EXECUTIVE SUMMARY

The case study Iggys Bread of the World', talks about a couple who incorporated their love
and passion for baking into a business. Igor and Ludmilla created a warm and productive
culture for employees and influenced them to have positive and optimistic attitude at work.
The popularity of their bread reached skies and the huge demand soon became difficult to
handle. McRae was hired to handle the business aspect of bakery who in turn developed a
new management team affecting the work culture adversely. Now with McRae demanding
huge compensation, prerogative lies with Igor wherein he needs to decide whether to
retain him by accepting his proposal or to let him go keeping the organizations work
culture in mind. It is recommended that considering the vision of company, Igor should ask
McRae to leave the firm and entrust the responsibility of firm to Nikole.

TABLE OF CONTENTS
Situation Analysis ................................................................................................................................................. 1
Problem Statement ............................................................................................................................................... 2
Options ...................................................................................................................................................................... 2
Criteria for Evaluation......................................................................................................................................... 2
Evaluation of Options .......................................................................................................................................... 2
Recommendation .................................................................................................................................................. 4
Action Plan ............................................................................................................................................................... 4
Contingency Plan................................................................................................................................................... 4

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SITUATION ANALYSIS
Igor Ivanovic and his wife Ludmilla decided to start a bakery for a living and thus shaping
their dreams and passion. Initially they started with Pain the Avignon bakery along with
two other partners, but due to rift between the Igor and partners regarding the use of
organic foods, Ivanovics decided to sell their share of business and scout a new venue for
opening a bakery. And thus after discovering a potential market they set up Iggys Bread of
the World in Boston with a threefold objective; firstly to provide superior quality bread,
secondly to involve employees in the process and making it healthy and fun business, and
thirdly to create long-lasting relationship with customers.
The couple put in all their efforts towards the growth and success of this bakery. They
brought foreign labour experts in baking, state of art oven and used high-quality organic
ingredients. Iggys became very popular with the employees due to their involvement in
every aspect of business and friendly atmosphere. Soon Iggy was supplying quality bread
to most esteemed accounts in Boston. The growing business and the family became difficult
to manage together and thus Ludmilla became less involved in the process. Nikola, Igors
younger brother started looking after the finances of the business. Even though they did
not advertise, the quality of their bread was talk-of-the-town and within a year their
business had grown to such an extent that they were unable to take on any new accounts.
With a fear of losing out on business opportunity, and thus to cope up with increasing
administrative burden they moved to Cambridge, took strategic decisions to buy seven new
delivery vans, increase kitchen by 15, and took loans for the first time. The overwhelming
situation compelled them to hire Matthew McRae as COO. McRae took the charge and
started assembling his own management team which steered the company away from the
original culture of community to a corporate culture leading to employee discontentment.
On Igors confrontation regarding some hiring decisions, McRae presented a vindictive
letter of resignation which he later retracted with demands of increase in his
compensation.

PROBLEM STATEMENT
What decision should Ivanovics take regarding the proposal put forth by McRae demanding
stunning compensation?
OPTIONS
1. Accept the proposal put forth by McRae
2. Reject the proposal and hire new management team
3. Reject the proposal and continue with existing organization structure
4. Negotiate and retain McRae Ask McRae to revise the proposal and arrive at a
mutual understanding after negotiating raise and bonus
5. Reject the proposal and let Nikola create a support team

CRITERIA FOR EVALUATION

1. Impact on Business operations
2. Impact on Iggys reputation
3. Impact on Work culture and employees

EVALUATION OF OPTIONS

Accept the proposal: A business needs experienced professionals to run smoothly

and efficiently. The strategic decisions for the expansion of company needed a mind
like McRae who also promised increasing the profit levels of the company. But
McRae persona did not match the employee friendly culture of Iggys. McRae is
demanding higher compensation for essentially lowering the morale and increasing
tension throughout the organization. And thus the proposal should not be accepted.

Reject the proposal and hire new management team: To find someone passionate
about the business and who will be successfully be able to absorb the work culture
of Iggys is a challenging task. Also whether the new management team will be able to
mix with the employee and fuel the growth of the organization is uncertain.

Reject the proposal and continue with existing organization structure: Igor
experience is in baking and training the employees to bake breads but he is not
experienced when it comes to managing the business. Initially also his wife was the
one who looked the operations and younger brother Nikola looked after finances. A
simple baker like Igor might not be able to retain the business profitable in the long
run.

Revise the proposal: McRae was hired taking into consideration his prior
experience, remarkable knowledge, strategic thinking and passion for the company.
Though he took many decisions without consulting to Igor but his objective was
Companys profitability. Finding someone who is dedicated and attached to business
like him is a rigorous task. Also compensation and bonus is prerequisite for
employee satisfaction. His demand is mammoth and thus his raise and bonus must
be discussed and a consensus should be reached on the same. But again his working
might not be in sync with other employee contentment.

Reject the proposal and let Nikola create a support team: Nikola was acting as
General Manager at Iggys. He was involved with the firm from the time it was
instated and was well aware of the working culture. He played an important role in
keeping the firm on the path of growth. Nikola is a credible individual and with
more support from other employees and few experience new hires, he will be able
to manage the business, and also take the company in the direction they envisioned.
He has the experience to find the right people in financial, logistical and strategic
roles who can provide expert opinions while maintaining vision of the company.

Criteria

Business impact
Companys
reputation
Work Culture and
Employees

Accept the
Reject and
proposal hire and new
management
team
Maybe

X
Maybe
X

Maybe

Options
Reject and
continue
with existing
process
X

Negotiate
and retain

Reject and let

Nikola create
support team

RECOMMENDATION
I recommend that Igor should let go McRae and entrust the responsibility of firm to Nikola
with his decision to hire professionals who could support him throughout the process of
companys growth.

ACTION PLAN
The following steps should be taken by Igor:

Reject McRae proposal of higher compensation and ask him to resign again.
Ask Nikola to take on higher responsibility while keeping the work culture intact as
it was before McRae was hired
Along with Ludmilla and Nikola conduct interview to hire professionals and
consultants who will help sustain the profitability and assist in business expansion
plans.

CONTINGENCY PLAN
If Nikola feels that he cannot take the additional responsibility due to the burden of his
already existing work, Ivanovics can go ahead to create a support team by hiring new
employees as well as including internal employees that could guide the decisions on
financing, operations and expansion plans. Ivanovics must continue to instill the unique
culture they created in order to meet the vision and objective of the firm.