Radio Shack Report

Executive Summary

RadioShack Corporation is a popular electronic store within the United States of America. Within this report an assessment of RadioShack Corporation performance in the years 2004 to 2006 will be provided.

This assessment looks on:

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• Changes in Chief Executive Officer (CEO)
• The results of the changes in the CEO
• The financial performance of RadioShack in the specified period
•  Managerial problems facing RadioShack in the specified period. From this report we hope to give a concise representation of what happened in RadioShack in the years2004-2006.

As a group of consultants we aim to identify problems facing the company. Along with this we will provide solutions and recommendations to these problems based on our assessment. Introduction: Radio Shack is a consumer electronics goods and services retailer that operates about 4400 stores across the United States, Puerto Rico and the U. S. Virgin Islands. Additionally, the company also operates about 800 non-branded kiosks (small booths) from which wireless handsets and accessories are sold. The firm’s headquarters is located in Fort Worth, Texas and as of 2006, there were approximately 40000 workers employed to the company.

The case presented to the group highlights the problems faced by Radio Shack which started in the year 2004. The instability in the position of CEO and executive management of the firm, financial troubles, disgruntled employees and poor communication skills have been identified as the main problems which sought to wreak havoc throughout the firm. As consultants hired by the Radio Shack Company, our main objective would be to state, with clear reasoning, the core problems affecting the company, as well their appropriate solutions.

In addition we would aim to devise suitable plans which would aid the company in moving forward. Along with this we will present recommendations which would foster better development and growth within the firm for the future. Background: Within the years 2004-2006, RadioShack had undergone instability in upper management and poor financial performance. One reason for such instability is caused by the frequent changes in CEO’s. Over the period, three persons had the role as CEO. The first, Leonard Roberts left the position to join the board of members at RadioShack.

The second, David Edmondson left due to his fake qualifications. The third was, Julian Day, who was employed by the Board of Members and the Executives to turn the company around (University of Nortedame, 2007). It is not beneficial to a company to have a critical position such as the CEO changed so frequently. Each person set different goals and have different ways of achieving them. Therefore, whenever there is a change in CEO the goals of the business change too. Hence, the company is affected as it has to stop and change its path whenever a new CEO takes over.

This ultimately affects the immediate performance of the business. With the frequent change in CEO’s employees may become lazy in completing the task they were given. They may also become confused in regards to what to do. Others may even stop doing the task once they are informed that the CEO will be changed. Thus, this reduces the overall productivity of workers. Consumers too will be affected as their needs and wants are not being satisfied efficiently due to changes in the company. As a result, the company is now seen as inefficient as they fail to satisfy customer needs.

The company is further affected as employees will have to be paid although the company is not earning. Poor communication skill is another issue which is a result from instability in upper management. Workers were unaware of the decisions to cut staff until after a press release. It was the managers at RadioShack that informed their team of the reduction and the medium that will be used (Joyce, 2006). As a result, employees questioned the company policies and began losing confidence in them.

Also many felt disrespected based on the medium used inform them of job cuts (Joyce, 2006). Discussion: Between the years 2004 – 2006, Radio Shack had a fully grown problem tree. This conclusion was made after carefully analyzing, deliberating and discussing the case at hand within the group. A number of issues were defined and can be characterized in the following groups: Leaves Inability to Motivate Employees Financial Instability Branches Poor Internal Control Poor Internal communication Bad Business Ethics Root Dysfunctional / Incompetent Top Management

These issues will be discussed in this section in the order in which they are defined. Leaves i. Financial Instability * RadioShack Corporation in comparison to its competitors is underperforming (University of Nortedame, 2007). Their net income is significantly low and lags behind competitors. * RadioShack saw stock prices closing at relatively low trading prices. ii. Inability to Motivate Employees Radio Shack lost the confidence of its workforce following a sudden press release made by Day. He announced the company’s action plan in moving forward to recovery.

