Case in Point_bitter Sweet Chocolate

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    Case in Point

    Bitter Sweet Chocolate- Sumeet Verghese

    A leading chocolate manufacturing company is facing allegations that its

    products are infested with worms. The media has been going hammer and

    tongs after the company for showing laxity in adhering to quality norms.

    However, Mr. Agrawal who heads the quality control department says that

    his department never compromises on standards. In fact, he points out that

    products bought at outlets that do not abide by storage requirements prescribed

    by the company get infested. Based on this assumption, the sales team carries

    out surprise checks on stores all over the country. Terming the checks asindiscreet and malicious, shopkeepers all over the country decide to stop the

    sale of products of the chocolate company altogether. What can the CEO of

    the chocolate company do in this case?

    In order to analyse the chocolate

    companys case, it is important to

    first isolate the major actors

    involved in the situation. These in

    terms of their order of importance

    are:

    1. The CEO

    2. Mr. Agrawal, the Quality

    Control Head

    3. The Shopkeepers

    4. The Media

    The CEO is faced with theenormous responsibility of

    managing on the one hand, the

    shopkeepers and their

    resentment towards the sales

    team and the company and on the

    other, the deteriorating relations

    between the organisation and the

    media. Clearly, both call for a

    diverse set of responses not to

    mention diverse styles of

    management. And before the CEO

    decides on a course of action, it

    would be wiser to take stock of the

    welter of motives that operate in

    each actors case.

    Mr. Agrawal, the man who

    perhaps advised the CEO to order

    surprise checks on stores in the first

    place, is likely to face the

    maximum fire if it turns out thathis quality control department has

    not been meticulous or stringent

    enough in its procedures. His

    confidence in his department is

    welcome but not immune to an

    official or unofficial scrutiny. The

    CEO should first initiate an inter-

    departmental inquiry, which

    independently looks into the

    claims made by Mr. Agrawal and

    the media and then ascertains

    whether the company can shift the

    blame to its retailers. Accordingly,

    due care must be exercised so as to

    not antagonise Mr. Agrawal,

    should the inquiry prove that the

    quality control department did err

    in its operations. The media would

    love to have a few scapegoats

    especially in such over-charged

    circumstances. This exercise will

    immensely benefit the CEO in

    that he will be assured that he has

    followed the due procedures

    diligently and therefore whateveraction he takes is warranted.

    The shopkeepers are probably

    hurt because they may not have

    liked the manner in which the

    checks were done. Some hygienic

    shopkeepers might be offended

    by the insinuation levelled at

    them. Accordingly, they may

    have perceived the entire action

    as a game of one-upmanship.

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    Case in Point

    Perhaps as far as they are

    concerned, the company wants to

    wriggle out of the mess it has got

    itself into by passing the buck onto

    the retailers. The CEO must first

    ensure that this negative

    perception is taken care of.

    If the company has as a matter

    of policy specified certain storage

    requirements, then the CEO must

    first find out whether the

    shopkeepers have followed them.

    This can be done by taking the

    shopkeepers into confidence and

    explaining the purpose the

    investigation will serve. The sales

    team may have behaved in a high-

    handed manner in their eagerness

    to fish out the culprits and

    consequently created more

    misunderstanding among theranks. The CEO could seriously

    look into the charges levelled and

    then ensure that the genuine

    grievances of the retailers are

    redressed. It should also be

    explained to the retailers that the

    company does not wish to

    selectively target an X or a Y and

    that these checks the company is

    forced to conduct can only take

    place with their support. The very

    fact that these checks were not

    undertaken earlier indicates that

    the trust between the company and

    retailer didnt necessitate it until

    the issue came to light. The absence

    of regular checks, which should

    have been conducted as preventive

    rather than post-mortem, already

    shows the sales team and

    consequently the company in poor

    light. In fact the raids have all the

    makings of a witch-hunt, a kind of

    knee-jerk reaction partly to ward

    off the criticism from the public

    and the media. To make amends,

    the CEO should look at the retailer-

    company interface and if

    necessary, call off the searches or

    continue with them only if the

    shopkeepers agree to such checks.

