Case Study Jacobs Decline Commerce Essay


The case study is about Karen Jacobs who is CEO of the ice-cream company and part of her management routine, she makes unannounced visits to her stores where she quickly assesses the effectiveness of the operations and quizzes the manager about their sales figures and store expenditures. Some team members get frustrated from her management style and says "If she's not satisfied with the way the stores are being run, she simply rolls up her sleeves and does the job herself" . Karen is business icon lady and writes many articles on business. She is also an aspiration for many young women business entrepreneurs and carries out business operations to help young women enter the cut-throat world of business. By 1995, 10 years after she started the company, is able to achieve to open 400 outlets in 5 countries. Later on company has to sale 80 outlets due to debt on company Karen did not realised this actually bank made her realise that her style of managing the business was leading to low efficiencies of the business outlet .At this stage she thinks she need market specialist to help her to capture online market . Although Karen was willing to bring new management into the business at the request of the bank, she found it hard to 'let go' of the business she grew from nothing. Over the next few months there were many occasions where Karen came into conflict with many of the new managers over the speed and direction of the new business. In meeting held in 2010 bank forced Karen to resign from the position of CEO.

Tasks to perform

What type of power was evident in this case and how was it used?

Would you consider Karen to be a leader and if so, what was the prevalent style?

Using the idea in your own module, how would you describe Karen`s use power?

Power and Authority

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Power is a measurement of entity through which it can influence its environment or behaviour of bodies which are related to that particular environment .One thing very sure about power is that this term power plays very vital role in any environment ,whether it is used in political ,sports, human service, law and order or corporate sector. It would not be wrong if I say that power is most important component of any system. In business sector Power and Authority are related to each other, important of authority is same as power. Authority gives a legitimate right to an individual, group or department to exercise its power. For example Manager has the authority to assign work, hire employee(s) etc.

Many researchers and theorist have their own views and theorise about the term "Power" in corporate sector some of these are as follows,

Power: - The concept of power is useful for understanding how people are able to influence each other in organisation (Mintzberg, 1983 :)

Power involves the capacity for one party (agent) to influence another party (target).

Types of Power

Efforts to understand power usually involves distinctions among different types of power. (French and Raven 1959) develop taxonomy to classify different types of powers according to their sources as,

Reward power:

This is the type of power in which manager is empowered to give the benefits to subordinates or co workers to derive the work or assignment given to them. There are many tactics or methods are used in reward management, these rewards might me financial and sometimes these are appreciations sometimes these rewards are given in kind e.g. gifts or short leave from work and day off on achievement of some assignment.

Coercive power.

This is the type of power in which the holder of power deprive the employees or workers from the rewards or keep the subordinates in the mental state of deprivation from the rewards .the only purpose for the use of this power is to keep the people obedient by using undue power.

Legitimate power:

This is the most desirable type of power to be used in the business originations. Legitimate power may be referred to the right authorities with the right people or we may say that the person holding some position in the organisation deserve those powers by the virtue of his position in the organization.

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This is most important in the organisation if the people deserves and eligible for some post having the powers to exercise for the completion of some task or for the management of some department.

The exercise of legitimate powers is desirable in any organisation.

Expert power:

Expert power refers to the individual skills or abilities .these abilities might be due to some specific qualifications or some technical training related to some particular jobs or specific fields. e.g. engineers ,accountants are the people who have the expert power in their filed. To perform the engineering jobs some needs the specific qualifications and training same goes for the other expert fields.

Referent power:

Referent power generally refers to the some abilities of the celebrity or icon which is widely admired or accepted in the society. The actions of these people are adopted by the general public as everybody wants to follow these icons. These vary in different cultures. E.g. soccer players might by the icons to be followed in the countries in which this sport is widely played and liked, however in cricket playing nations the cricket player might be accepted as celebrity or icon.

Organisational Culture

Organisational culture is a combination and summary of what is done within an organisation how it is done .Organisational culture is a mixture of value, relationship ,rules which are taken together to explain the unique "feel" of an organisation, rather than written down .Organisation culture is based on

Work that is carried out

The sources and power used by individual and groups

Nature and strength of the leadership of the organisation.

