Great Little Box Company And Ideon Packaging

BCIT Spring 2011 BUSA 2100 Term Project

OCEAN 11Cawkell, NatalieFu, FelixGill, KamalGuo, Ling LingHong, LeslieKeidanska, AllaKurooparan, ThadsujaLi, LingTan, LaurenceZhao, Meng Yue

Table of ContentsIntroduction -- By Leslie Hong and Natalie Cawkell....................................................................................4

Great Little Box Company.........................................................................................................................4Ideon Packaging.........................................................................................................................................4

Comparison................................................................................................................................................5Environmental Analysis – By Thadsuja Kurooparan and Kamal Gill...........................................................6

Great Little Box Company.........................................................................................................................6Ideon Packaging.........................................................................................................................................6

Comparison................................................................................................................................................7Organizational Culture – By Ling Li and Felix Fu........................................................................................8

Great Little Box Company.........................................................................................................................8Ideon Packaging.........................................................................................................................................8

Comparison:...............................................................................................................................................9Corporate Social Responsibility and Ethics – By Alla Keidanska and Ling Ling Guo..............................10

Great Little Box Company.......................................................................................................................10Ideon Packaging.......................................................................................................................................10

Comparison..............................................................................................................................................11Strategic Management – By Leslie Hong, Kamal Gill, Natalie Cawkell and Thadsuja Kurooparan..........12

Great Little Box Company.......................................................................................................................12Comparison..............................................................................................................................................13

Organizational Structure and Design – By Felix Fu, Ling Ling Guo, Ling Li and Alla Keidanska...........14Great Little Box Company.......................................................................................................................14

Ideon Packaging.......................................................................................................................................14Comparison..............................................................................................................................................15

Alignment -- By Meng Yue Zhao................................................................................................................16Great Little Box Company.......................................................................................................................16

Ideon Packaging.......................................................................................................................................17Comparison:.............................................................................................................................................18

References....................................................................................................................................................19Appendix......................................................................................................................................................20

1. Great Little Box Board of Directors...................................................................................................202. Great Little Box Company - SWOT Analysis.....................................................................................20

3. Ideon Packaging - SWOT Analysis.....................................................................................................204. Dimension of Organization Culture.....................................................................................................21

Introduction -- By Leslie Hong and Natalie Cawkell

Great Little Box CompanyThe Great Little Box Company is an innovative company in the packaging industry. Founded in 1982, with 3 employees including himself and a 5000sqft plant, Robert Meggy has expanded his company in every direction. Now with 220 employees and 250,000sqft of warehouse space, he still manages to keep the ‘family business’ atmosphere that GLBC has become so famous for. With even minimal amounts of research, it is clear that the Great Little Box Company is a forward moving leader in the packaging industry. Our interview with James Palmer, VP of Marketing and Sales made that fact even more clear.

The Great Little Box Company’s head office is located on Mitchell Island in Richmond. They have three branches, one in Kelowna, Victoria and Everett. Robert Meggy, Founder of GLBC is still fully involved in the organization and is the driving force behind the family business atmosphere. He encourages communication between all members of the company and makes a point of speaking to every employee at least once a week. He established the company as an innovator in the industry with a focus on excellent customer service. GLBC values their customers and strives to exceed their expectations on a daily basis.

Great Little Box Company is now Sustainable Forestry Initiative (SFI) certified which solidifies their position as industry leaders in environment preservation. They have also been voted as “Canada’s Top 100 Employers”, “The Best Companies to Work for in BC” as well as “Canada’s 50 Best Managed Companies” on numerous occasions. Some of the initiatives GLBC has taken to making a positive impact on the environment include the recycling of scrap materials and the planting of trees on their head office property to filter as much as 80,000lbs of pollutants from the air each year.

Great Little Box Company is not publicly traded but they do have an open book policy where they share their Profit/Loss Statements with their employees every month. The executive committee consists of Robert Meggy, President and CEO as well as a VP of Customer Solutions, VP of Finance, VP of Manufacturing and VP of Sales and Marketing. Their mission, “consistently being great people to deal with” is very fitting with this particular company. Employees of GLBC not only strive to exceed their customers’ expectations but also treat each other with dignity and respect. Charity organizations that GLBC support are the Quest Outreach Society and the Crohn’s and Colitis Foundation of Canada. Quest is an organization that saves food that would otherwise be given away and feeds it to the homeless. The Crohn’s and Colitis Foundation of Canada is a non-profit organization dedicated to finding a cure for inflammatory bowel disease.

