Action Research and Organizational Development

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Action research is the process of inquiry that is used to assist an individual or organization in solving a problem or improving a situation. For each scenario below, think about the reasons why things did not work out well for the company and more specifically, think about action research in terms of developing a plan for action.
Your task for this assignment is to explain what steps the organization should take by reviewing the standard action research and organizational development steps covered in the background materials. Try to assess which key step is missing in the scenario below.
Then write a 4- to 5-page paper using three scholarly sources from the required and optional readings list addressing the following for the scenario below:
The Perils of XYZ Widget Company
Sales have gone down at the XYZ Widget Company and nobody in the organization, including the CEO, seems to know why. They decide to hire you, an organizational development consultant, to do some action research. You and the CEO spend a lot of time discussing how to proceed and create a contract. The contract specifies that you will limit the scope to finding factors that led to the decrease in sales, come up with a plan of action within one month, and answer the following questions using the background data from the scenario below.
Scenario:
XYZ Widget Company has lost 20% of its market share over the past two years resulting in a sales loss of 1.5 million in 2017 and 2 million in 2018 for a total of $3.5 million. Each widget costs the consumer $29.99 to purchase, and the average customer will purchase three widgets annually. Each XYZ widget is produced for $8 dollars and is of higher quality than the competition.
One competitor (Jim’s Widgets) in the widget industry with a similar product has increased market share by 12% due to a lower production cost of $4 per unit and price to the consumer of $9.99.
The CEO of XYZ Widget Company is reluctant to lower prices and has had to eliminate commissions and bonuses of sales employees who exceed goals. In addition, seven of the 21-member sales team were laid off for non-performance of sales goals.

Develop an Action Research Strategy Plan covering the following Action Research Phases in a report to the CEO.
• Data gathering and Diagnosis
• Feedback
• Planning Change
• Intervention
• Evaluation
1. What are the reasons behind the decrease in sales?
2. What actions or strategy (data/sales/changes) should be taken to turn sales around and regain market share?
3. What strategy should be taken to increase employee morale?
4. How long should this strategy take to complete?

Sample Solution

Action Research Strategy Plan for XYZ Widget Company

Introduction

XYZ Widget Company is experiencing a significant decline in sales, marked by a 20% market share loss over the past two years. This has resulted in a substantial financial impact, with a total sales loss of $3.5 million. The company’s competitor, Jim’s Widgets, has experienced a 12% market share increase due to lower production costs and a more competitive price point.

The CEO’s reluctance to lower prices coupled with the elimination of commissions and bonuses has led to decreased employee morale and layoffs, further exacerbating the situation.

This report will utilize action research methodology to diagnose the root causes of the sales decline, develop a strategic plan for recovery, and propose strategies to boost employee morale.

Data Gathering and Diagnosis

The first step in the action research process is to gather comprehensive data to understand the problem fully. Key data points include:

  • Sales data: Detailed analysis of sales trends, customer demographics, and purchasing behavior.
  • Market research: Comparative analysis of XYZ Widget Company and Jim’s Widgets, including product features, pricing, distribution channels, and customer perception.
  • Financial data: Profit and loss statements, cost analysis, and pricing strategies.
  • Employee surveys: To assess employee morale, job satisfaction, and perceptions of the company’s direction.
  • Customer surveys: To understand customer satisfaction, product preferences, and pricing sensitivity.

By analyzing this data, we can identify patterns, trends, and potential root causes of the sales decline.

Feedback

Open and honest communication is crucial for successful action research. Regular feedback sessions with the CEO, management team, sales staff, and other key stakeholders will be conducted to share findings, insights, and proposed solutions. This collaborative approach will foster ownership and commitment to the change process.

Planning Change

Based on the data analysis and feedback, a comprehensive action plan will be developed. Key areas of focus include:

  • Product strategy: Evaluate the product’s competitive advantage, identify opportunities for product enhancement or innovation, and assess the feasibility of cost reduction.
  • Pricing strategy: Conduct a thorough analysis of pricing elasticity and competitor pricing to determine the optimal pricing strategy.
  • Sales and marketing strategy: Develop a robust sales and marketing plan to regain market share, including targeted marketing campaigns, sales force training, and improved customer relationship management.
  • Employee engagement: Implement strategies to boost employee morale, such as employee recognition programs, career development opportunities, and improved communication.

Intervention

The action plan will be implemented through a series of interventions, including:

  • Product development: Invest in research and development to enhance product features or develop new products.
  • Pricing adjustments: Implement a carefully calculated price reduction to improve competitiveness.
  • Sales force training: Provide comprehensive sales training to equip sales representatives with the knowledge and skills to effectively sell the product.
  • Marketing campaigns: Launch targeted marketing campaigns to increase brand awareness and drive sales.
  • Employee engagement initiatives: Implement programs to improve employee morale and job satisfaction.

Evaluation

The effectiveness of the action plan will be continuously monitored and evaluated. Key performance indicators (KPIs) will be established to measure progress towards achieving the desired outcomes. Data will be collected and analyzed to assess the impact of the interventions on sales, market share, and employee morale.

Missing Step: Organizational Culture

While the action research plan outlined above addresses key areas of focus, it is essential to consider the impact of organizational culture on the company’s performance. A strong and supportive organizational culture is crucial for driving change and achieving long-term success.

Therefore, it is recommended to include an assessment of the organizational culture as part of the data gathering phase and to develop strategies to foster a culture of innovation, collaboration, and customer focus

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