Proposal and plans

A number of writers have analyse organisational culture but I consider two (Handy and Peter)

Handy`s Four culture types are

Power culture

Role Culture

Person Culture

Task culture

Power culture:-

According to handy power culture is suitable for the middle sized and aggressive organisations. These organisations are change responsive and growing people are governed by the power culture. However there are many disadvantages associated tot his style of culture as well as people may feel depressed as their performance is gauged by the central authority who is acting as the authority. The whole scene depends upon this central authority if it is strong people will be satisfied and organisation will grow and if the central command or authority is weak than situation might be worse.

Role culture:-

Another style of structure on which organisations are based is the bureaucratic structure. In this style of structure organizations delegates the power among the different department s or different individuals. They are responsible for their roles in these organisations. In this structure the culture which regulates the origination is the role culture.

Task Culture :-

Some organisations are structured on the matrix basis. The structure of any organisations may be different due to nature of business or the goals of the organizations and there might be any other reasons as well.

In organisations where the skill an expertise is involved the organisations are divided in to the different matrix depending upon the skill set of the people to complete the different projects. In this type of organisation the task culture is dominant as everybody is concerned with the task or job assignment given to him in certain project.

Person Culture:-

One more type of organisation is based on the independence structure. These types of structures are dominant in the specific business types of consultancies, doctors and law firms. Accountancy firms. The individuals in the firms are experts of their field. The culture adopted by these types of firms is person culture as the individuals are responsible for their acts and have their own objectives.

Power and Culture used by Karen

In this case Karen use legitimate power and Power Culture to exercise her management skills. Instead of thinking that she is CEO and president of the company, Karen makes unannounced visits to stores and check the performance, Quizzes the mangers regarding sales and stores expenditure .As a CEO it is not her duty to visit the stores and figure out the performance, But she takes it as her part of her job and expect same from her every team member. Karen thinks that the legitimate power will help her a lot as she has the right to direct the managers and team members to comply what she demand .She also has demanding expectations for her stores managers regarding their adherence to company management skills.

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Karen knows that her company is strong and dynamic and can react quickly with external demand that's why she chooses power culture to support her company and she think with self believe she can handle the whole situation.

However in power culture some employees suffer dissatisfaction and they don't want extra pressure, they think there is no bright future ahead for them. We find same scenario here when some of her team members annoyed from her attitude and say`s if she is not satisfied with the way the stores being run, she simply roles her sleeves and start doing work with on style. It's all Karen achievements that the company is able to open 400 outlets in five countries. She devotes her day and night to so company at sky. As an iconic lady, Karen often being invited to TV programs to deliver her experience about business, she also wrote many articles, journals about the business .Due to her devoted and experience she is star for many new business ladies.

Karen believes if every manager feels the responsibility and at the end he has to answer ,the manager will work hard and also he will take work from his team ,That's why she thinks the legitimate power is best for such company and she had a better experience using it. Karen also expects a strong working environment in stores from her mangers; she expects that every member should know his job description. As she knows every employee is the strength of the company and if every employee does his job the company will reach to a level.



Definition: - Art of motivating a group of people to act towards achieving a common goal.

"It is a process by which one person influences the thoughts, attitudes, and behaviours of others. Leaders set a direction for the rest of us; they help us see what lies ahead; they help us visualize what we might achieve; they encourage us and inspire us. Without leadership a group of human beings quickly degenerates into argument and conflict, because we see things in different ways and lean toward different solutions. Leadership helps to point us in the same direction and harness our efforts joint". (D. QUINN MILLS 2005)

Importance of leadership

Importance of leadership in organisation is just like hart in body, if hart is not pumping the blood body is no longer alive, great leader helps to put their nation out of peril, etc. Quaid azam, Ghandi .Leader makes the organisation successful; Leader is the one who thinks for the future of the company, the absence of leadership is equally dramatic in its effects. Without the leader the organisation move slow sometimes loose path as well. Much of the organisation stress, decision making, lies on leader shoulders.