Ideon PackagingIdeon Packaging was founded in 2002 by President Rick Van Poele with their first location on Annacis Island. Ideon is a privately held company and is considered to be a ‘new’ organization. Ideon started with a 25,000 sqft facility housing one piece of equipment to service the packaging industry. Their primary business is production of corrugated boxes. They believe that anyone can

make a well-structured box, but what sets one company apart from another is service. Ideon’s service is so efficient that they can provide estimates within four hours, samples within twenty-four hours and delivery in less than five days or else it’s free. They are so committed to their customers that if one require boxes the next day for whatever reason; Ideon will deliver the boxes the very next day because they believe that providing for their customers is necessary and not a negotiation. Beginning with a sustainable strategy of ‘speed to market’ and the consistency of ‘wowing the customer,’ Ideon has been able to successfully grow their business to what it is today.

During the recession, when the rest of the economy was in hardship, Ideon was still able to see substantial growth in their business. In 2006, Ideon moved to their current 66,000 sqft location, housing two pieces of equipment, a fleet of trucks with their own drivers, and a second building for inventory. They currently have 46 employees each divided among sales, design, customer service, logistics, production, and maintenance. The founder is still very active within the company. He is so involved still that his desk is situated among the sales team and he actually handles sales calls.

Ideon truly believes that their success has a lot to do with their decision making abilities. Can you remember the last time you called into a company to ask a question and their representative said, “Sorry, I need to ask my manager”? Well at Ideon, this would never happen, in fact, they claim that they pick up every phone call in two rings or less! Ideon does not believe in the role of supervisors and go as far as to say that they are only middle people that make decisions that can be made by the people that are actually doing the work. They constantly look to drive the decision making ability as far through the entire company as possible; therefore, empowering employees to make the decisions that affect their every day work.

Even though Ideon is rapidly growing in their business, they are still very environmentally and socially responsible. Ideon is always looking to conserve natural resources and reduce waste throughout the company, whether it be recycling or increasing the efficiency of energy use. Their employees are constantly running programs to collect and return recyclable bottles. The money collected from this program is then used to support the less fortunate through their “4 the Kids” fund. Portions of the “4 the Kids” fund is then used to help support families over the Holidays, where they provide three full meals and presents for the entire family. Ideon is always looking to give back through fundraising or volunteer efforts. They are proud supporters of local charity organizations such as Children’s Hospital, Eversafe Ranch and the Down Syndrome Research Foundation.

ComparisonAs a leader in the industry with a solid customer base and a family business atmosphere, Great Little Box Company caught our attention. Ideon Packaging is a relatively new company to the packaging industry that has been gaining acknowledgment due to their rapid growth and outstanding customer service. Both companies attribute their outstanding growth to customer service and differ in that Great Little Box Company focuses on an aggressive acquisition strategy whereas Ideon Packaging’s focus is on their “speed to market”.

Environmental Analysis – By Thadsuja Kurooparan and Kamal Gill

Great Little Box CompanyDuring the recession period, Great Little Box Company did not change their hiring policy, but instead tried to make cut-backs that didn’t affect the company or employees significantly. For example, sacrifices in staff lunches, company events, golf wear for the annual tournament were made. Christmas gifts to employees and children were also not given out. Through this time of economic hardship, GLBC did not lay anyone off, nor did they consider it. With an open-book management system, their employees could see the company’s financials; therefore, understanding why these changes needed to be made. The employees volunteered to have their costs of living not given to them for the year, so they could help the company. If an employee moved or was let go, they were not replaced, but instead, their work was evenly distributed among the other employees.

Based on GLBC’s specific environment, customers come first. Without them, they wouldn’t be able to set and achieve goals. Because GLBC’s main priority is to service their customers, their main challenge develop new and innovative ideas to keep up with the ever changing customer tastes and expectations. After customers, come their employees because in GLBC’s opinion, “without the employees, we wouldn’t have any customers”. They believe in a tight-knit family atmosphere, so it only fits that they value their employees. GLBC recognizes that strong partnerships are key in business, so they are very aware of how important their suppliers are to them.

According to GLBC, suppliers help the business by offering inputs at the lowest price available, which maintains the steady flow of the business. Also, GLBC produces its own material for the boxes. Their dependence on their suppliers is very minimal. Having competitors is also very good for GLBC because it motivates the employees to do what they do best and it keeps everyone actively involved. By focusing on their competitors, GLBC has knowledge of what to expect from their competitors and how to respond to them.

Since Day 1, GLBC’s packaging and products have been made from recycled materials, so public pressure is not an issue. They already understand how important the environment is to their customers. They act accordingly to continue being environmentally friendly in every possible way.

Great Little Box Company has been around in the packaging industry and has built strong relationships with their customers. They are well managed throughout the company from their top level managers to the employees in the warehouse. They have limited threats in this industry as their reputation, customer service, and wide range of products prove to be a great advantage.

