Iggys Bread of the World

Executive Summary
The Ivanovics have to consider how their business would function in the future.
Their options are limited to accept McRaes proposal and let him continue in
hisposition as is, to reject his proposal while hiring a replacement team and
finally, to reject his proposal while scaling down and regaining control of their
business. They have to consider the importance of expansion and growth of
Iggys, while also taking into account product quality, brand reputation, the
satisfaction of their employees. Rejecting McRaes proposal, while hiring a
replacement management team with Nikola at the helm, seems the best way to
go.
Situational Analysis
Igor and Ludmilla were passionate people and Iggys breads was a culmination of
this passion. They learnt the trade at Pain dAvignon which they later left
because they werent willing to compromise on quality of ingredient in the
pursuit of profit. Their focus was the wellbeing of their work, employees and
customers. They also refused to hurt their friends at Pain dAvignon by operating
in the same circles. This was indicative of their positive intent and their belief
that there is enough space for all to function and grow as a business. In their
early days, Nikola, an economics major, helped them with running the business.
Ludmilla instituted a Clean & Happy Hands rule which wasnt simply a rule on
cleanliness but also a rule to ensure that no worker worked unhappily. It
represented her aim to build a utopian workplace. They further motivated
employees and ensured that they had a holistic understanding of the business.
Thus the employees had a personal connect with the business.
As the business grew, it became exceedingly difficult for Iggys to serve all its
customers. To maintain their value system, they decided to grow the company.
Matthew McRae, who was hired as COO without any formal hiring process, wasnt
demarcated his role and responsibilities clearly. He began to build his own
management team with people he knew personally. One of the new hires was
Diane Coleman who the owners did not believe was up to the job. The approach
of this management team was markedly different from the prevailing one at
Iggys and this led to friction between the management and the employees. The
owners, who had distanced themselves from the operations of the company,
started feeling the differences too. This led to problems between them and
McRae.
While they were working things out with McRae, McRae and Diane hired another
manager behind their backs which was the straw that broke the camels back. In
final negotiations McRae asked for a higher compensation. This was a clear
display of the clash of thought processes between the Ivanovics and McRae. He
was driven by monetary benefits and did not have any interest in aligning

himself with the culture of the company or the well-being of the employees both
of which were close to the Ivanovics heart.
Problem Statement:
What should be Ivanovics future course of action for their business?

Options:

Accept McRaes proposal and let him continue to run their business as is.
Reject McRaes proposal and find a replacement management team.
Reject McRaes proposal, scale down the business and regain control of
the business.

Criteria for Evaluation:

1.
2.
3.
4.

Expansion and growth for the business

Product Quality & Brand Reputation
Organizational Culture
Employee Satisfaction

Evaluation of Options
1. Accept McRaes proposal and let him continue to run their business as is.
Since McRae had previous experience running a successful company, he
brought in a lot of good experience into Iggys. His ideology being more
growth oriented was well in sync with the business wanting to expand and
grow itself. However, with the team that he brought on - it became evident
that the product quality, linked with employee satisfaction, had started
suffering. There was a distinct difference in the way the new management
team and the existing employee base approached the business, which was
causing a dilution of the existing company culture.
2. Reject McRaes proposal and find a replacement management team.
Rejecting McRaes proposal would mean removing him and his team from the
managerial positions. However, to continue expansion and growth of Iggys
Bread of the World bring aboard a replacement management team was
necessary. This time, the Ivanovics could take in account the professional
credentials and experience of the candidates while hiring them in their
positions. Their approach to business and cultural fit should also be of the
highest importance to them.
3. Reject McRaes proposal, scale down the business and regain control of
the business.
Since Iggys was operating very well before they decided to expand their
business, it would make sense to roll back and continue to operate within

select circles of customers. Since their primary aim wasnt toward monetary
growth, it makes sense that they return to their original goal of providing
quality bread to their customers and a happy work place to their employees.
Recommendation
Reject McRaes proposal and find a replacement management team.

Action Plan
The first step would include the Ivanovics asking McRae to step down from
his position along with his team, since their approach to the business wasnt
aligned with the core value of Iggys. They should then an institute a formal
hiring process to select the right candidates for these managerial positions
while ensuring a professional experience and cultural fit with the company.
Meanwhile, they should elevate Nikola to the head of this management team
since he was involved with the company since its inception and understands
its operation the best.
Contingency Plan
In case McRae refuses to step down, the owners should wield their power and
ask him to replace Diana Coleman with Nikola. They should look towards
enhancing Nikolas powers within the management team thus keeping in
check McRaes influence in the organisation.