Importance of leadership in Organisation

Every company needs a good leader who focuses on company's goal by helping other (team members) do their work.

A good leader possess the following qualities

One who plan properly

Guide the team in right direction

Hire a right person for the right job

Assign duties to team members according to their job description and skills

Effectively controls the companies cost and increase the profit

Provides a healthy environment

Karen as a Leader

By reading the case study and focus on the Karen management schedule, she possesses all the qualities a good leader should have. As a CEO she completely knows the goals and objectives of company that's why company is able to earn 16 million dollar in 2004, as part of routine she makes unannounced visits to stores to understand the operation activity quizzes the mangers about sale figure as she believes that she can do anything to boost the company at good position. Karen knows there should be a proper working hour, manager should monitor the clock in out timing of employees, every team member should focus on the customer needs. Karen is very demanding lady she expect 100% effort from every one. She properly monitor the cost of every store as expenditure effects the sale profit, she even sometimes goes in store and name every employee we can judge from these words that it's not a duty of Karen but she does extra and tell the employee that look at me and work like me. Sometimes employees are unhappy due to her dominating style and say if she is not happy with our work she should do it by her own. Not only this she is also been invited many times as a guest on TV shows to discuss about the business and achievements, She is famous and well known business lady that's why she been invited on TV she explain her expertise and experience to let other follows her as she been a business icon for many lady`s as well. This medal also adds points as a good leader and good for the company`s point of view. Karen knows it's not easy to just open the stores internationally and profit starts, she first has to do many analysis like (PEST), she has to look the potential in that country for this company also there will be a language barrier as well, some countries not allow other companies to come in their countries so political factor is there as well, but she effectively tackle all the hurdles. Karen employee the people from that country where she plan to open the outlet ,As it would be edge for people and company as well, company has better chance to grow and also it is good for political point of view that people from that country get job and language barrier is also solved ,this job can only be done by good leader as its not simple job to do .Next is the huge pressure from the expansion of stores, as many stores were weighed down by expensive long-term leases which placed huge burden on profit margins. Karen also knows about the recession period which will drop down the sales and banks will ask about it but she knows that going to happen and this adds a lot in her experience. She felt there was an urgent need of new professional market research peoples who help her to capture the new market as debt burden growing up and she knows new online business will help company to capture more market, also its going to be ease for those customers who cannot come in stores and they have their premium food on their door step. New employment opportunity will arise and also contracts with well-known hotel taken place to deliver food to them. As a good leader she knows the external environment and her company has to remain up to date to fight with the competitors and also to achieve the high levels.

Types of Leader style

"Kurt Lewin" and colleagues identified different styles of leadership:




Autocratic Leaders

Authoritarian leaders, also known as autocratic leaders, provide clear expectations for what needs to be done, when it should be done, and how it should be done. There is clear division between these autocratic leader and other followers. There is no involvement of others in decision making as they take decision independently .It is very difficult to convert your leadership style from autocratic to democratic. This style develops a bossy mood in them and they think they are the best from others.

Democratic Leaders

Generally the most effective leadership style. Democratic leaders offer guidance to group members, but they also participate in the group and allow input from other group members. Other team members are less productive, but their contribution was of a high quality. Members feel engaged in the process and are more motivated and creative.

Delegative Leaders

Delegative leaders offer little or no guidance to group members and leave decision-making up to group members. While this style can be effective in situations where group members are highly qualified in an area of expertise, it often leads to poorly defined roles and a lack of motivation.