Ideon PackagingThe economic conditions are improving quite steadily, as Ideon is experiencing tremendous growth rates in the range of 30% a year. Moreover, the recent HST change has not affected Ideon

like it has with other organizations. Ideon and many other companies receive rebates, so the HST effect is very minimal. Also, the technological conditions for Ideon are going to be changing as Ideon is installing a new machine in the warehouse. This will require an increase in the number of employees to work the new machine. The addition of a new machine will increase the output possibility by Ideon and is another step forward for the company.

In the specific environment, Ideon focuses on its customers and how to satisfy their needs better. Ideon values “speed to market”, where they get their design and ideas out to their customers faster than its competitors. Secondly, Ideon values the relationship with its Suppliers. They have built strong ties with its suppliers in Canada and the U.S. Ideon has not faced any pressure from public groups and do not worry about their competitors; therefore, they focus their efforts on how they can perform better. This is effective thinking because focusing on customer and supplier relationships will continue to make Ideon stronger as an organization. When it comes to environmental uncertainty, we believe that Ideon is in cell 1, as the degree of complexity and change is simple and stable. There are not many companies in this organization and the need for the product will always remain. Most components such as the economic conditions are becoming more and more stable as the economy is slowly resurging. Ideon’s main stakeholders are their suppliers, customers and to a minimal degree their competitors. The customers obviously want the product and the process of producing and delivering to keep improving. While the interests of the suppliers is generated from how much demand there is for boxes, Ideon does not rely on any of its suppliers as it can simply switch to any of their main 3-4 suppliers they currently do business with.

With a dedicated and committed staff, starting at the top and trickling all the way down the company, Ideon’s future is extremely bright. With sales increasing each year that they have been in business and the addition of a new machine, this is an exciting time for Ideon. The economic conditions are improving as well and the power of buyers is resurging. All these reasons make us to believe that Ideon will grow drastically and be a major player in the packing industry for years to come.

ComparisonThe environmental conditions for both companies are quite similar. Both companies have little holdbacks from government policies and no negative impacts from the HST. In addition, both companies are not affected by the U.S dollar or any public pressure groups, since they are both involved in environmental friendly activities. However, with Great Little Box being in business for a much longer period of time, this might be a huge advantage. With GLBC being well known within the industry than Ideon, customer loyalty will definitely come into play. Ideon is doing great things and they have achieved it in a very short period of time. It will be exciting to see if Ideon’s unique style can compete with The Great Little Box.

Organizational Culture – By Ling Li and Felix Fu

Great Little Box Company “Consistently being great people to deal with” serves as both Great Little Box Company’s vision and guideline when it comes to their organizational culture. Instead of developing organizational culture from the top down, employees are given the freedom to shape the company’s culture. The company‘s strong dimensions of culture includes People Orientation, Team Orientation and Attention to detail. They have a very strong culture in which employees share the key values and feel a sense of belonging. As a result, the company experiences very low turnover rates and high efficiency. From the owners to the management team within the company, they show support and care for every employee. Even with over 200 full time employees, the owner, Robert Meggy, considers them a closely knit, small family business. He talks to every employee in his company at least once every week. Moreover, the Vice President of Human Resources, Robert’s wife Margaret Meggy, knows the name of each child belonging to every employee. To maintain a low turnover rate, each candidate has to go through several interviews with the company’s management team and current employees to make sure they fit well with the company’s cultures. To encourage collaboration and team work, each new candidate is given half a day to work with a team of employees, while the interviewer evaluates how well they fit in.

Management decisions are also closely related to the concerns and inputs by individual employee. Great Little Box Company has an open communication and open-book program. Each month, a group of 10 randomly selected employees meet with the president to discuss any concerns and suggestion they may have for the company. Moreover, the company’s financial statements such as the profit and loss statement are provided for each employee to review. One extraordinary story told by GLBC that showed its strong culture in people orientation involved an employee’s son that was diagnosed with a form of leukemia and was living life’s final moments. When Robert Meggy heard that the son’s dream was to drive a BMW M3; he immediately wrote a cheque for the full price of the car making it possible for the son’s dream to come true.

The company also recognizes that in order to be successful in this industry, they need to exceed customer’s expectations. They realize the importance of the quality of work performed by employees. Therefore, they have a recognition program to reward outstanding employees. Each employee is given clear job descriptions, policies, and manuals upon hiring, so they know exactly what they are doing.

As a result of the strong organizational culture in the company, The Great Little Box is ranked as the No.1 BC Business Best Company to Work for. It is also ranked among Canada’s top 100 employers to work for and BC’s top 25 employees (2010).

Ideon Packaging

Ideon believes that its culture originates from the company’s vision, value, and mission. Ideon’s value is not only to listen to their customers’ requirements, but also to provide services that

exceed their customer’s expectations. In addition, Ideon is committed to including employees in the company’s management, development, and enables everyone to find fulfillment in their open environment. Ideon’s cultures are definitely positive and engaging, which enables Ideon to improving effectiveness and efficiency.

