Abstract

Leadership skills are instrumental in running any organization. The difference between the leadership skills applied by Charles Conway and leadership skills of Anne Mulcahy does not lie in their success, but in the manner in which they implemented  in their business models and planning strategies. Xerox channeled its energy in reducing its expenditure and painting a picture of an entity that had high quality products at low friendly prices. On the other hand Kmart, which was run by Chuck, utilized a promotional business model hence it tried to make sales via promotion rather than shifting to reducing expenses and increase profitability.

 

 

 

 

 

 

Back ground of Chuck Conway and his organizational framework

Charles Conaway also commonly known as Chuck is an entrepreneur who came into the public light when he was the CEO of Kmart. He had also served as president and as a principal operating officer of CVS. Charles Conway is the father to two daughters and has a wife called Lisa. He was born in Lapeer, an area in Michigan. He joined   cooperate world after graduating from college. He was the founder of Reliable Drug store in the year 1989.His organization grew into a $400 million worth company chain. He left Reliable Drug store to join CVS .He contributed a lot as the president of CVS in terms of diversifying the company and increasing its profits in the share market. Conway’s achievements however were realized when he landed a job as a CVS operational activities manager and procedures after the company bought Revco in the year 1997 and Arbor Drug in the year 1998.It was during this period that he acquired cooperate leadership skills of transparency, accountability and a good work conduct. This were the qualities that he would later transfer with him to Kmart (Zyman, 2002).

Meanwhile, Kmart an allowance retailer, which was struggling to create a niche for itself in the 1990s after a failing to secure retail stocks, was searching  for a CEO who would replace Floyd Hall .Floyd hall  had failed to propel Kmart into greater heights in the market. Charles Conway was shortlisted by Kmart board of directors although some people thought that he was not experienced enough to run Kmart as he had only experience of running drug stores. However after meeting Conway and seeing how passionate he was towards his work, the boards’ members were assured that he would deliver. Charles Conway was appointed in May, the year 2000.Kmart stocks rose by 16%. (Haig, 2004).

Once Charles Conway was officially installed as the chief executive officer of Kmart, he began on a strategic plan to complete and outdo Walmart and build Kmart into the best retailer in the market. Known as serious individual who crushed goals, the first step he took in Kmart was to set up a strategy that would last for 30 to 90 days. For obvious reasons the plans were altered over time. He told his coworkers that   they needed to work together with time limited goals to guide them on what to do. In April 2001, Charles had pinpointed, identified and applied more than one hundred reorganization actions strategically and perfectly leading the company into progress. (Turner, 2003).

Another organizational framework that Charles initiated was re-instating Kmart’s Blue light special which cost the company $25milion in advertising the project to the media. The blue light was given to each customer every hour and was to attract the attention of the customers. This attracted more customers to Kmart stores. (Turner, 2003).

Charles Conway also attracted customers to the store by other strategies such as refurbishing the Kmart stores and shutting down stores that were not bringing in the profits. He also increased client services by member incentive and by ample stocking the Kmart stores with more attractive features and items. Ample stocks meant more initial capital was needed to maintain them and this increased the expenditure of the stores. Kmart had to spend more than $2billion on expenses such as supply control techniques. To  stay in touch with  how Kmart’s customers were reacting to the new services offered, Charles came up with a toll- free service that would cater for customers who had any complaint about anything at Kmart and would also get the opportunity to share their shopping background at Kmart. To encourage every customer to use the toll-free service to enable Kmart management get feedback, Charles Conway used $10,000 sweepstakes for one caller who would be lucky enough to win. Staff member incentive was in terms of store stocks and awarding quarterly money bonus. (Turner, 2003).

Charles Conway had promised to make Kmart the leading retail store within a period of two years. His goal was to facilitate low pricing in clothes, household items and packed food for most families. Reorganization of Kmart was supposed to increase its output in the stores, list of stocks and data system. Charles closed down more than 72 stores and cut the employees by 5000.He even declared that he would spend $1.4 billion to upgrade the information system and additional $263million   within the two years that he promised to make Kmart one of the greatest retail stores. (Turner, 2003).

