RMIT University Vietnam

CASE STUDY ANALYSIS

-------------------

Subject Code BUSM4185

Subject Name Introduction to Management

Campus Hanoi

Assessment Name Individual Paper

Student Name

Student Number

Lecturer

Page Number 6 (exclude this page)

Word count 1616

I. INTRODUCTION
 RMIT University Vietnam
Bringing a business to a firm position in the market, getting great attention from customers
is always a big goal of every manager. To achieve that, managers must have wise strategies that are
in line with the goals of the business. However, poor calculations can arise many problems such as
Prestige – an upmarket men’s fashion retailer in HCMC, affecting the internal environment and
revenues of the enterprise.
This assignment will analyze those current issues of Prestige in order to come up with practical
solutions, as well as suggest some strategies applying both management theories and approaches.

II. CASE ANALYSIS

1. High labour turnover during difficult time
Labour turnover is a challenging business problem that a number of staff voluntarily or
involuntarily leave the company due to different reasons and the position vacancies will be replaced
(Bryan 2018). Losing many employees can generate negative effects on the organization. In this case,
as a result, the lack of labour turned out to be an issue on crowded weekends, which made the staffs
hard to perform well. The underlying reasons may stem from two subjective factors: Hyper-
competitive working environment and Abuse of power among employees.
a) Hyper-competitive working environment
Positive workplace competition acts as a motivator for any employees to achieve their sales
target. Employees with healthy rivalries show the high level of job satisfaction and earn higher salary
(Jacob 2020). However, too much competition may be counter-productive in the case of Prestige. If a
customer is assisted by many salespeople, it will leave an uncomfortable shopping experience
because of disturbance. For a fashion store providing professional service, this problem may expose
the unpleasant organizational culture, which results in high turnover within a short period (SHRM
2017). There does not seem to be a job connection between employees; here, each person works
independently only to achieve individual sales goal, not towards the overall goal of the company.
This has made full-time employees accidentally put pressure on themselves, hence increase the
competitive atmosphere, especially on customer-scarce day.
b) Power abuse among employees
The fact that full-timers take advantage of part-timers to do the cleaning has shown the
abuse of legitimate power. According to Expert Program Management (2018), legitimate power is a
formal type of power coming from your position in the organization. In this case, full-time
employees misuse their status as official labour and automatically give themselves the right to
mislead part-time employees without consulting the store manager. It can bring about unnecessary
conflicts between employees, in other words, this form of hierarchical culture negatively connects
with part-timers’ engagement and willingness to cooperate (Yariv & Sibylle 2016, p.861-876). In fact,
6 part-time employees resigning demonstrates the unfair competitive working environment, thereby
showing less interest in the job.
2. Ineffective management HR of the CEOs and Ms. Thu
 RMIT University Vietnam
When suffering from a difficult economic phase, the role of managers must be strengthened
to overcome such obstacles. However, the lack of flexibility in regulating the store of Ms. Thu and
high threshold of commission has caused the above problems. In other words, Prestige has to face
problems coming from the manager line: CEO and store manager.
a) Poor HR Management of the store manager
According to Michael (2017), Human Resource Management (HRM) is defined as a strategic,
integrated and coherent approach to the employment, development and well-being of the people
working in organizations. Back to the case, when salespeople are the source that directly interacts
with the customers, Ms. Thu does not pay enough attention to the employee performance, letting 3
salespeople assist a same customer. This action clearly creates chaos in the Division of Labour,
reduces professionalism in serving customers and thereby, causes a bad experience that forces them
to leave without buying. Now, many fashion stores providing styling service are opened in in HCMC,
if Ms. Thu does not adjust the customer service, Prestige will lose the repeated customers for other
businesses (Francis n.d) and the staffs also do not have chance to make sales to reach the target,
worsen their financial worries.
b) Ineffective compensation system of the owners
Employee performance has a huge impact on whether a company achieves its goals.
Managing employee performance properly will help the executives come up with effective strategies.
With the Prestige founders, they choose to offer high commission as an incentive to motivate her
staffs to work. Attractive compensation program can increase employee loyalty and performance,
relieve stress and turnover intention (Bachruddin, Chita & Arif 2019, p.239-265). However, in late
2020, this strategy shows opposite effect when full-time employees quitted because of not being
able to make a comfortable living. Although the 7% commission are quite high, the threshold of 5
million VND plays as a barrier for them to reach, especially when the customers are not consistent.
As the case provided, there are no more non-financial rewards (health insurance, vacation,…) to
activates the positive competition among employees, which leads to the problem in 2a) section.

