Andrea Jung Case

1. Describe Andrea Jungs leadership agency. How did her upbringing limit up ones mind that style? What assumptions about world nature does she hold? Andrea Jung is the quintessential transformational leader. Jung showcases her transformational leadership style with her charisma, delegation of authority, reflection of subordinates, and her ability to constantly modify the organizational structure of Avon. Jungs charisma is seen in the strong passion she has for Avon. This passion was the whole wayly manifested when Jung turned down a CEO position at another comp all to remain the number two person at Avon.The genuine bed that Jung has for Avon and its impact on society serves as a motivational leadership excessivelyl. The influence of Jungs positive attitude toward Avon promotes an atmosphere of cooperation and teamwork. Much like feller transformational leader Howard Schultz, Jung is firm believer in delegating authority. An theoretical account of Jungs trust in delegatio n was seen in her 2001 appointment of Susan Kropf to COO. Despite Kropfs two-year-old age, 31, Jung believed she was the right woman for job. Jungs instincts proved to be correct, as Kropf saved Avon roughly $460 million.In working her way through the many levels of Avon, Jung was capable to represent the importance of gross revenue representative moral, as they were the heart of Avon. It was through this knowledge that Jung decided to increase representatives commission payouts. This action is a clear example of her consideration of subordinates and Jungs transformational leadership style. Jungs leadership at Avon has always been characterized by her persuasion in modifying the organizational structure. Never were these modifications for her personal benefit, rather the benefit of Avon as a whole.From her initial changing of the view statement in 2000, to her new business model in 2005, Jung has always put together party goals ahead of any personal interests. Andrea Jungs up bringing has had a clear influence on our transformational style of leadership. Andreas p arents instilled in her a strong work ethic at a very young age. This work ethic, combined with her Asian parents high belief in in-group collectivism, put in the stage for Andrea to take extensive pride in groups that she holds near to her, such as her family and Avon.On the contrary, Andreas upbringing was not one characterized by high individualism. A 2006 USA at once story states, (i)ntroversion might be partially explained by culture, genetics 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 capital of Tennessee for seven 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 traditional Asian household and was, therefore, reserved. As the above st atement explains, the modest climate that Andrea was increase in was not one were she was able to showcase her assertive and confident side. In Jungs rise to CEO one of her main obstacles was revealing her pugnacious side, a side that was clearly surpressed as a youth. Andrea Jung possesses an array of assumptions on human nature. Jung is a firm believer in having a genuine tell apart for what you do in life. She assumes that not doing what you want to do is a sacrifice that imprints both men and women.Andrea also believes that innovation is the key to finding success in business, however, Jung assumes that this innovation can not be used in a means to hurt the company. Jungs strongest assumption on human nature is a persons sound principles and passion will guide them through both the good and bad times. Jungs charasmatic demeanor, combined with her modest upbringing, enable her to abide these optimistic assumptions on human nature. 2. Does Jung practice high booking concern ? Explain your answer. Andrea Jung practices a high amour style of steering.Jungs high involvement management is seen through her reliance on decision causation, information sharing, and incentive salary. 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 long run for Avon, as Kropf saved a monolithic amount in reducing the amount of suppliers. For Jung to put such responsibility in a subordinate is a testament to her high involvement approach. Avon is characterized by an open flow of information for all its employees. mention among this data is Avons spreading of facts on female complaisant and health answers. Jungs continuation of Avons traditional spreading of information pamphlets enables both her manpower and customers to share in Avons determine. The distribution of these pamphlets enables Avon to form a special bond with their customers. High involvement manager s believe in compensating their employees based 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 existing sales members, based upon reps that they personally recruit. 3. To what degree does Andrea Jung demonstrate the attributes of wound up intelligence? 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 projects that her behaviors affect her workforces feelings and beliefs. The productivity of her employees is a form 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 ability to understand that her attitude, alone, is a key motivational force for Avon. Emotionally intelligent leaders are able to remain tranquillize in both the good and bad times.From her time as a Bloomingdales management trainee, to her watercourse 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 solace and open minded demeanor. Motivation is synonymous with Andrea Jung. She possesses a passion for Avon and its spate of elevating women in the community. Jung has a running record of constantly looking to improve mathematical operationes at Avon. Her delegation of authority to Susan Kropt and her proposed correctional action plan are clear illustrations o f 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 importance of a healthy equalizer between a professional and personal life. It is this empathy that enables her to be an effective manager. Her ability to counterweight her personal and work duties sets an example for her workforce. Jung also has