Back ground of Anne Malcahy and his organizational framework

Anne was born in the month of October in the year 1952.She served as the chair and chief executive officer in a corporation known as Xerox .She was installed as the CEO of the corporation on the month of August, the year 2001.She has also served in other corporations as a director namely: Citi group and Target company (Jones, 2010).

Anne Mulcahy was born in a small town known as Rockville Centre which is located in New York. She was the only girl child in her family and schooled in a catholic institution. She acknowledged a B.A in a field like English and reporting form the college of Marymount (Bland, 2009).

Anne Malcahy started working for Xerox as an agent who dealt with sales and its characteristics in the year 1976.She was promoted to higher ranks. She became the vice president in charge of human resource and ensured that allowance, benefits, strategic planning in human resource and setup management and training programs for workers .After serving in the human resource sector she became an overall chief supervisor vice president in the year 1998.Although she had no intentions of becoming the chief executive of Xerox she was shortlisted by board of directors in the year 2001. (Jones, 2010).

After she was installed and started her term, she went on a reorganization mission. Anne reduced yearly expenditure by an estimated amount of $1.7 billion and also cut down the human labor by more than 25,000.She sold out $2.3 billion assets that the company did not did and thus reduced the debt of Xerox by a very big amount. The stock prices of rose from $ 8.25 in January 2002 to $10.05 when she became the chief executive officer for Xerox (Bland, 2009).

Anne Malcahy faced a lot of a challenges .Her organizational framework faced challenges head on and provide sustainable and economic solutions to the problems. Anne utilized all of her skills in leadership to propel Xerox to greater heights. She was simple and she communicated effectively and at the same time listened to everyone including customers and other workers. She concentrated all of her strengths in initiating measure and policies, meetings with employees at halls and requested them for their ideas and prepared them for a layoff due to the tough financial times. Anne emphasized that the top managers and engineers should make a point of engaging with other workers. At this point Anne was interested in ensuring that the needs of the customers are met by anyone who served in the company, no matter the position. (Bland, 2009).

Anne Malcahy management strategy was to utilize her budget in coming up with a new type of digital copier. This digital copier would be used in both medium and large businesses. Other products of Xerox would be manufactured in a manner that would use few resources yet the quality would remain high, pricing of the product low and acceleration would be better than what their competitor offered the market. (Jones, 2010).

When Anne Malcahy reduced workers in the organizational structure and decreased the number of posts and levels that comprised the management hierarchy by 26%, management became easier. The number of employees was decreased from 95,000 to 55,000.The reduction in the number of employees improved product creation and was cost effective to the Xerox Corporation. Chopping off management hierarchy eased and speeded up decision making style and ideas were applied at faster rate and also the response to a problem was spontaneous which enabled quick recovery of the company’s market share. Her strategy to involved top management in engaging customers made the services of Xerox Corporation more customized to fit the needs of the customers .In 2006 and 2007 the profit merging of Xerox Corporation increased by 11%.(Jones, 2010).

 

A comparison of how the subordinates related to Anne Malcahy and Charles Conaway.

Anne Malcahy used effective communication to influence how subordinates related to her. She used communication as an instrumental tool to ensure that her title enabled a firm development of network between clients and workers. She spent the first 90 days as CEO travelling to different branches of Xerox Corporation and lend a listening ear to anyone who had an opinion on what the company was doing wrong to. This drummed up honest feedback from various people which in turn built an honest and confident relationship with her subordinates and peers. Effective communication applied by Anne Mulcahy set the pace for solving any looming crisis as subordinates had confidence and trusted in what she was doing. Effective communication also gave subordinates a sense that she knew the challenges they faced and had a solution at hand. Therefore she integrated the whole organization and subordinates had faith in her. Therefore she had an easy time implementing policies in the organization. (Grant, 2008).

