[b]Breakdown at Factory Direct[/b]



Sandra has been the General Manager of Factory Direct, a computer and electronics store, in Toronto for 5 years. For the most part her experience at the retail store had been a good one. She had a keen interest in business during high school and pursued Business Studies at George Brown College. Her job at Factory Direct allowed her to apply a lot of that knowledge and allowed her to use her exceptional people skills to manage the staff of 32.



During Sandra's time as manager, sales at her retail location had increased by 13%. Much of this was due to her excellent sales staff who were able to appropriately help customers without becoming pushy. Merchandise sales accounted for over 80% of the store's revenue so Sandra was very happy that she had such a trustworthy sales force.

The remaining 20% of Factory Direct's revenue came from service and warranties. Sandra has a technical support team of 10 people that install computer hardware, fix problems, and test new products for customers. Again, the service technicians are very trustworthy and have consistently ranked amongst the best team for service in any of Factory Direct's Ontario stores.



About 6 months ago Sandra was approached by Jim Kempston, owner of the store that she manages.



"Sandra, you are doing an excellent job here at my store. Sales are good, employee morale seems positive, and customers are happy." Jim continued, "There is one area that we do need to address though, and that's our payroll cost. Factory Direct has received a mandate from head office that we need to cut back this expense by about 10% per store in order to meet our profit targets for the year. Sandra, that means you need to let 3 of our staff members go."



Sandra was not pleased with Jim's instruction but understood. The following week she made the announcement that 2 salespeople and 1 technician would be let go at the end of the month. She apologized but reinforced that it was out of her control.



Almost instantly a shift in the workplace happened. It was as if two separate rival teams were formed - sales vs. technicians. Sandra first noticed it in the staff room. Employees who used to be friendly now hardly spoke to each other and there was a tension that could be felt as soon as you entered the room.



Furthermore, Sandra overheard two of her assistant managers, one sales and the other a technical support manager, arguing about which department was busier. Both managers blamed the other that the work wasn't getting finished and that there weren't enough employees to meet the customers' needs. The argument ended in a yelling match before both managers stormed off.



The last straw happened on a busy Saturday afternoon. Sandra was approached by a furious customer who asked if she was in charge.



The customer fumed, "Last week I spent $1800 on a new laptop here that was supposed to come with this list of software items (he showed her the list). When I got home I found out that none of it is on the computer so I brought it back to the salesperson who sold it to me. She apologized and sent me to your technical support so that they could install it, but they said they are too busy and it's the job of the salesperson to make sure all software is accounted for!"



He continued, "So I went back to your sales employee but she had a lineup of about 10 customers waiting for help. She assured me that it wasn't her problem and that I need to go back to tech! I just want what I paid for!"



[b]Task[/b]

Use the Case Study Method to solve this problem.