Analysis of the Case

“Iggy’s Bread of the World”

(In partial fulfilment of the WAC course)

Submitted to Prof. Urjani Chakravarthy

Submitted by
Rishabh Sancheti
(2015IPM087)
 Letter of Transmittal

To
Prof. Urjani Chakravarthy
IIM Indore

Date- 3rd December 2018

Subject- Recommendation of the case “Iggy’s Bread of the World”

Dear Ma’am,
This report analyses the case Iggy’s Bread of the World and provides
recommendations based on the evaluation done using certain parameters.
I hope you find the report satisfactory.

Sincerely,
Rishabh Sancheti
 Executive Summary
Iggy has appointed Mr. Mc Rae as their new Chief Operating Officer (COO).
He has presented in front of the board, a proposal to bring out some changes in
his compensation package, because he believes that it is not favourable for the
organization and the board. Now, the founders have to decide the future course
of action.
They need to decide whether they accept the proposal of Mc Rae and let him
run their business, or reject the proposal and search for his replacement.
Another option is to allow Mr. Ivanovic take the control of the Iggy’s
management. Finally, it is decided that Mr. Ivanovic acquires the power and he
would take Mr. Nikola’s help so as to run the business smoothly. Also, they
should try and engage in management consultancy to help them suggest and
advise Igor in such a way that business runs efficiently and also adhering to
Iggy’s value system at the same time.
 Table of Contents

1. Situation Analysis
2. Problem Statement
3. Options
4. Criteria for Evaluation
5. Evaluation of Options
5a. Evaluation Table
5b. Explanation
6. Recommendation
7. Action Plan and Implementation
8. Contingency Plan
Situation Analysis
The bakery shop Iggy’s was founded by Mr. Igor Ivanovic and Mrs. Ludmilla
Ivanovic. The bakery was based in Watertown, Boston; the founders had a great
passion for baking and also creating products of high quality. They established
their bakery shop based on certain values, such as to deliver a high quality bread,
made of natural ingredients, providing a working environment where their
employees can have fun in their work and get involved in the different business
processes and help build a great relationship with the customers and the
community as a whole. The employees were treated like family members. In a
very short span of time, the business grew to such an extent that there was stock
outs as the demand went out of the capacity. This worried the owners as they
thought about the losses that would arise if they refuse the orders of the premium
consumers. This sudden demand surge forced them to take the expansion route.
Ivanovics were hesitant to go with professional management and stringent
organizational structure but finally, they appointed Mr. Matthew McRae as the
Chief Operating Officer (COO) to be able to handle this difficult situation. After
that, Mr. McRae started forming his own team of managers; most of them were
picked up from his personal contacts and relations. The new team’s approach to
management was quite different from the previous team and this resulted in a
tussle between the staff and the management team.
The situation worsened when Mr. McRae and his team started taking important
decisions without the permission of the founder, Mr. Ivanovic. McRae tried
blackmailing Igor by presenting a letter of resignation if his compensation and
bonus were not increased. This made the company board have a meeting and
decide the future course of action.
Problem Statement
What should Igor and the board members do in this situation?
Options
1. Accept McRae’s demands and let him run the business
2. Reject McRae’s demands and replace him with a new management team
3. Reject McRae’s demands and let Igor take over the management
Criteria for Evaluation
1. Growth and Expansion of the Business
2. Brand Value and the Company’s Image
3. Employee Satisfaction
 Evaluation of Options
a. Evaluation Table
Criteria Growth and Brand Value and the Employee
Options Expansion of the Company’s Image Satisfaction
Business

Accept McRae’s
demands Mid Mid Low
Reject and replace
Mc Rae
Mid Mid Mid
Igor take over
management Mid High High

b. Explanation
This part explains the possible outcomes of choosing different alternatives:

Option 1 (Accept McRae’s demands and let him run the business)

Since McRae had already run a successful company, he came up with a lot of
good ideas into Iggy’s. His past performance was more growth oriented and he
helped a leasing company to become a public so , he was well in sync with the
business trying to expand and grow itself. But, his approach towards team
selection and way of working had created dis-satisfaction among the employees
which further led to quality degradation. This distinct difference in the new
management team and the existing employee base was causing a dilution of the
company culture and value.

Option 2 (Reject McRae’s demands and replace him with a new management
team)

Rejecting McRae’s proposal means replacing him and his team from their
positions. However, current scenario also demands to do so because their
approach to the business wasn’t aligned with the core value of Iggy’s. So,
Ivanovic should hire a new management team in order to run their business.
Before joining, new team should be told to retain the culture of the company along
with expectations of the employees while considering any major decision.
Option 3 (Reject McRae’s demands and let Igor take over the management)
Since Iggy’s was running very well before they thought about the expansion of
business, so it would make sense to give power back to Mr Ivanovic. Since their
primary aim wasn’t not only to gain profit but to satisfy their customers with high
quality product. Hence, it makes sense that they should follow their original goal
of providing high quality bread to their customers and a well-satisfied family
oriented work place to their employees.
Recommendation
Iggy’s should reject Mr. McRae’s demands and let Igor take over the
management.
Action Plan and Implementation
The board should ask Mc Rae to step down from his COO position and leave
the organization along with his team, as their method of handling business was
not in sync with the core value system and organizational culture of Iggy’s. Igor
should acquire the position of power and he must take Mr. Nikola’s help in
running the business smoothly. This process needs to be done in a proper
manner otherwise the transition might lead to some problems. After this, Iggy’s
should hire a management consultancy firm which has a prior project execution
experience, to aid them and advise on the solutions and courses of action,
keeping in line with the value and culture of Iggy’s bakery.
Contingency Plan
In case this plan fails, the Ivanovics should change the management team and
let them run their business professionally. They must clearly convey all their
expectations and value system of the company to the new team and ask them to
help ensure growth and success of their organization while keeping in line with
their value system and organizational culture. However, the Ivanovics should
take the majority of control and power in their hands so as to avoid any such
kind of unwanted situations in the future of the organization.