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Date Submitted: 11/08/2010 01:18 PM
DEMBA 701 "Iggys Bread of the World" Case Study five Team B: Thorsten Podlech
Saturday, December 5th
Who: Igor and Ludmilla Ivanovic are the owner of Iggy´s Bread of the World, a fast expanding and high quality bakery. Does the companies growth and hiring of new business professionals ultimately lead to a more successful company with happier employees?
What:
• The company was family owned and run with employees of whom many immigrated into the USA
• The owners are experts in making high quality products but are not specialists about financial and strategic decisions • Owners said that with "each phase of growth they felt they were losing their influence over the organization". • The decision to hire a COO, Matthew McRae, did not have a positive impact on their business., • A business idea of the founders is: "it's not just a business where we need to make money. I want our employees to get pleasure out of what they do" • Nikola Ivanovic is responsible for finance and bookkeeping • Small decisions are left to employees themselves • Owners do not want the company to be franchised over the USA • To grow the company it was the first time necessary to take out loans • The new COO hired friends from outside the company for marketing and CFO • Nikola worried that "changes in the company's structure were being made too quickly" • Nikola said "people who have been here since the beginning have a feel for Iggy's in away that new people cannot." • Ludmilla Ivanovic returned into business operations after the company grew bigger to re-install the culture of the "old" Iggy's • Problems between COO and owners grew and could only be settled by an external intermediate • COO felt under-compensated
So What?
Hiring an COO did not have a positive effect on the company's development. If conflicts between COO and owners persist in the future, employees become
demotivated, the product quality will decrease and high-end and high-volume customers might stop...