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1. What economic factors that can affect business success are highlighted in the above text? Are there others that you can think of? 2. What about other external, non-economic, factors?

1. What economic factors that can affect business success are highlighted in the above text? Are there others that you can think of? 2. What about other external, non-economic, factors?

Management, Loose-Leaf Version
Management, Loose-Leaf Version
13th Edition
ISBN:9781305969308
Author:Richard L. Daft
Publisher:Richard L. Daft
Chapter10: Designing Organization Structure
Section: Chapter Questions
Problem 1ED
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based on this case study, 

1. What economic factors that can affect business success are highlighted in the above text? Are there others that you can think of?

2. What about other external, non-economic, factors?
Case Study Alison Mitchell joined The Look three months ago. The Look is a high street clothes retailer that is mainly based in the UK, but has some stores in continental Europe. Alison is a management trainee who recently finished her history degree at university. She has just come back from a management presentation in which the annual results of the company were announced. She left feeling slightly worried and a little confused. 'I know the economy has been doing badly and this has hit customer spending. Customers are worried about their jobs, which is not surprising given the high unemployment figures, and many of them have had their wealth hit hard by falling house prices. The economic climate is making everyone a little more cautious. This year's profits for the company were nearly £6 million, which is higher than our competitors. But the board of directors is apparently unhappy with this return, given the investment that has been made into the business. It wants a significant improvement in the coming year and stressed our role in making sure this happens. Six million is hardly a small number, but apparently it's not enough! We're now looking at cost-cutting measures including switching more to suppliers based in Vietnam. There are also plans for revenue growth by opening up stores in emerging markets, such as Russia and India. The growth rates of these economies are much faster that the UK and the board thinks that this opens up opportunities, although I don't think the weak value of the pound will help the expansion plans. In the UK, we've been told to prepare for a difficult future and look for ways of working more closely with our stakeholders to push up our profit margins. What I don't understand is why none of the economists seemed to predict this downturn. What's the point of studying economics is you can't do anything with it?'
Transcribed Image Text:Case Study Alison Mitchell joined The Look three months ago. The Look is a high street clothes retailer that is mainly based in the UK, but has some stores in continental Europe. Alison is a management trainee who recently finished her history degree at university. She has just come back from a management presentation in which the annual results of the company were announced. She left feeling slightly worried and a little confused. 'I know the economy has been doing badly and this has hit customer spending. Customers are worried about their jobs, which is not surprising given the high unemployment figures, and many of them have had their wealth hit hard by falling house prices. The economic climate is making everyone a little more cautious. This year's profits for the company were nearly £6 million, which is higher than our competitors. But the board of directors is apparently unhappy with this return, given the investment that has been made into the business. It wants a significant improvement in the coming year and stressed our role in making sure this happens. Six million is hardly a small number, but apparently it's not enough! We're now looking at cost-cutting measures including switching more to suppliers based in Vietnam. There are also plans for revenue growth by opening up stores in emerging markets, such as Russia and India. The growth rates of these economies are much faster that the UK and the board thinks that this opens up opportunities, although I don't think the weak value of the pound will help the expansion plans. In the UK, we've been told to prepare for a difficult future and look for ways of working more closely with our stakeholders to push up our profit margins. What I don't understand is why none of the economists seemed to predict this downturn. What's the point of studying economics is you can't do anything with it?'
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