Ideon considers the seven dimensions of organizational culture to be equally important. However, based on our observation and analysis, we believe “attention to detail” and “people orientation” are Ideon’s core cultures. Ideon tries to ensure a safe and healthy environment for their employees and eliminates preventable accidents and health hazards in their business. Most importantly, Ideon does its best to create an open environment for their employees. Ideon’s attention to detail, another core culture, is deeply held and widely shared. The company listens to their customer’s requests and provides individual, creative and considerate solutions. Ideon answers the phone in 2 rings or less, provides estimates within 4 hours, offers samples within 24 hours, returns voice mails within 30 minutes and delivers boxes in five days with a guarantee. Ideon finds its own way to convey its culture to employees, including material symbols and rituals. Ideon holds a meeting every morning at 8:45 am, which will last about 5-10 minutes. Everyone has the chance to hear the company goals for the day, voice their ideas and give feedback. Reflection meetings are conducted every day at 4:00 pm where employees can discuss the day’s events. Ideon also has quarterly barbecues and annual Christmas parties as a part of their rituals. Also, Ideon’s office layout reflects its culture and creates an open environment. There are no doors in the office, apart from the door belonging to the meeting room. The employees can communicate freely with each other during office hours. Ideon displays their symbol by putting their logo on their delivery trucks and boxes.

Comparison:Great Little Box Company and Ideon both value people orientation as the most important dimension of organizational culture. Similarly, the two companies hold regular meetings to allow the employees to voice their concerns and suggestion to the management team. As a result, their inputs are taken into consideration for future decisions. Ideon and The Great Little Box Company believe that in order to be successful, they need to provide quality services and exceed the customers’ expectations. That is why both companies pay close attention to detail when it comes to accuracy and efficiency. Both companies have strong cultures which influence their daily operations and employee behaviour. However, Ideon’s culture is geared more towards the company’s operations while Great Little Box Company’s culture mainly focuses on building trust and positive teams that work efficiently together.

Corporate Social Responsibility and Ethics – By Alla Keidanska and Ling Ling Guo

Great Little Box CompanyGreat Little Box Company believes that businesses should have a positive impact on communities and the environment. Therefore, the company has been fulfilling its commitment to conduct its business in an environmentally sensitive and responsible manner for more than 28 years.

Great Little Box Company is currently in the third stage of Corporate Social Responsibility, which is the stage of “Constituents in the Specific Environment”. The company not only consistently exceeds customer expectations by providing high-quality, sound products and packaging, but also takes every opportunity to be socially responsible.

Great Little Box Company has been committed to running its business in a sustainable way and contributed greatly to the environment. The company has become SFI (Sustainable Forestry Initiative) certified, which is a non-profit organization that is dedicated to promoting sustainable forest management in North America and supporting responsible procurement globally. To fulfill its Corporate Social Responsibility duties, the company has organized several programs which all aim to protect the environment and benefit their customers. One of the company’s programs, in which it has invested nearly $150,000, collects and bundles corrugate scraps for recycling. It successfully recycles over 70 tonnes of scrap per month from the plant. In addition, the company only uses water-based, non-toxic inks and sends all of the waste back to suppliers for recycling. The company also runs a recycling program to collect staff waste such as pop cans, bottles, newspapers, and plastic containers. Proceeds from this program go to World Vision of Honduras to help support children in Central America. Furthermore, the company has allocated prime parking spots to staff that carpool to work to support its carpool and bus pick up program.

Great Little Box Company has routinely contributed a portion of their profits to support its Corporate Social Responsibility policies and we have reason to believe that this has a positive impact on the company’s financial performance. According to a survey of shoppers, 61% were more inclined to purchase products from a company using recycled boxboard packaging. This shows that the customers feel better about a company that is socially responsible, which in turn will lead to an increase in the company’s long run profits. It demonstrates a positive relationship between the company’s social involvement and its economic performance.

Ideon Packaging Rick Van Poele and his team are making social responsibility a guiding principle for the company, so Ideon Packaging looks beyond making profits, to protecting and improving society’s welfare. Being aware that the company is not an independent entity from the larger society, Ideon is committed to the preservation of the environment for the benefit of future generations. The corporate social responsibility program “4 The Kids” was created in 2008 by the president and supported by all employees.

The company fits in the third stage, “Constituents in the Specific Environment,” of the four stages model of the progression of social responsibility. The company values include providing creative solutions for customers through the careful listening and understanding of their needs; providing high quality services that exceed customer expectations, fair prices and good relationships with suppliers. Every year, the company has a bottle drive and a clothing drive, which focuses on delivering clothes directly to the people who need them. Through the toy drive, Ideon supports Richmond Christmas Fund and families at Christmas time. The company participates in the “Adopt a Street” program, where they maintain and consistently clean one kilometre of the street adjacent to their building.