This action plan included firing hundreds of employees as a means to decrease expenses and improve its long-term competitive position in the market place (Poole, 2007). Branches iii. Poor Internal Control Radio Shack had undergone numerous executive changes. The most significant being the changes of CEO’s in a two year period. The one which stands out was that of David Edmonson who left the position after admitting he lied on his resume about two academic degrees which he did not have (University of Nortedame, 2007).

This is a major issue as measures should have been in place to check all persons qualifications before hiring. 4. Poor Internal Communication Management had failed to inform employees that jobs were to be cut. Employees were informed internally after a sudden press release given by Julian Day in 2006. To not inform your employees first of such job cut may lead to many feeling separate from the company (Poole, 2007). Also, this further affects the company performance as employees are caught up wondering if they will be fired rather than focusing on getting the job done. 5.

Bad Business Ethics Most would agree that no matter the means of firing, the notion remains the same. It is best to fire someone face to face. Communication is a two way process and several instances RadioShack engaged in a one way communication process based on the approach to fire employees (Gaertner-Johnston, 2006) . Clearly Radio Shack ignored this and as a result they had disgruntled employees. The way in which the letter was written also shows poor business ethics. In Business School it is taught that when delivering bad news, the bad news should not be delivered first.

RadioShack ignored this and gave the employees a concise email informing them that they were no longer needed. Root 6. Dysfunctional / Incompetent Top Management The core cause of all of Radio Shack’s problems was the inability of their top management team to effectively do their job. Had they been overseeing more efficiently by the Board of Members and executives these branches and leaves could have been avoided. Radio Shack had left the corporation solely in the hands of Julian Day. As a newly appointed executive, he was left totally in charge of the company’s turnaround plan.

The board of directors and executives confidence may have been justified based on Julian day previous work. Nonetheless, they had failed to exercise their authority in incorporating the company values, claims and policies with Julian Day’s creative genius and business operating skills. Conclusion: In evaluating this case and highlighting the many issues, it is fair to say that RadioShack Corporation is not in a very secure financial position. This statement is made on the basis that they suffered from problems which include: •Inability to motivate employees Financial instability

• Poor internal control
• Poor internal communication
• Bad business ethics
• Dysfunctional/ incompetent top management

Improvements are therefore needed in these areas of the company if it is to survive and grow. In order to do this, RadioShack Corporation must first find solutions to their core problems. The core problems were identified to be poor internal communication, bad business ethics and dysfunctional/ incompetent top management. These problems are the root causes which all the other problems stemmed from.

This case analysis basically provided justified issues that were evaluated and discussed as it relates to RadioShack Corporation. Recommendations: In order to alleviate some of these problems faced by RadioShack Corporation, the group of consultants generated some recommendations. Based on the findings in this case, it is recommended that: In trying to rebuild a company that is in great financial depression, the manager should review all aspects of the business and work along with the current staff, rather than deciding to cut staff as the first objective.

The management team at RadioShack Corporation should focus on their internal performance first in order to increase profitability and revive the finances of the business. Another recommendation is that the board members should exercise their authority by ensuring that Julian Day ideas were ethical and stuck to the policies of the company when making major decisions.

Bibliography

1. University of Nortedame. (2007). RadioShack Corporation: You’ve Got Mail. Mondoza College of Business. Joyce, A. (2007).
2. Fired Via E-Mail And Other Tales Of Poor Exits. Retrieved November 8, 2012, from http://www. washingtonpost. com/wp-dyn/content/article/2006/09/09/AR2006090900103. html
3. Poole, L. (2007). RadioShack lays off employees via e-mail. Retrieved November 8, 2012, from http://usatoday30. usatoday. com/tech/news/2006-08-30-radioshack-email-layoffs_x. htm
4. Gaertner-Johnston, L. (2006). Fired by Email. Retrieved November 9th, from http://www. businesswritingblog. com/business_writing/2006/09/fired_by_email. ht

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