III. SOLUTION SUGGESTIONS WITH SPECIFIC STRATEGIES

After taking the case of Prestige into consideration, it seems that the issues mainly come
from the internal resources which are the managers and staff. Consequently, Ms. Thu should invest
on professional management skills and also rebuild the working environment. In other words, the
company can improve the condition and maintain sustainability if having strong and proper human
resource management.
1. Building a stronger organizational culture
According to both theory and reality, strong and distinctive organizational culture is
important to the success of the company as it reflects the core values: how you run the business,
manage the flow of work, treat your customers and employees, etc. To change the culture of a
system, it must start from changing people’s ideas and values (Stefan and Mats 2015). If the
 RMIT University Vietnam
management team realizes this point, they can make efficient strategies and reconstruct the whole
system as their top priority (Warrick 2017, p.395-404). Back to this case, Prestige has a weak
organizational culture as there is little corporation and intimacy between employees, therefore, they
must be congenial with each other for a positive environment at work: Strengthen bond among
employees.
In the current business scenario, no employee can survive if choosing to work in isolation. It
would be a great idea if both types of employee at Prestige are aware of their position and work as a
team. Ms. Thu should spend time [1] sitting with her subordinates, asking them to share their own
problems and finding answers together. Employees will understand more about their colleagues,
create peer connections for a harmonious working environment. [2] She can also organize outdoor
picnics as a chance for them to change the atmosphere, have fun together and be back to work with
full of energy. For that approaches, frequent communication will build the trust, fill the gap between
people; once they have shared the same viewpoint, it can be defined as a strong organizational
culture.
2. Improve the HR Management
The role of the HR Department is definitely strategic as it should be well executed to ensure
employee performance and also increase the balance of work and personal life. Organisational
behaviour theory indicates that suitable use of HR improves organisational effectiveness, and when
interceded by effective HRM, these employees have lower intention to leave and better job
satisfaction (Ling et al. 2018). Putting that theoretical strategy into this case, the lack of flexibility at
work and the sales difficulties have shown that Prestige's HRM is not yet effective, which comes from
both Ms. Thu - the store manager and the CEOs. To better understand this scenario, these are some
techniques that can be put into practice in this context:
a) Organize training programs
Although Prestige owners have hired the best people with solid experience in sales and
fashion, they still have to engage in training programs as it is an essential part of HR process. The
engagement of employees in training is the ultimate method to enrich personal skills and
capabilities (Przewozna-Krzeminska, 2017). Prestige’s employees, especially full-timers, show their
lack of flexibility in service on days when customers are scarce. To bring the best shopping
experience to customers, training sessions on customer service should be conducted to build up
professionalism, retain the potentials and promote the shopping experience.
b) Adjust the threshold of commission
All of the mentioned problems above stem from the sales pressure of the employees to make
a comfortable living. 71.500.000 VND of sales in a month in order to get 5 million VND as 7%
commission maybe quite hard for underperforming workers to reach as the Covid-19 pandemic is
affecting the consumption market, the number of visitors to the shops was not as frequent as in
previous years. A practical solution for this financial problem is that the CEO managers [1] reduces
the threshold of 7% commission, which means commission is granted if the full-timers outreach 4
 RMIT University Vietnam
million VND threshold per month, for instance. For the part-timers, it is suggested to have the same
commission threshold just like full-timers: [2] increase the rate to 1-1.5% and [3] exceed 2 million
VND threshold to receive the extra salary. This will partly relieve the stress for both types of staff
when they all have fair bonuses but still motivate the staff to work harder and therefore, they can
earn for their living more easily.

IV. CONCLUSION
To conclude, the problems Prestige is facing also parallel in almost every company. But
through these difficulties, the managers can recognize the strengths and weaknesses of their
company. Here, the outstanding issues of HRM as well as the cultural environment of the company
are still fragile, so if there are reasonable directions, the company can improve the condition and
maintain sustainability.

V. REFERENCES
Bachruddin, SL, Chita, A & Arif, PP 2019, 'Examining Employee’s Compensation Satisfaction and Work
Stress in A Retail Company and Its Effect to Increase Employee Job Satisfaction', International Journal
of Human Resource Studies, May, vol. 9, no. 2, pp. 239-265, viewed 20 December 2020,
ResearchGate database.

Bryan, D 2018, ‘Staff Attrition vs. Staff Turnover: What’s the Difference?’, blog, viewed 17 December
2020, jobZology database, <https://jobzology.com/staff-attrition-vs-staff-turnover-whats-the-
difference/>.

Expert Program Management 2018, 'Legitimate Power in the Workplace', EPM, viewed 17 December
2020, <https://expertprogrammanagement.com/2018/05/legitimate-power/>.

Francis, AK n.d, 'How Lack of Customer Service Can Impact a Business', Chron, Hearst Newspapers,
LLC, <https://smallbusiness.chron.com/lack-customer-service-can-impact-business-2088.html>.

Jacob, W 2020, Phil's Stock World: Employees With Workplace Competition Are More Productive, blog
post, 14 July, viewed 19 December 2020,<https://www.proquest.com/blogs,-podcasts,-
websites/phils-stock-world-employees-with-workplace/docview/2423563530/se-2?
accountid=13552>

Ling, F, Yan, N, Chang, Y & Zhang, Z 2018, 'Human resource management practices to improve
project managers’ job satisfaction', Engineering, Construction, and Architectural Management, June,
vol. 25, no. 5, pp. 654-669, viewed 20 December 2020, ProQuest database.

Michael, A 2017, Armstrong's handbook of human resource management practice, 14th edn, Kogan
Page Limited, ProQuest Ebook Central.
 RMIT University Vietnam

Przewozna-Krzeminska, A 2017, 'Remuneration and trainings as HR audit components increasing the

employee motivation and commitment', Management, organizations and society, Agroinform,
Budapest, pp. 105-110.

Society for Human Resource Management (SHRM) 2017, 'Understanding and Developing
Organizational Culture', SHRM, viewed 17 December
2020, <https://www.shrm.org/resourcesandtools/tools-and-
samples/toolkits/pages/understandinganddevelopingorganizationalculture.aspx>.

Stefan, S & Mats, A 2015, Changing Organizational Culture: Cultural change work in progress, 2nd
edn, Routledge, London.

Warrick, DD 2017, 'What leaders need to know about organizational culture', Business Horizons, May,
vol. 6, no. 3, pp. 395-404, viewed 20 December 2020, Science Direct database.

Yariv, I & Sibylle, H 2016, 'The Role of Co-Workers’ Solidarity as an Antecedent of Incivility and
Deviant Behavior in Organizations', Deviant Behavior, April, vol. 37, no. 8, pp. 861-876, viewed 17
December 2020, Taylor&Francris Online database.