Socially responsible activities positively affect companies’ economic performance. In 2009 the company was honoured by the Richmond Chamber of Commerce with Business of the Year Award (21-50Employees Category) at their Business Excellence Awards. The company believes CSR creates value for all stakeholders, the community, team members, and the planet. For the Ideon team, CSR programs are an opportunity to give directly to people who are less fortunate in the community. Ideon Packaging recognizes the close link between its decisions and activities and their impact on the natural environment. The company is environmentally sensitive and belongs to the stakeholders approach in the model of Approaches to being Green. Ideon is working to meet the environmental demands of employees, suppliers, customers and the community. The company’s goal is to take an active role in using both natural and recycled resources in an environmentally sound manner. In 2007, Ideon Packaging diverted 23 cubic yards of recyclable materials from landfills equating to about 12 full sized pickup trucks worth. The company’s recycling efforts sequestered approximately 4 tons of carbon emissions. Ideon collects all the scrap produced in its manufacturing processes, which is then recycled to eventually be converted into more corrugated boxes. The employees of Ideon Packaging collect and return all their bottles and cans from both work and home. Ideon treats its employees with fairness and respect. All employees have the opportunity to be voted in to the company’s profit sharing group by their peers after a full year's employment. To ensure all employees get home safe, Ideon Packaging provides the Keys Please driving service for all its employees.

ComparisonGreat Little Box Company and Ideon Packaging are both going beyond their social obligation and are making efforts to benefit society. Great Little Box Company has been committed to conducting its business in a way that is responsible not only to its employees and customers, but to society as a whole for more than 28 years. Compared to Great Little Box Company, Ideon Packaging is a relatively small and young company, but they have responded to demanding society needs by creating a healthy, economical community and ethics policy that affirms the company’s intentions to act ethically in all of its dealings. Both companies understand that all team members add value and are the key to success. They value integrity, honesty and protect society’s welfare. Both companies understand that being socially responsible is crucial to success.

Strategic Management – By Leslie Hong, Kamal Gill, Natalie Cawkell and Thadsuja Kurooparan

Great Little Box CompanyGreat Little Box currently is following a growth strategy by expanding their products and services to better meet their customer’s changing wants and needs. They stand out among their competitors by providing the convenience of a “one stop shop” to their customers. With an aggressive acquisition strategy, GLBC has the largest sales force in the industry. They use Market Penetration as a strategy and currently have two acquisitions underway. They plan to increase their revenue from $40 million to $60 million in 5 years and are very confident that they will achieve this goal. They are in the process of increasing their market share in the food packaging sector.

Great Little Box Company’s business strategy along with their acquisitions and products, place them in the “Stars” portion of the BCG Matrix. They are in a relatively fast growing market, are constantly acquiring new companies with other operations to increase their diversity and hold a large piece of the market share in the packaging industry. Threat of new entrants is relatively low in this industry because not only does it take a large amount of capital, but with GLBC’s large sales force, it is daunting for start-up companies. The threat of substitutes is apparent, but not worrisome. GLBC is always developing new products; therefore, they are able to keep up with changing consumer demands. Buyers have all the power in the packaging industry, so it is only necessary for GLBC to satisfy all their customer’s wants and needs. Bargaining power of suppliers is low; there are suppliers in both Canada and the United States. Rivalry is present in GLBC’s industry, but their loyal customer base and market share guarantees them a spot among the top companies in the packaging industry.

Great Little Box Company’s business and competitive strategy is composed of a focus on growth and aggressive acquisition. They look to acquire companies with well established and effective operations. This way GLBC can benefit from the newly acquired company’s knowledge rather than having to build from the ground up. GLBC looks to avoid high turnover rates, so their policy is to only acquire companies that are less than 20% of their size. Acquiring smaller companies allows for smoother integration of both new employees and operations into the GLBC organization. GLBC has chosen a differentiation strategy. Their goal is to be a “one stop shop” destination for customers, a place where their packaging and labelling can be done in the same place. They value exceptional customer service and innovative technologies to reduce waste, injury and production time.

Ideon PackagingIdeon’s current organizational strategy is based around their most important external factor, the customers. Their values are solely focused on their customers and listening to their requirements by consistently performing to exceed expectations. The business model that Ideon pursues is to “wow the customer” and “speed to market.” These two models go hand-in-hand as explained by Mike Nunn, Operations Team Leader.

The source of Ideon’s competitive advantage is their consistent speed of response to their customers. They take calls before two rings with no automated phone system, provide estimates

within four hours, samples within twenty-four hours and will deliver within five days of placing the order or it’s free. With every Ideon employee believing in their company’s values, they are able to place this added pressure on themselves to perform and meet these promised needs consistently.

