Case Study: Iggy’s Bread of the World

Maryse Dushime

Husson University

April 17, 2021

Case Study Summary: Iggy’s Bread of the World

Igor Ivanovic, together with his wife, opened a bakery, Iggy’s Bread of the World, in 1994 to pursue his passion for baking. The bakery’s mission was to make bread of the highest quality and offer quality service to all customers. The couple was actively involved in the company’s operations, formulation of objectives, planning and employed the strategic planning process to ensure the smooth running of activities and success. Social events such as employee birthdays were often organized to improve employee engagement.

In a year, the business increased to the extent that they were functioning beyond their capacity and could not take on any new accounts. Igor and Ludmilla did not want to lose out on business by continually turning down orders from clients and were therefore faced with the option of expanding their business. As the first step towards expansion, Igor considered physical development using loans. With the physical capacity expanded and a new financial structure in place, the couple began looking for someone to assist them in managing the business’s administration and finances.

Mathew McRae was hired as a consultant and later as a COO to help run the company. However, Mathew changed the work culture, which created discontent among the employees, and hired a new management team without consulting Ivanovic. There was a conflict between the two parties, which led to Mathew’s resignation. Although Mathew revoked his resignation the following day, he proposed the increase of his compensation and inclusion in the share of profits. The Ivanovics are now faced with the dilemma of how to respond to Mathew’s demands while ensuring a positive future for Iggy’s.

King Arthur Flour is an American flour company that faced the same rapid expansion as Iggy’s. The company is currently the 14th oldest continuously operating manufacturer in America and has managed to sustain a reasonable average annual sales growth rate of about 10% in the past few years. Ely and her colleagues began receiving more orders and calls than they could handle. The statistics indicated a 600% increase in grocery-store sales, which happened overnight (Freedman, 2020). There was a sudden and urgent demand for the flour, where the company was inclined to face those high demands. As a respected brand both professional and home bakers for centuries, the company had built a strong relationship with the customers. It was, therefore, crucial for the company to make an effort to scale up production to maintain its position in the market. To handle the situation, a massive expansion of the company’s online sales was implemented (Freedman, 2020).

The Ivanovics were faced with the decision on the course of action to take regarding Mathew’s proposal for a significant raise in salary and bonus to secure the bakery’s future. The couple could accept Mathew’s proposal, reject his proposal and hire someone new or reject his bid and resume control of the firm. The bakery founders are passionate about their products, respect their employees and value their customers a lot. The company’s success could be applied to the couple’s passion, hands-on leadership and training style, and a genuine interest in the well-being of their employees.

Mathew was hired as a consultant, then as COO without a formal recruitment process. Mathew brought new people who were his family members and old friends to form the management team. The changes made were not appreciated by the employees, and the founders had not been consulted. According to Ludmilla, the couple thought that Mathew was very knowledgeable and would smoothly sync with the company’s culture. The couple also assumed that the company’s performance was failing due to new management and the increased dissatisfaction among the employees.

Iggy’s Bread of the World, a bakery store started by the Ivanovics, was a small business that grew exponentially over the years. As a result of the rapid growth of the business, the founder could not handle incoming orders and decided to expand their business. Also, the couple hired a professional, Mathew McRae as the chief operating officer to assist them in making the changes. However, the COO made changes to the culture of the business and recruited new management without consulting the founders. On confrontation, Mathew initially resigned and afterward revoked the resignation and demanded an increase in pay. The Ivanovics now face the challenge of deciding the fate of Mathew concerning the success of the business.

References

Freedman, D. H. (2020). Inside the Flour Company Supplying America’s Sudden Baking Obsession. Retrieved from Maker: https://marker.medium.com/inside-the-flour-company-supplying-americas-sudden-baking-obsession-623034583579

McGinn, K. L., and Alexis L. (2000). Iggy’s Bread of the World. HBS No. 9-801-282. Retrieved from: https://husson.instructure.com/courses/1783539/files?preview=115987484