Case in Point_bitter Sweet Chocolate
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Transcript of Case in Point_bitter Sweet Chocolate
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8/3/2019 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.