firm? Avon had two key strategic and organizational obstacles to overcome in 2005. The first issue go about Avon was the softened demand in their developed North American markets.Avons molybdenum problem was the increased rivalry in their growing international markets. This was an exceptionally troubling for Avon, as these markets were the key to their future growth. These two problems are clearly reflected in Avons financial performance. Exhibit 1 of the case, Avons selected financ ial data 1995-2005, reveals these issues as they relate to headcount. Avons number of US employees decreased 700 employees (7%) from 2003 to 2005. The decreased headcount in the US is a clear indication of softening demand in a developed market.The international headcount tells a different tale. Avons international headcount about doubled from 1995 to 2005, growing from 23,800 to 40,300. The growth in headcount is a clear manifestation of the growth of sales in the international markets, as wide-cut light up income at Avon increased from $256. 5M in 1995 to $847. 6M in 2005. However, the ratio of net income to international sales headcount takes a turn for the worse between 2004 and 2005. Despite an increase of 1,500 international employees from 2004 to 2005, net income only rose $1. M. This is roughly an additional $1,000 in net income per new international headcount. Compare this ratio to the 2003 to 2004 numbers, where one new international headcount yielded an additional $79, 000 in net income, and you see the problems Avon has experienced. The severe decrease in additional net income per international headcount is a direct result of Avons increased competition in their growing worldwide markets. 8. As CEO in 2005, does Andrea Jung have the leadership qualities necessary to address these challenges effectively?Avons challenges call for an innovative, attractive leader, a manager who is not afraid to sacrifice his or her personal gains for the better of the company. Fortunately for Avon, Andrea Jung is that transformational leader that has the qualities to guide Avon through these current challenges. Avons current obstacles are present in all their global markets. The base to these deeply systemic challenges will be addressed by Jungs strategic vision. Throughout her career, Andrea Jung has always been able prioritize long term answers over short term quick fixes.From her time at Bloomingdales, to her leadership as CEO, Jung was a proven track record fo cusing company resources on the appropriate issues. The high emotional intelligence of Jung will also enable her to properly address Avons current dilemmas. She understands that in come out for Avon to tackle their current difficulties, she must not only keep company moral high, but also maintain a calm demeanor during this difficult time. The key to Avon success is in the interactions between their direct sales team and customers.From her visits to worldwide Avon offices, Jung is able to have a constant understanding of this interaction. It is this consistent understanding of Avons sales channels that will enable her to effectively make the necessary decisions for Avon. Jungs ability to continuously reinvent her management style is perhaps her most crucial quality in terms of addressing Avons current problems. As Avons market has experienced a variety of influences throughout her tenure as CEO, Jung has needed to fake her way of thinking. Much of Avons past success is due to Jung being able to put her ego aside.This humble nature will enable Avon to successfully address their current concerns. 9. Evaluate the proposed correction action contrive Jung and her leadership team have developed. What recommendations would you suggest to them? Avons four story proposed correction aim is made up of a renewed commitment to brand awareness, a focus on their commercial message edge, an elevation of commercial force, and a transformation of their cost structure. Although I feel this is an overall effective plan, I do have some recommendations on how to make this to a greater extent successful.Avons commitment to brand competitiveness is characterized by a focus on Skin Care and Color as well as a boost in advertising. Although I feel that this suggestion is solid, there are two key items that Avon must focus on for this enterprise to be successful. Avon must do the necessary market research to look into that their Skin Care and Color lines are sold in the most effective channels. Their past launches of beComing and mark had issues because of the weaknesses in their selected channel of distribution. The chip point Avon needs to pay close attention to is that they are acquire the most out of their advertising dollars.As their North Americans are already mature, advertising efforts here will be less effective than in their more promising international markets. Avon must focus the majority of their advertising budget towards these global markets. This focus will enable them to establish a stronger brand recognition that will transfer into future sales. Avons second piece centers on them improving their merchandising and shopping appeal in their direct-selling approach. I agree that the direct-selling approach is their strongest asset, and that enriching it would create a lot of value.I do, however, recommend that Avon does not stray too far away from their traditional mode of direct-selling. Drastic changes to this will erode the traditiona l bond that Avon has with its customer base. I also recommend that Avon does not increase their merchandising too specifically. As was shown in their prior marketing brochure, Avon has had a history of flooding their customers with too much information. Avons plan to elevate its organizational effectiveness is characterized by an increase in training in people development.This proposal matches quite well with Jung, as she is an emotionally intelligent leader that believes in the development of her associates. My suggestion regarding this organizational elevation is that they do it in a way that does not affect the time that their sales force spends in front of customers. As personal interaction with clients is the cornerstone to Avons growth strategy, it is crucial that this time is not significantly decreased by different trainings. The plan for a radical transformation at Avon is made up of a realigned cost structure and a strategic leveraging of assets.Obviously, these are valua ble initiatives to strive for. From Avons perspective, I would recommend that they develop double action plans based upon the financial effects of these changes. As their market is not predictable, they need to develop a worst case scenario plan, in the gist their sales revenue does not meet expectations. History of wooden-headedness behavior at companies such as Sony and Snow Brand has proven that failure to plan for such problems can cause severe problems within a company. Having this plan set in place will enable them to immediately react to any adverse future performances.