    Such openness on the part of the

    company will clear the air of

    mistrust that has developed

    between the two parties.

    Since the retailers are the

    backbone of the supply-chain

    network, the relationship between

    them and the companyis a delicate one and

    hence fraught with

    risks. This is the turf

    that the CEO must

    tread most cautiously.

    When the air is thick

    with allegations, it

    would be best to take an

    objective stance

    keeping the media from

    blowing the matter out

    of proportion.

    If the chocolate

    company is confident

    about the popularity of

    its products, it can use

    that information to

    negotiate with the

    retailers. Clearly, no shopkeeper

    would consider it wise not to stock

    goods that sell. But at the same

    time the company cannot forget

    that it can reach its customers only

    through the retail chain. This

    symbiotic relationship or mutual

    dependency should be asserted

    while negotiating. The CEO must

    make it clear to the dissenting

    shopkeepers that the need of the

    hour is to protect their mutual

    interests and that they and the

    company should collectively own

    up for what has happened. The

    company, on its part, may come

    clean and honestly declare that it

    was a little late in carrying out the

    checks and if it was a case of the

    retailers not abiding by the

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    prescribed norms, it will ensure

    that appropriate action is taken

    against the erring parties. Also,

    should the company find fault

    with its quality control

    department, it should make a clean

    breast of the issue. This action is

    expected to be most damaging to

    the company immediately, but in

    the long run is likely to bolster its

    reputation as a corporate house

    that stands for integrity and

    stringent adherence to business

    ethics.

    Most scams are so much a part

    of the public imagination because

    they are reported in a spicy and

    sensational manner by the media.

    This is not to discount the role of

    the media as a watchdog but for

    the CEO of the chocolate company,who is obviously at the receiving

    end, the medias reporting of the

    incident mandates that he go into

    damage control mode as soon as

    possible.

    First of all, he should examine

    the version of the press and the

    media and ascertain whether the

    charges against the company are

    trumped up and baseless. If on the

    basis of his findings, he comes to

    the conclusion that the statements

    by the press are not unwarranted,

    he can declare that he wishes to

    first find out for himself to what

    extent the claims are true. He can

    then begin his communication

    with the media by issuing a press

    statement that does not implicate

    any party as such retailers or the

    company, but which promises to

    match the companys words with

    desired action.

    Rather than assigning blamebefore the inquiry is over, he could

    notify that the people responsible

    for the episode would in due

    course of time be found and

    made accountable.

    Meanwhile, he could clarify,

    that the company is

    considering a countrywide

    recall of the particular batch

    of chocolates in which

    worms have been found.

    This action, costly

    nonetheless, will only raise

    the companys esteem in the

    eyes of the public and the

    media.

    Since the popularity of the

    companys products has

    Case in Point

    been heavily jeopardised, the CEO

    may have to launch a publicity

    blitz involving leading

    personalities to salvage the

    reputation of the company and the

    brand in particular. This may take

    the form of a media campaign and

    extensive use of pamphlets that

    make the customers aware about

    the production process, the quality

    safeguards that are ensured and

    the storage requirements that are

    necessary at the retailers end.

    Ultimately, it is how the CEO

    manages the conflicting and

    convening interests of all the actors

    named in the analysis that can earn

    him plaudits or brickbats. What

    must not be lost track of in the

    ensuing melee of negotiations and

    bargaining is the principle that thecustomers are always looming in

    the background. And therefore,

    any compromise, which affects

    their interests, is bound to prove

    detrimental to the company. In the

    final analysis, due regard must be

    paid to their choices and wishes.

    After all, if the experience leaves a

    bitter taste in the mouth of the

    consumers, they may not have the

    will to buy the companys

    chocolates, sweet tooth or not.

    The author is currently pursuing

    PG in HRM besides serving as a

    Trainer and Instruction Designer

    with Godrej Lawkin ITES.