Arabia Lights case study on strategic management

Answer should be at least 2 pages. Case is attached. Assume that you are the MD of Arabia Lights. As the leader of the organization, explain how you will handle the entire situation to make the Arabia Lights once again successful with all its major problems resolved.Please note that you should not respond to the case as to what you would have done on each instance if you were the MD at that time. Whatever was supposed to happen has already happened in the company. Now, in the given scenario, you should explain in detail all the things that you will do as the leader of the organization to resolve the issues and get the business back to good standing.
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Arabia Lights – A Comprehensive Case
Written by: Dr. George Thomas, Prince Sultan University
Arabia Lights is a family owned enterprise producing and selling electric bulbs and
tubes. The company is a small organization, which has three departments Production, Finance & Accounting, and Marketing. Although, the company is
producing only bulbs and tubes at the moment, it realizes that the future of lighting
industry is the compact fluorescent lamps (CFLs). Adding CFLs to the product line is
under its consideration; otherwise it may lose out eventually to big players in the
market.
Currently, the owner, designated himself as the Managing Director (MD), heads the
company. The company has plans to convert itself into a Public Ltd. Corporation.
With this idea in mind, the MD has instructed Mr. Abdullah to prepare a vision,
mission and a strategic plan for the company coordinating with other departments.
Practically, the MD views Mr. Abdullah to be the CEO of the company, once its
expansion plan works out the way it is envisaged, when he (the MD) will be
designated as the Chairman. The MD gave such a hint to Mr. Abdullah during a
couple of their interactions.
Currently, Mr. Abdullah is the Marketing Manager of Arabia Lights, who joined the
company only three years back. He is known in the company as an efficient manger,
who is very strict with his subordinates. He was a graduate in marketing from a
reputed university in the United States, and had 12 years’ experience mainly in sales
in two other companies. Having joined Arabia Lights, within a short span of time, he
could achieve excellent sales results. Some of his efforts in sales planning and
customer segmentation produced commendable results. An advertisement campaign
that he launched in the first year of his service was also well received by the
customers shooting up the customer enquiries on the company’s products
substantially and the sales moderately.
The Marketing Department consists of three sub-units namely Sales Division,
Marketing Research Center, and Promotion Unit. In its Sales Division, five Sales
Executives are working who are reporting directly to the Marketing Manager. The
Marketing Research Center is just a nominal unit, which has only two employees,
who after graduating in Marketing worked with Neilson (a renowned Marketing
Research firm) for a few years before joining Arabia Lights. The only major function
that the unit does is to prepare area-wise sales reports in statistical and graphical
forms, which has become more or less a routine job. They feel that the Arabia Lights
does not utilize their experience and potential in a meaningful manner. They,
sometimes, shared an impression with different people in the company, including with
Mr. Abdullah and the MD that they had different ideas to boost up the sales.
However, since Mr. Abdullah himself had his own strong Sales and Marketing plans,
he paid only negligible attentions to such ideas.
Similarly, the promotion unit as well has only two employees. They interact with a
leading advertising company, whose service is contracted by Arabia Lights for all its
promotional activities. The interactions are at a minimal and routine level. They
mostly execute the orders of Mr. Abdullah – one of them once said (with an element
of frustration), “We are just order-takers in Arabia Lights and not part of a creative
promotional team.” In fact, the MD realizes that Mr. Abdullah does not pay much
attention to any other unit than the Sales Division as if he (Mr. Abdullah) did not have
much expectation from the other two units, hence did not put much effort to test their
abilities either.
The Production Department of Arabia Lights is headed by Ted Robbins, who was an
American with an engineering background and five years’ supervisory experience in
an American company producing bulbs and tubes. In comparison with other heads of
departments in Arabia Lights, he enjoys higher pay and benefits. It appeared that the
other two heads of departments have unpleasant feeling about such a special treatment
given to Mr. Robbins, although they have not so directly and specifically mentioned
about it to the MD.
Whenever issues of coordination mattered, particularly Mr. Abdullah had a little
reservation to entertain the views of Mr. Robbins, and used to point out that the
knowledge of Middle-Eastern culture is important to be successful in business in this
region. The head of the Finance & Accounting department Ms. Maha used to agree
with such comments of Mr. Abdullah as if there was a little collusion between the two
against the other. Mr. Robbins always asserted that whatever products Arabia Lights
needs with any quality and quantity specifications would be provided by his
department, if it is given the required financial support. He normally adds,
“Marketing Department is the one who must say what products it needs, and Finance
department should get me the required fund to produce the products; then take it from
me that the products are ready for the market.”
What is special about Mr. Abdullah is that he strongly sticks with his plans; for
example: he does not allow any of the Sales Executives to alter the sales plans.
Abdullah, being a responsible manager, regularly visits each sales territory of the
company, gives the Executives strict directions, and keeps away from any social
engagement with them. Although he was very humane, social and lively person by
nature, he purposefully pretended to be very strict a boss to all his subordinates.
There was a very specific reason behind his pretension. The previous Marketing
Manager of the Company, Mr. Faris was allegedly fired by the company for being so
friendly with the Sales Executives, and thus failing to control them effectively. Mr.