On the other hand Charles Conaway was not an effective communicator. For example Kmart used a promotional type of business model. This business model was used to advertise blue light by putting circulars in newspapers. The only disadvantage that this business model had is that it could not predict market demand and heavily depended on the administration style of Charles Conway. Therefore he could not notice any loophole in his leadership style. If he could have consulted his subordinates he could have used their feedback to come up with another effective model that could have focused on a particular market demand that is easier to predict. (Grant, 2008).

Kmart also consistently lost to its competitors as it was deemed old fashioned. It did not change according to what its customers wanted and this points to poor communication between the subordinates and the top leadership of Kmart. Due to lack of proper communication it had a poor selection of items in its stores which drove clients away. Ineffective communication with subordinates and customers made it hard for Charles Conway to know which plan is workable and to what extent it was workable .Pricing at Kmart was very high giving customers a reason to choose another store with more affordable items. The systems set up by Charles Conway did not effectively support Kmart’s business actions and the link that missed between data system and business actions was effective communication. If Charles Conway could have used effective communication he would know how to utilize the feedback from subordinates into a business process that functioned without missing any mark. (Grant, 2008).

 

Theories that relate to each leader

Anne Mulcahy is a leader who falls under the leadership theory of behavior. This is because Anne exhibited characters that endeared her to the people she led. Behavioral theory focuses on the actual character of a leader and not their social, cognitive or physical factors. This theory focuses on how the behaviors of individual makes them good leaders and how behavior is a guide line to performing the role of a leader. Therefore anyone can become a leader as long as they maintain a certain behavior and a disciplined way of doing thing. Also, behavior dictates the way one will handle their other characters as leaders .Behavior theory categorized leaders into two namely: leaders who were fully concerned with achieving their tasks and accomplish goals for their companies and leaders who showed concerned to other people and they also carried out their duties. (Bland, 2009).

Ann Mulcahy whose leadership qualities can be seen in her behavior or the manner in which she conducted herself. She conducted herself in a way that promoted loyalty .Anne served as a CEO. She committed herself fully and made decisions that would ensure that the Xerox Corporation improves its state from bankruptcy .Anne also valued other employees even though she reduced jobs in order to enable the company progress on the right track. She also showed concern on the plight of people. She was not abusive and was flexible with her plans to fit everyone in. These behaviors made her gain favor with people and she was able to get a chance to direct her followers. (Bland, 2009).

On the other hand, Charles Conway falls under the contingency leadership theory. This theory elaborates that there is no specific manner in which leadership and leadership styles should be established. Instead leadership thrives on very specific bearings and conditions. This implies that a person can achieve more in particular places or positions and when they are transferred to a different field they perform dismally. This theory tries to argue that leaders’ characters are connected to the situation or atmosphere in which a leader exercises her mandate. This leadership theory perfectly describes Charles Conway. He was a leader who had had great success in managing drug stores but when he was transferred to the other side of the corporate world as Kmart CEO he failed. Failing does not mean he is not a good leader but simply means that he was operating under different situations that called for better judgment and decision making. (Turner, 2003).

Conclusion

Leaders should ensure business system framework set up is in line with business procedures and strategic planning. One of the main reasons why Charles was a failure is that he failed to realize this glaring fact. This was the underlying problem that made his long and short term tactics fail. Anne was quick to implement her plan strategically into fully operating business models that could give out results.

 

 

 

 

 

 

 

 

 

 

 

 

References

Zyman, S. (2002). The end of advertising as we know it. New York: John Wiley and Sons Ltd.

Haig, M. (2004). Brand failures: The truth about the 100 biggest branding mistakes of all time. London

Turner, M. L. (2003). Kmart's Ten Deadly Sins. New Jersey: John Wiley & Sons

Jones, G. R. (2010). Organizational theory, design, and change. Upper Saddle River, N.J: Prentice Hall.

Bland, C. J. (2009). Faculty success through mentoring: A guide for mentors, mentees, and leaders. Lanham, Md: Rowman & Littlefield Education

Grant, R. M. (2008). Contemporary strategy analysis. Malden, MA: Blackwell Pub.