Style Adopts by Karen

It depends on organisation type, size of the organisation and also on leader which style is useful for them. In their past some leader adopts one style and continue using the same as they think this style is very useful for them, its depend on the people you are handling and some people do their work only when you imposed on them .like in this case Karen uses the "Autocratic" style to exercise her management. By reading the case study we notice that its part of her routine to do unannounced visits to stores to check the performance, quizzes the managers about sale and expenditure figure, demand full effort from every worker, As she is a CEO of the company and she knows she has the power to direct the employees she effectively use this style. Since she is very demanding lady and want her company at good position she knows target can only be achieved when everyone doing his work as every employee play important role in company ,her demanding style sometimes dissatisfy few employees but she knows no one is perfect in this world , she thinks that autocratic style is best ,that's why she reach at this position . She is the one who assign jobs to employees she thinks she knows better from all and manage the operational and management work by herself and engage every manager by giving targets and told them to exercise companies' management practice strictly, order the managers to monitor their team members working routine their clock in out timing and focus about the customer's needs .She is being many times invited as a TV guest to discuss about business .She also writes articles and journals as well .she thinks that all of her efforts and this autocratic style help her to achieve this position in company .Karen knows her effective leadership style and uses of power enable company to open many outlets globally. It's not her job to hire people but she manage to do it by own as she wants right person for right place. she even not listen to any advice of managers and she just want what she thinks as she knows if she is CEO then she is expert and deserve to be this position .Karen thinks this autocratic style is more effective as she achieve much, some expert says she is very demanding lady and she wants what she thinks and she can do anything to achieve that target.

Karen think as she has significant legal and personal responsibility for a project, it will comfort her and reduce her stress levels to know that she has control over her fate. She has her own example and she knows she can do this by own. Leader with such style believes more on him herself as other and they thinks they are the best and they can handle all situations by them .Karen wants everyone follow her and what she demand should be at the same way. Karen knows if she use this style she be the leader in everything and she has to make decision and it be better for her to act quickly and easy to make decision. These types of people take decision quickly and also experienced.


In my opinion Karen used the legitimate power as I have mentioned above. This is the power which comes by the position of the person. Karen is using this power because she is the CEO of the company .She is the leader who takes the decision in behave of all the people in the ice-cream company. But at a certain point her attitude is more dominating because of her position. Karen Jacob behaves as a big boss which sometimes not acceptable for everyone in the company.

"Beliefs are the way of building the company but strategy, management, policies that happens in the organization"

Stay connected with lower class:

In the case of Karen Jacob she should be connected with lower class of the company like the people working on lower positions, as they are the base of the company. There is a saying "if the base will be strong the building will not be demolish "the same situation sets with Karen Jacobs case.

People who are working in organization will be happy from management so they will work with enthusiasm and the result of which will be the success of the company.

Be humble with people in the company:

Karen Jacob should be humble and polite with people as it will be beneficial for her to be humble. Human nature needs appreciation so as being a leader she should appreciate her employees in public and should give a feedback on their achievement.

Be accountable of yourself. Everybody in the company is accountable accept CEO but for becoming a best accountable CEO you need to check yourself as well, ask people who are working with you suppliers, customer, employees and take the guides from a person from whom you think is eligible of giddiness.


When the leader say because of People Company have faced a failure that means company leader is failed to prove his/her strategies.

Main problem of leadership is arrogance, attitude, isolation and delusion which lead the leader into failures.

It is difficult for a leader to understand the problems of employees when their mind is on cloud nine.

That is way says, good leadership lies in the solution of people not with the solution of leader. A good leadership always tries to solve the problem of their followers not their own issues.

Effective Strategies

In this case study the finale of an ice cream company in which the CEO is the head of department Karen Jacob which is the main model of the environment .She is the Leader of the company but lack in the qualities of a perfect leader. Karen Jacob should follow the following strategies:

Use type of power(s) according to condition

One leadership style is enough and cannot be successful in every case

Be a visible role model.

Communicate ethical expectations.

Provide ethics training.

Visibly reward ethical acts and punish unethical ones.

Provide protective mechanism so employees can discuss ethical dilemmas and report unethical behaviour without fear.

As a leader, convey and illustrate a customer-focused vision and demonstrate through decision and actions the commitment to customer.


(Mintzberg, 1983 :) Leadership in organization (P 146 ) Gary Yukl

Management and organizational behaviour 4th addition (p 250) Laurie Mullins