Faris was a family man, who could only rarely visit the different sales territories or
coordinate the sales efforts properly. Hence, he behaved in a manner as if he strongly
believed in the Sales Executives and didn’t appreciate the idea of strictly controlling
them. He often said, “Controlling is a game of the past.” Most of the Sales
Executives really loved him that upon his resignation, some of them visited him at his
residence and said, “The only man in the company with a human heart is leaving it; it
is really sad”. However, the company was so unhappy with him because he couldn’t
achieve even a satisfactory marketing results despite repeated warnings. The MD did
not explain either to the Sales Executives or to Mr. Abdullah what culminated in the
resignation of Mr. Faris.
As was stated earlier, the MD looked at Mr. Abdullah as the future head of the
company. He wanted Mr. Abdullah to play a total leadership role than just being the
Marketing Manager. Therefore, he sometimes reminded Mr. Abdullah to coordinate
all the departments and required staff to prepare a vision, mission and strategic plan
for the company. Mr. Abdullah made some individual efforts and homework towards
the preparation of the strategic plan, and had even a meeting with the other heads of
departments almost a year back. However, only little progress has been achieved thus
far on this front. The MD made a casual remark about this failure in a recent meeting
with Mr. Abdullah. Then, Mr. Abdullah smiled and said, “I was really busy with
several things, hope you understand it” and the MD said, “Okay….,” bit
unapprovingly.
The major emphasis of Mr. Abdullah was on improving the sales. Under him, all the
Executives improved their performance initially, though only one of them could
achieve the monthly sales target regularly. Three other executives achieved the
targets off and on. He came down so heavily on all those who failed to achieve the
target but that was done very secretly on a one to one basis and never in public.
However, he often avoided appreciating the achievers because he feared that it might
result in losing control over them, and might make the Executives feel complacent
about their performance. Instead, he kept on informing his appreciation about the
achievers to the MD through the confidential performance appraisal reports.
The Executive who regularly achieved the target was Mr. Yasser. Mr. Abdullah,
many a times, increased his target but Yasser never failed to achieve it. Mr. Abdullah
was very happy and proud of Mr. Yasser though he did not reveal it at all to Mr.
Yasser. Once Mr. Abdullah gave him a special assignment to study about two new
territories and then to submit a report within a month. The secret purpose of this
assignment was to understand Yasser’s capabilities to be recommended for a
promotion as the Head of the Sales Division. Although Mr. Yasser was not aware of
this secret purpose, he produced and submitted an excellent report. While submitting
it, Mr. Yasser said, “This is my heart and brain, and in this you can see the pain of my
children losing their father’s care”. Mr. Abdullah did not respond in any way to this
comment or about the report to Mr. Yasser. However, Mr. Abdullah studied the
report and found it so exciting that he said to himself, “Yes, it is his heart and brain”.
Without any further delay, he recommended to the MD to promote Mr. Yasser as the
Head of the Sales Division, a position that did not exist before. Mr. Abdullah did not
inform Mr. Yasser about this because he wanted the letter of promotion to reach him
(Mr. Yasser) as a surprise.
After a few weeks, in order to prepare a new sales plan, Mr. Abdullah asked Mr.
Yasser to collect some more details about the new areas that he had studied. Mr.
Yasser responded quite strangely in an angry and heavy tone, “Read the report
carefully, whatever information you require, you would see in that”. He added
further, “What would you like me to do?……to do business in my area or to study
about another area…..; it is humanly impossible for one to do both!” He was really
furious. Mr. Abdullah was so embarrassed that he categorically said, “I am the
manager, I know what is right and wrong; if you have to work under me, do it or
forget about your job ……..”. Mr. Yasser said “Arabia Lights is not the only
company on earth.” Now that everyone in Arabia Lights is suspecting that either Mr.
Yasser or Mr. Abdullah will leave the company.
Different people in the company briefed the MD about the issues between Mr.
Abdullah and Mr. Yasser. However, what the MD is more worried about lately is the
dramatically falling sales level of the company. He understands that the reasons for
sales decline could be several like ineffective marketing strategy, poor promotional
efforts, inefficient sales team, etc. However, the single most important reason that he
could identify was a change in consumer behavior. People are increasingly moving
away from bulbs and tubes to CFLs, especially in response to the recent hike in
electricity tariffs. Arabia Lights has not yet introduced any CFL in the market! Even,
it has not acquired the technology to produce CFL…… In the meantime, an engineer
working in the leading rival company has secretly offered to Arabia Lights to steal
and sell to it the CFL production technology, if he is paid an illegal gratification of
high but affordable amount. Ted advised the MD, “Be practical” but the MD is yet to
take a decision.
Assume that you are the MD of Arabia Lights. As the leader of the organization,
explain how you will handle the entire situation to make the Arabia Lights once
again successful with all its major problems resolved.
Please note that you should not respond to the case as to what you would have
done on each instance if you were the MD at that time. Whatever was supposed
to happen has already happened in the company. Now, in the given scenario,
you should explain in detail all the things that you will do as the leader of the
organization to resolve the issues and get the business back to good standing.

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