Written Analysis and Communication

A Report on
Iggys Bread of the World

Submitted to
Prof. Sweta Kushal
In partial fulfilment of the requirements of the
Written Analysis and Communication course
Submitted by
Hariharan A
2013PGP151
Section C
On 3rd March , 2014

LETTER OF TRANSMITTAL
A Report on Iggys Bread of the World
3rd March, 2014
Mr. Igor Ivanovic
Owner of Iggys Bread of the world
Dear Sir,
I am enclosing a report of my understanding on the case Iggys Bread
of the World as part of the Written Analysis and Communication course
requirement.
The case has been analyzed as instructed and is being submitted for
consideration.
I recommend that a new management team of internal employees
should be formed.
Yours sincerely,
Hariharan A
Consultant
ABC Company

EXECUTIVE SUMMARY
Mr. Igor and Mrs. Ludmila Ivanovic, founders of Iggys Bread of the world needed
someone to help them in financial and administrative duties as they expanded the
bakery. Mr. McRae, who was employed as COO, formed a new management team
whose functions were not supposed to be employee friendly by both the founders
and the workers. This created conflict between the founders and Mr. McRae. Mr.
McRae felt he was undercompensated and submitted his compensation proposal
when asked by the founders, which included considerable gain in the profits. The
proposal seemed unreasonable for the founders. The business in expanding and the
founders are in need for a professional help. An effective leadership in the company
is must in order to expand the business. Should they heed to Mr. McRae demands?
Or should they replace Mr. McRae? Or should they form a new management team of
internal employees? The founders priorities would be employee satisfaction, passion
should precede money, the skills and abilities required by the members of the team.
Based on the evaluation of the options it is suggested that a new management
team of internal members should be formed to ensure effective leadership in the
company.

Table of Contents
Executive
Summary.....
............3
Situation
Analysis....
..............5
Problem
Statement
..6
Options
....................6
Criteria

for

Evaluation
.6
Evaluation

of

Options
..6
Recommendation
..................7

Action
Plan
..7
Contingency

Plan..

.7

SITUATION ANALYSIS
Iggys Bread of the World was founded in Boston by Mr. Igor and Mrs. Ludmilla
Ivanovic. Mr. Igors passion for making breads and Mrs. Ludmillas efficient
management made Mr. Iggys a huge success among the customers. At Iggys the
bread was made by touch and feel, and it was never compromised on quality. Within
a year the growth was so enormous that they were functioning beyond their
capacity and were rejecting big-name customers. The employees were selected by
the owners and most of them were immigrants. Mr. Igor mostly preferred people
who have no prior experience on baking, so that the employees could be trained the
Iggys way. The culture was very friendly and the owners entrusted the employees
to take the decisions for small matters. Soccer matches, celebrating employees
birthdays, english classes made the organization friendlier towards the employees.
The culture at Mr. Iggys was organic which had no fixed schedules and offered job
rotation so that each employee knows entire organization as a whole. For Mr. Igor
5

and Mrs. Ludmila profits were not a concern, their passion for making bread was the
major reason for Iggys success.
Mrs. Ludmilla, as time passed found it difficult to maintain a work life balance as she
needed much time to look after her children. This intensified the need for someone
who would help them, and Mr. McRae was identified to suit this need. Mr. McRae,
who had previously run a leasing company, was appointed as the COO.Mr. McRae
soon formed a management team of his own without consulting the founders. The
changes were so rapid. Though Mr. Ivanovics were not happy with the changes, they
provided chances for Mr. McRae to show progress. The problems escalated when Mr.
McRae hired Diane Colman without consulting Mr. Ivanovics. When Mr. McRae hired
another top manager, Mr. Ivanovics lost patience. Mr. McRae submitted the
resignation stating that they were not ready for him both personally and
professionally; and withdrew it the next day. It became clear that Mr. McRae felt he
was undercompensated and so the Mr. Ivanovics asked a proposal of his
expectations. The proposal included a raise in the profits for which he was not a part
of.
The business was growing and they needed to ensure effective leadership in the
company. How should Mr. Ivanovics proceed in this regard? Should they proceed
with Mr. McRae and accept the compensation proposal? Or should they look for the
advisors to be as COO? Should they form a new management team of internal
employees?

PROBLEM STATEMENT
Feeling discontent with the new administration, how should Mr. Ivanovics ensure
effective leadership in the company?
OPTIONS
1. Proceed: Accept Mr. McRaes proposal and give him another chance
2. Replace: Mr. McRae can be replaced by one of the advisors and the others
hired by Mr. McRae could be retained

3. Form: A new management team could be formed comprising of internal

members
CRITERIA FOR EVALUATION
A. Ensuring employee satisfaction
B. Passion should precede over money
C. Ability and skills
EVALUATION OF OPTIONS
1. Proceed
Mr. Ivanovics can give another chance for Mr. McRae and team. Employees have
perceived that the team is not working with their interests in mind and this option
might not satisfy the criterion A (Employee satisfaction). Since Mr. McRae has
indicated that money is important in his proposal, the criterion B (Passion should
precede money) might not be satisfied. At Iggys, the profits was not a concern, but
they believed in passion and Mr. McRae could not fit into its culture as his
expectations are different. Criterion C is satisfied. Mr. McRae has the ability and
skills required for developing a business which was proved with his prior experience
in the leasing company. Given another chance he might provide the results and help
in Iggyss growth.
2. Replace
Mr. McRae could be replaced by one of the members of the advisory group and the
others selected by him could be retained. The advisors knew the expectations of the
employees and they could ensure that the decisions taken would satisfy the
employees. Since the others are retained, the effectiveness of the team as a whole
in satisfying the criterion A (ensuring employee satisfaction) may or may not be
satisfied. Though the advisors are passionate towards Iggyss now, their motives
might change once they come to power. So criterion B may not be satisfied. The
people picked by Mr. McRae were mainly due to relationships and not based on skills
and abilities. Criterion C may not be satisfied.

3. Form
Mrs. Ludmilla could form a new management team comprising of internal
employees. She could be a part of the team too. The criteria A and B could be
satisfied as the internal employees are aware of the culture and for them passion is
important. However the criterion C may not be satisfied since even Mrs. Ludmila
7

was not sure of taking certain decisions. The internal people are aware of the
technical aspects of the business and might lack the ability to take decisions
regarding the administrative and financial functions. This can be overcome by
organizing workshops on management and providing the team, training in dealing
the financial aspects of the business. Since job rotation already gives a full view of
the functioning of the organization, the internal team is aware of the process and
understands the practical difficulties of how a decision could affect the company.

Proceed
Replace
Form

Ensuring employee
satisfaction
No
Maybe
Yes

Passion
should
precede money
No
Maybe
Yes

Ability and skills

Yes
Maybe
Yes

RECOMMENDATION
Based on the above evaluation of the options, I recommend option 3 (form a
management team with internal employees)
ACTION PLAN
Based on the decision to form an internal management team, Mr. Ivanovics should
take the following steps

Reject Mr. McRaes proposal and dismiss the entire team formed by him
Select internal employees who could be part of the management team
Provide training on financial and administrative functions to the management
team
Mrs. Ludmilla could attend programs conducted by management schools to
understand the nuances of business
Combined with the old culture and new management team, Mr. Ivanovics can
expand the business

CONTINGENCY PLAN
As Mr. Ivanovics is confused whether to proceed with Mr. McRae and accept his
compensation proposal or to form a new management team of internal employees,
he can consider recruiting a HR Consultant who can provide a variety of general and
specific advice to Mr. Ivanovics in restoring a certain future for Iggys Bread.