International Business - Case Study

Published: 2021-07-21
1174 words
5 pages
10 min to read
Carnegie Mellon University
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Cushy Armchair is a world-renowned furniture business which specializes in making armchairs. The company has grown tremendously over the last decade and has now been acquired by Cabletronica. The Board of Cabletronica has appointed Alison as head of the business who is tasked with ensuring that the firm excels in the industry. This paper aims to examine the case scenarios that Alison will face when putting changes in the business.

Organizational Culture

The organizational culture of Cushy Armchair is characterized by a simple hierarchal culture. The reason is that Alison as the new CEO can make a hasty decision without the consent of other stakeholders as well as other leaders in the company. As such it is easy to implement new policies and decisions can be actualized fast. Also, the organizational culture of the company is also characterized by fixed ideas as it is a bit hard for the staff members to adapt and accept change especially if the change is a top-down messaging. For instance, when Alison Sampson the new CEO sent the email to the design, purchasing and marketing managers concerning the changes towards consolidation of operations in the company, none of them seemed to have followed the instructions (Zheng & Negenborn, 2014). Therefore, the organizational culture of the company acts as a hindrance towards change.


Cabletronicas new strategy is to centralize the operations of the company as opposed to the previous operations which have for a long time been undertaken in a decentralized manner. As such, the newly appointed chief executive officer who is Alison Sampson makes a hasty decision and sends an email to all the other companies requesting some changes in the departments of design, purchasing, and marketing. The specified instructions are that the managers ought to systemize all the advertising campaigns through New York, make excess orders of both fabric and chair glide-mechanisms (Schmitt et al., 2013). Also, any substantial features and design changes to be approved by staff members from New York. The main strategy of the CEO is to consolidate all the operations of the company with an attempt to achieve both economies of scale as well as the scope of the company. The leadership in Cabletronica is very supportive of the new strategy has easily been implemented.


Cushy Armchair is currently performing very well. The company has expanded their scope through investing in companies that are related to them in the industry. Cushy Armchair is the leading producer of sofas and upholstered recliners. Also, the company leads worldwide in luxury recliners. As much as economies of scale has been insignificant and the national market contrast is considerable, there is evidence that the decentralized model of the company has been very beneficial for the company. Also, the company will be finalized on a business transaction that will allow them total operating and equity control over the company. As such, the transaction will complement the current acquired world furniture.


Some important changes are happening to the competitors and the consumers in the industry. The Armchair industry evolves every day as a result of the ever-changing consumer behavior. Examples of factors that affect the industry are the changing preferences on the design, the attractiveness of the armchair to the specific market, and so forth. Also, competition in industry has also been increasing due to the barrier to entry and the number of consumers increasing every day


The new tasks required include implementing the new design and procurement changes to the Cushy Armchair product line. Alison has introduced the centralized system in the company which requires the activities conducted by the different 17 branches must be accounted for and hence every manager will have to communicate to the headquarters to perform some operational duties.

Cushy Armchair uses the decentralized system to perform their operational activities. The company has branches in 17 countries, and each branch does their business activities which include; supplies, sales and marketing, advertising, and so on. Therefore, it does not need guidance from the headquarters in their activities. The current system is different from the what Alison is proposing (Modrak,, 2014).

Certain issues are poised to arise since the new system will ultimately change the operational activities in the branches. The new system will be faced with setbacks since the managers will be adamant to apply what will be instructed through the email. Each branch will have preferences for their armchair design depending on the market around and hence; it would be hard for the branches to adopt the new glide mechanism system.

Task and People

The current design, sales and purchasing managers must report to the country manager in the established business in the country. As such, the country managers have the power to choose the design that will be used in a particular country and hence, the executives in the headquarters have less power in controlling them. Also, the sales and purchasing manager will align their duties as according to what the country manager instructs.

The new reporting structure will change how the design, sales and purchasing managers will be operating in their respective countries. The purchasing managers will be forced to report to the world furniture's division based in New York if its to the excess of HK $35000. Also, Alison instructed that advertising campaigns and design changes will have to coordinate through the headquarters.

Evaluation and Reward Systems

The country managers must evaluate and reward the employees who are working at their firm. The assessments that the managers evaluate mainly concern the production, design, sale, and supplies of the company. The results of the evaluation are forwarded to the headquarters which they will use to evaluate whether the companys activities are operating within their strategic plan. The compensation systems of the firms in the different companies are handled differently since these firms are evaluated separately. The new system, however, will do those businesses in the various countries to be assessed as one entity and hence will have to be rewarded using the same system.


The companys employees have many roles which include; marketing, production, front-office and back-office activities, and many others. All these roles are being coordinated by Alison who is the president of the Cushy Armchair. The leadership under Alison is necessary for the implementation of change since she will introduce new strategies and design models that will lead the company to success (Mok 2013). An attractive compensation system is a major factor that impacts employees performance and motivation, and hence it should be used by the executive management in the headquarters in designing systems to reward employees.


Modrak, V., Radu, S. M., & Modrak, J. (2014). Metrics in organizational centralization and decentralization. Polish Journal of Management Studies, 10.

Mok, K. H. (Ed.). (2013). Centralization and decentralization: Educational reforms and changing governance in Chinese societies (Vol. 13). Springer Science & Business Media.

Schmitt, A. J., Sun, S. A., Snyder, L. V., & Shen, Z. J. M. (2015). Centralization versus decentralization: Risk pooling, risk diversification, and supply chain disruptions. Omega, 52, 201-212.

Zheng, S., & Negenborn, R. R. (2014). Centralization or decentralization: A comparative analysis of port regulation modes. Transportation Research Part E: Logistics and Transportation Review, 69, 21-40.

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