Ideon’s “speed to market” strategy is a competitive advantage that has clearly been sustained since they have been able to grow their business annually by about 30%. With such high growth, Ideon would be placed into the “Question Marks” category of the BCG Matrix, which states that they are in an attractive market, but hold a small share of it with a lot of promise of performance. Ideon’s strategy has been successful because of many factors. The threat of new entrants into the corrugated packaging business is rather low because the initial capital needed to start one is very high. Costs would include a large capital investment, which does not include the costs of employees and facility. Also, to be successful in the packaging industry, you have to be knowledgeable in packaging and understand customer needs; therefore, it appears that there is a high barrier for new entrants. The threat of substitutes for Ideon is moderately low because there are only about six companies within the lower mainland that provide this type of service. The power of buyers in this industry is always increasing because in the packaging industry, customers consist of any company that develops a product that requires packaging. Ideon’s success depends on their customer’s repeated business. They primarily purchase from three to four suppliers, but claim they are not dependent upon them; therefore, the bargaining power of suppliers is relatively low. Rivalry in Ideon’s industry would be considered high since Mike Nunn states that “anyone can make a great box” and this industry is relatively small.

The competitive strategy that Ideon pursues is differentiation. Ideon wants to separate themselves away from their competition and create a category of their own. Ideally, when potential customers think of packaging, they want people to think of Ideon. Ideon wants to focus on what their company does best and not what their competitors can or cannot do. And what Ideon does best is meeting their customers’ needs and exceeding their expectations, which will set Ideon apart from their competition. Ideon doesn’t pursue the cost leadership strategy because Mike Nunn mentions that if your company is a low cost provider strictly selling on price, you will lose your business on price by another company with lower costs, taking margin out of your product that you will never get back. By selling on differentiation and staying consistent will their values of “speed to market” and “wowing the customer,” Ideon believes that this sustainable competitive advantage will set them apart for the long term.

ComparisonGreat Little Box and Ideon share a lot of similarities in strategic management. They both place their customers as their primary focus for their businesses to succeed. Like any company, growth is very important. That is why both Great Little Box and Ideon support their corporate strategy of growth with sustainable competitive strategies. Although they both use differentiation as their competitive strategy, GLBC focuses more on acquisition, while Ideon aims to achieve a “speed to market” approach. Also, another contrast between their differentiation strategies is that GLBC is constantly trying to give their customers a “one-stop shop” experience, while Ideon strives to “wow their customers.” Clearly, their growth is very apparent since both companies report that they are experiencing double-digit growth rates and expect to see their businesses flourish in the coming years.

Organizational Structure and Design – By Felix Fu, Ling Ling Guo, Ling Li and Alla Keidanska

Great Little Box CompanyGreat Little Box Company is a traditional mechanistic organization. It is characterized by rigid departmentalization, narrow spans of control, and high formalization. According to the organizational structure chart provided by the VP of Sales and marketing in our interview, Great Little Box Company places customers at the top. The head of the company is the president and he oversees the five major divisions in the company. Each division is headed by five Vice Presidents and they use the functional approach to departmentalization. They include the VP of Operations, VP of Sales and Marketing, VP of Finance, VP of Customer Solutions and VP of Human Resources. Under each of the company’s divisions, the Vice President oversees different departmental managers that have specific duties and leads a team of specialized employees.

According to the chart, lower-level employees seldom participate in decision making. However, they do go beyond the ties of this mechanical structure and have unique ways of letting their employees participate in decision making through their organizational culture. The company has ranges of departments and its employees are highly specialized. For instance, they have a scheduler who is responsible for deciding how to commit resources between a variety of possible tasks, a truck driver whose duty is to deliver goods to its customers, a cost analyst who is responsible for analyzing company costs and resources and reporting to the VP Customer Solutions for decision-making and control. Every manager only manages a limited number of employees. To be more specific, the design manager only provides leadership and support to the labels scheduler, the labels lead-hand and pressman, label division. In conclusion, the Great Little Box Company is highly mechanistic.

Ideon Packaging Ideon Packaging is a relatively small company and considers itself as an organic organization. As a result, continuous line of authority that extends from upper levels to the lowest organizational levels is not necessary. They have very few team leaders, in which individual ideas and opinions are taken into consideration.

Because of the company’s size, Ideon has less specialization, departmentalization, centralization, and rules and regulations compared to a bigger company. Ideon uses a team structure and divides their employees into six teams including a design team, production team, sales team, customer service team, maintenance team and logistics team. Employee teams are free to design work in the way they think is best. All employees are able to make decision and provide their customers with different services based on customer requirements. In addition, 46 employees will directly report to the company’s manager. There is no supervisor between the company owners and employees.

