Iggy’s Bread of the World

Report on the Case

“Iggy’s Bread of the World”

In partial fulfilment of WAC course

PGP 2018-20

Term - II

Executive Summary

Igor and Ludmilla Ivanovic founded Iggy's Bread of the World in 1994. The bakery focused on quality of the product, relationship with employees and value creation for its customers. This idea led to the creation of a healthy organizational culture that helped Iggy's to grow rapidly. As the company grew Igor and Ludmilla realized that they weren't able to cater to the growing demand. To handle the increase in accounts and ensure the growth and expansion of the company they hired Matthew McRae who previously ran a leasing company, as the COO. Matthew brought about different changes in the company that degraded the company's culture and strained his relationship with the founders. Eventually, Matthew comes up with a staggering proposal. This report analyzes different options and suggests how the Ivanovics should respond to the proposal.

Contents

1. Situation Analysis

2. Problem Statement

3. Options

4. Criteria for Evaluation

5. Evaluation of Options

6. Recommendation

7. Plan of Action

Situation Analysis

Iggy's Bread of the World was the culmination of Igor and Ludmilla Ivanovic's dreams. Igor was passionate about baking and creating products that made the customers happy, and Ludmilla wanted to create an environment that fostered cooperation, communication and a sense of accomplishment for all employees.

Before opening Iggy's Bread of the world in 1994, the Ivanovics opened their first bakery- Pain d'Avignon in the year 1992. Though the business was successful, Igor and Ludmilla had differences with their partners and eventually got out of the business.

As the business grew, Igor and Ludmilla found it difficult to open new accounts and turned down big-name customers. They physically expanded the company and felt the need of an experienced person who could help them with the financial and administrative side of the business. They hired a person called Matthew McRae as a consultant. Matthew previously ran a leasing company. He understood and developed a passion for the company. Eventually, he was hired as the COO in October 1994.

Soon after McRae assumed the position of COO, he brought in significant changes. He built his own management team. The Ivanovics felt that the changes were happening too quickly and that McRae was hiring people behind their back. Also, the employees at Iggy's felt that the management team wasn't giving importance to the culture of the company.

Also, Igor confronted Matthew about Diane Coleman's poor performance. Diane Coleman was hired by Matthew as the Vice President of Sales and Marketing. Moreover, Matthew and Diane hired another top manager without the consent of Igor and Ludmilla. This led to worsening the relationship between Matthew and the Ivanovics. As a result, Matthew wrote a letter of resignation but later withdrew it. Matthew was unhappy and felt that he was under-compensated. So he came back with a staggering proposal and presented it to the board. The board members and, Igor and Ludmilla didn't know how to respond.

Problem Statement

How should the Ivanovics respond to Matthew’s staggering proposal?

Options

• Say no to Matthew's proposal and hire another person who is going to preserve the company's culture while taking care of the company's expansion.

• Accept Matthew's proposal of giving him a significant raise as well as bonuses based on profit.

• Reject Matthew's proposal and manage the business on their own.

Criteria for Evaluation

1) Culture of the company – Since the culture developed inside the company was the reason for its success, it is critical to keep the culture alive for the company’s well being.

2) Growth of the company – The company has seen remarkable growth and a significant increase in demand for its products. It should ensure that it has the required resources to handle this