shown that she is not afraid to come upon decisions that directly 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 will pay far great value in the long term than the short term balance sheet savings. Jung has established an array of effective working relationships with current and past colleagues. Her past relationships with Barbara Bass and James Preston laid the framework of her proficient social skills. Her belief in the importance in social relationships is depicted in her decision to keep 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 supreme 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 challenger from large discount stores, as well(p) as the trend of women joining 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 care businesses and Tiffany & Co. , a high end jewelry retailer. In 1988 Avons new CEO, James Preston, recommitted the company towards its direct sales of personal care products. After selling off non core business departments, Preston focused on a restoration of harvest-feast at Avon. Avon was characterized in the 1990s by a vision centered on a global consciousness of women. Their recommitment to their direct sales model was seen in their global sales force of roughly 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 opposite year for Jung, as Avons demand was in decline. Given the changing commercialise conditions, Jung proposed a new business model that focused on change magnitude R&D, channel support, and publicize. 5. Is Avon a learning organization? Explain your answer. Avon possesses many of the key attributes of a learning rganization. Through its constant abili ty to react to securities industry 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 experienced a classification 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 learned the complexity of Avons marketing materials.For a company to be considered a learning organization, it has to father 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 line up to its advantage. It is this learning environment that has permitted Avon to experience such succe ss. 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 match for Avon, as the majority of Avons workforce is female. 6. How does Jung leverage human capital for Avons combative advantage? Is this hawkish advantage sustainable given the prevailing competitive pressures and forces driving industry change? Avons direct sales distribution is an inherent human capital leveraging characteristic 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 capital influences. Jung also motivates her sales force through her foreign travels, showing to her associates that individually 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 largely 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 recognize 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 thanks to their decades of personalized business. Avons growth potential is in the international markets. As India and China continue to alter their economy, their cosmetic and toiletries spending is set to skyrocket.Avons increased international sales hea dcount is the key in addressing their growing international opportunities. As long as Avon continues its innovative nature and stays committed to its bread and butter, direct selling with independent sales representatives, they will continue to perform well. 7. In 2005, what strategical 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 facing Avon was the softened demand in their developed North American markets.Avons second problem was the increased competition in their growing international markets. This was an exceptionally troubling for Avon, as these markets were the key to their hereafter growth. These two problems are clearly reflected in Avons financial performance. Exhibit 1 of the case, Avons selected financial data 1995-2005, reveals these issues as they relate to headcount. Avons number of US employees dec reased 700 employees (7%) from 2003 to 2005. The decreased headcount in the US is a clear indication of demulcent demand in a developed market.The international headcount tells a different tale. Avons international headcount nearly 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 total net 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 scarcely 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 in come 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, charismatic 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 solution 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 focusing company resources on the appropriate issues. The high emotional intelligence of Jung will also e nable her to properly address Avons current dilemmas. She understands that in order for Avon to tackle their current difficulties, she must(prenominal) 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 alter 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 plan Jung and her leadership team have developed. What recommendations would you pop the question to them? Avons four tier proposed correction plan is made up of a renewed commitment to brand awareness, a focus on their commercial edge, an elevation of commercial effectiveness, 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 more 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 proposal is solid, there are two key items that Avon must focus on for this initiative to be successful. Avon must do the necessary market research to ensure 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 second point Avon needs to pay close attention to is that they are getting 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 allot 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 traditional 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 importantly decreased by various 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 valuable initiatives to strive for. From Avons perspective, I would recommend that they develop multiple 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 event 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.