The owners and the manager cooperate with its employees on establishing client relationships, designing of their products, which will definitely improve their work effectiveness and

efficiency. At the operation level, every employee is in control and responsible for their own functions. Employees are taught and encouraged to make decisions and affect change.

Work flow starts from a customer order. Even though the company has a team structure, the flow is never divided. All teams work together and customer orders travel through all groups. The sales team, after acquiring an order, gives it to the design team and in turn to the customer service team, which then communicates with the customer. Finally, the logistic team provides scheduling and the production team is responsible for the final product. The company works in constant contact among all teams. All employees know each other because the entire company works on the first name basis. A lean organizational size with a balanced number of employees makes Ideon’s organizational structure very efficient. The company’s flexible and organic structure helps to reduce environmental uncertainty.

ComparisonGreat Little Box Company and Ideon Packaging varies greatly in their size, as a result, they have very different organizational structure. With over 200 full time employees, GLBC has a formal mechanical structure with a president and several VPs controlling different functions and areas of operation. On the other hand, Ideon with 46 employees has a organic structure. The owners both participate and oversee the company’s operations. Their employees report directly to the owners without any intermediaries. In terms of their work flow process, GLBC has a ladder structure in which the employees report to their departmental managers. Then the departmental managers report to the vice president of their area of operation for evaluation. For Ideon, they have a flat work flow structure. They work in teams that specialize in different areas of work, but interact and cooperate with each other to complete the entire work process. Their employees have varying degrees of control within the two companies. For GLBC, the employees have a narrow span of control as each one has a supervisor that oversees their work. Ideon when compared to GLBC has a wider span of control because each employee is responsible for their area of specialization and they do not have immediate supervisors.

Alignment -- By Meng Yue ZhaoOrganizational alignment evaluates the consistency between an organization’s strategy and culture. Many organizations are fully aware of the importance of defining a clear strategy in order to survive in the ever-evolving market; many of them are also aware that by building sustainable organization culture, an organization has a better chance of getting competitive advantages over the competitors. However, fewer organizations are able to emphasis or establish the connection between their strategy and their culture. Fortunately, the two companies that we interviewed have demonstrated great abilities in integrating their values into their goals, connecting their objectives with practices, and linking their activities with behaviours.

Great Little Box CompanyStrategyGoals: The Great Little Box Company strives to maintain its industrial leadership in the packaging industry; it also plans to increase their product line and to acquire higher market share in several industrial sub-sections. Currently, GLBC is the biggest packaging solution provider in the Vancouver area. Although GLBC has a dominate position in the relatively small packaging industry, it still faces competitions from innovative start-up companies who are more flexible in accommodating customer requirements and who are more dedicated to various niche markets within the packaging industry. In order to maintain industrial leadership, GLBC needs to enter into different sectors of the packaging industry and increase its overall market share.

Objectives: To increase revenue is the main strategic objective of GLBC, and they have the ambition of increasing sales revenue from $40 million to $60 million in five years. In 2010, GLBC experienced 14% growth rate while other manufacturing companies are still struggling with the residual impact of the worst economic recession since the 1930s. GLBC has made a very specific objective and Mr. James Palmer, the VP of sales and marketing, is very confident that GLBC will achieve it.

Activities: GLBC’s objective of increasing revenue by 50% in the next five years brings us to the next big question: how are they going to achieve it? They are going to achieve it by 1) taking advantage of its biggest physical asset, the 250,000 square feet warehouse, to promote one-stop-shop to customers, and 2) pursuing an aggressive acquisition strategy.

CultureValue: Everyone who works in GLBC takes pride of their company value, which is “Consistently Being Great People to Deal With”. GLBC knows the importance of being recognized as people instead of employees in an organization and they promote a people-oriented culture.

Practices: GLBC believes in “hiring the right people.” An applicant usually goes through 6-7 interviews before joining the company. During the interview, the applicant has the chance to meet and to talk to potential co-workers, managers or even the president of the company. The purpose of this long and costly process is to find the right person who can fit into the culture and who will stay for a long period of time. GLBC does not just hire employees; it invites the right people to join the big family.

Behaviors: Every employee of GLBC takes ownership of the company and enjoys the open communication atmosphere and transparency throughout the whole company. People frequently contribute their ideas to improve the efficiency of the daily operation and they will be awarded and recognized if their ideas are accepted. They are not afraid to talk to managers or the president of the company. The unique culture unleashes the full potential of people’s innovative ideas and makes GLBC one of the best companies to work for. At the same time, employee involvement is a key ingredient of company success.

Ideon PackagingStrategyGoals: As a young and growing company, Ideon’s main strategic goal at this stage is to differentiate itself from all the competitors and to increase its overall market share. They approach their customers as a speedy provider who can offer the fastest packaging solutions in the industry. Also, they are actively looking for opportunities to increase its product mix in order to gain loyal customers who are looking for more comprehensive services.

