Technical College Chapter 15: Turnaround Decision Making at Liz Collarbone Liz Collarbone was once the largest women’s brand on the market. It took less than a decade from the brand being founded to make it into the Fortune 500, where it continued to set all kinds of firsts. Even throughout the company’s rough times, it always found a way to reinvent itself Oust Style).
By 2005, the company had grown to support 36 different nationwide brands with sales reaching 5 billion. Unfortunately, here was not much of a profit because operating costs were not decreasing, but instead increasing due to the complexity of managing so many different brands. In 2006, the company appointed 43 year-old William L. Macomb as CEO, to turn the company around. Macomb decided that the best option was to downsize the company in order to be managed more efficiently.
He felt that the managers were spread too thin and suffered from “information overload. ” Subsequently, the company was rearranged from five apparel divisions down to two divisions in order to eliminate the duplication of work. Since then, Macomb’s five-year-plus tenure has seen the stock collapse, and five consecutive years of annual net loss totaling more than $2 billion dollars. Liz Collarbone, Inc. Was forced to sell off many of its brands, Including the Liz Collarbone label Oust Style). 1.
Using information in the chapter, “hat kinds of decision-making errors and biases do you think may have led its managers to grow the size of the company so much and to add so many brands that the company became too complex to control? I think the managers believed they Newer making well-informed decisions at the time. Perhaps, if they had used the classic model of decision making that may have had a better idea of the consequences of those decisions. However, the classic model is unrealistic because no one knows all of the information needed or all of the alternatives to choose from. . What main nonprogrammer decisions did Macomb make to turn around the company’s performance? How did they simplify and improve the decision-making process? Macomb had not experienced the problems the company faced before and searched for more information in order to make the right decision. Some of his nonprogrammer decision were rearranging the brands and selling or closing the brands. I don’t think that any of his decisions simplified the company’s situation at all. Hind that the company was too far gone and that the decision-making process was ‘ere poor because none of the problems were solved. I think the is because the company was already in a crisis situation and this caused a lot of personal preference and preferred assumptions backed many of the decisions that were made. 3. Given that Liz Collarbone’s main problems were not solved, what kinds of error and biases do you think might have led Macomb to not shrink the company enough? Search the internet to see how well the company is currently performing.
I think that Macomb did not have the credentials to turn the company around and made many decision based off wild guesses rather than making informed decisions. The company is still alive but only because they have partnered up with other major retailers. In October 2011, the company completed the sale of its Dana Bushman brand to Kohl’s. In November 2011, the Company announced that it has completed he transaction to sell domestic and international trademark rights of its Liz Collarbone family of brands and domestic trademark rights of its Monet brand to J Penny (Forbes).