Objectives: Ideon is proud that they have maintained double digit growth rate since the founding of the company and their objective for the year of 2011 is to maintain 20-30% growth rate.

Activities: Lean production is the main focus of Ideon’s daily operation. Ideon has done every effort to streamline the procedures and to minimize the intermediaries a customer needs to go through when requesting quotes or ordering. During our interview, Mr. Mike Nunn, the operations team leader, told us a true story to demonstrate that Ideon is capable of delivering a customized sample on the same day of receiving customer inquiry.

CultureValue: On Ideon’s website, they listed their values into seven categories. Ideon values customers, team members, integrity, and lastly, responsible profit.

Practices: Ideon does not have departments or managers; it has teams and team leaders. There are no supervisors in the company as a way of executing lean production. Ideon believes that every team member is an important decision-maker and everyone is capable of making the optimal decisions for the company.

Behaviors: The open space design in the shared office area is a great reflection of Ideon’s culture and influences every team member’s behaviors. The only room with a door is the meeting room, where Ideon’s teams meet and discuss products with their customers. During business hours, all team members, which include sales team, customer service team, design team, production team, and even the president himself, share the same open office area. There are no offices, only work space. Open communication is not just a slogan in Ideon; it is embedded in the physical space and it is reinforced through everyone’s daily behaviors.

Comparison:GLBC and Ideon share a lot in common from both the strategic and culture perspectives. From the strategic perspective, both companies are customer-oriented and they focus on growth strategies. Not surprisingly, both companies agree that customers are the most important factor in the business. During our interviews, we also found out that both companies identify growth as their main corporate strategy. Both companies are experiencing double-digit growth rate and they expect their company to continue growing in the upcoming years. Ideon is purchasing new equipment, increasing product lines and hiring more team members. On the other hand, GLBC has been pursing an aggressive acquisition strategy since 2006 and it expects the employee headcount to grow alone with the on-going acquisitions. From the culture perspective, both companies are people-oriented and both of them promote open communication throughout the organizations. GLBC and Ideon acknowledge that human capital is the most important asset in the organizations. They have built various programs to empower their employees and reward their employees through financial rewards and company-wide recognition. They are also aware that none of the above mentioned programs will work without open communication.

However, since GLBC and Ideon are different sizes, they differentiate from each other in many ways. Currently, Ideon has 46 employees and GLBC has 220 employees. The difference in size leads to the differences in services provided and organizational structure. GLBC is taking advantage of its 250,000 square feet warehouse and provides its customer a “one-stop-shop” experience. GLBC’s customers can save transportation costs by storing their orders in the warehouse. On the other hand, Ideon focuses on providing speedy service to its customers. Ideon’s customers know that their orders will be delivered in five days, guaranteed. At the same time, managing over 200 employees is quite different from managing 50 employees. GLBC has a rather mechanic organization structure while Ideon enjoys a more organic team structure. As they grow in size, it will be a challenge for Ideon to decide whether to keep its organic structure or change to mechanic structure.

References

The Great Little Box Website:http://www.greatlittlebox.com/

Ideon Packaging Website:http://www.ideonpackaging.com/

Organizational Alignment by Donald T. Tosti and Stephanie F. Jackson

Interview with Mr. James PalmerVP, Sales and Marketing, Great Little Box Company

Interview with Mr. Mike NunnOperations Team Leader, Ideon Packaging

Appendix

1. Great Little Box Board of Directors:President and CEO:   Robert MeggyVP Sales and Marketing:   James PalmerVP Finance:   Margaret MeggyVP Manufacturing:   Nick ReiachVP Customer Solutions:   Carol Toy

2. Great Little Box Company - SWOT AnalysisStrengths

Very entrepreneurial company Use of packaging items that involves less manufacturing and less raw material 100% recyclable cardboard displays SFI-Sustainable forestry Initiative certified Motivated employees

Weakness Integrating all the growth and acquisitions and keeping everything up to date is quite

complicated

Opportunities Growth strategy Acquiring companies (less than 20% of their own size)

Threats The US dollar value

3. Ideon Packaging - SWOT AnalysisStrengths

Speed to market strategy- contributing to Ideon’s 20-30% growth rate since it has been in business.

Excellent customer relationships and service. Unique and friendly work environment.

Weaknesses Relatively new company in the industry- customer loyalty may be limited. Smaller company than most of its competitors. Buy material for boxes from outside company.

Opportunities New machine being installed- will increase output capacity.

Increasing warehouse space to hold more inventory. Economy is resurging- more potential customers.

Threats U.S dollar amount affects Ideon to a minimal level.

 

4. Dimension of Organization Culture