Posted: January 15th, 2015

managment of SMEs

managment of SMEs

Case study:
Evainity Apparel is a small fashion design company, established 15 years ago by Evaine Luck.  Initially, Evaine opened her female clothing design and retail store with

only three employees: herself, her aunt Dee and her niece Cathy. Both Cathy and Dee contributed a small amount of the start-up capital and held a small proportion of

the firm’s shares. Sales were slow, and the three women were more than able to handle all of the chores. However, over the years, as the store’s reputation grew and

sales increased, Evaine realised that she would have to hire more people. She then employed two designers, Hatsu and Simon, to help her with that side of the firm.

This left the aunt and the niece to do the in-store retail sales and other day-to-day operational tasks.

While on a fashion tour five years ago, Evaine met a young designer, Selina Nisbet, whosework she had seen previously in a show, and to which she had taken an

immediate liking. Although Evainity Apparel already employed two designers, Evaine felt that Selina, with her different approach to design, would appeal to a much

larger and younger clientele, and so she decided to ask her to join the company. The additional salary meant an increase in operating costs, but Selina worked hard and

enthusiastically.
During the first three years of her employment, Selina’s designs sold well and the company’s sales increased dramatically. However, she was not happy about being

treated as the most junior designer, especially as Evaine, Hatsu and Simon travelled extensively and she was often left behind. Last year, Simon had a car accident

and, after recovering, did not return to work. Selina felt that the time had now come for her to be made chief designer.
However, Evaine decided that both Hatsu and Selina should stay in their current positions with an increase in salary, while Evaine took on the extra duties. This news

disappointed Selina enormously, to the extent that she even considered looking for a new job. However, her friends pointed out that she was receiving a top salary and

would soon enjoy the benefits that Hatsu already received.
With the extra work and increased family commitments, Evaine spent the next nine months in a constant rush to meet deadlines. She vaguely noticed that Selina was not

quite herself, and that the standard of her work dropped markedly. Selina’s recent designs lacked the flair and instant marketability that had previously been her

hallmark.
To overcome her tight workload, Evaine concluded that it would be best to hire people to help with the in-store sales, and allow her aunt and niece to handle the non-

selling activities. ‘It’s easier to train someone to sell than it is to teach them how to handle stock, payroll and administrative work. If I lose one of the new

people and am short Of a salesperson, I can always call on Aunty Dee or Cathy to help out. However, if I hire a woman to take care of stock or purchasing and she

leaves, the burden will fall directly on my shoulders,’ she told her relatives.
Four new people have since been brought on board in the last eight weeks to do the sales tasks, and Evaine has also decided to further increase the salaries of both

designers, mainly to address Selina’s obvious unhappiness.
Unfortunately, things have not worked out as well as Evaine had hoped. The new staff do not seem to know how to sell. Additionally, one of them has already asked for a

pay rise.
When Evaine replied that she would have to think about it, the woman pointed out that all other retail stores in the area were paying 20 per cent more for equivalent

jobs than EvainityApparel. And, just as worrying, Selina is not producing any new designs.

Questions:
I. Is an increase in salary likely to restore Selina’s motivation and work performance?
2. Evaluate Evaine’s performance as a human resources manager. What are her weaknesses?
3. Potentially, there is at least one other major human resources issue in this case that Evaine appears to have overlooked. Review this case and outline what you

think the undiscussed issue is.

As a rough guide, the final report case study assignment requires you to:
a) identify/justify the strengths and weakness(es) of the case study organisation (you may need to make intelligent/logical implications from the information given in

the case study on pages 366/367)
b) Identify (with supporting and specific evidence) the current issues/trends that are/can be relevant to the case study organisation
c) Make specific recommendations (with justifications) to link the respective issues/trends to the respective strengths and weakness(es) of the case study organisation

Instructions relating to Case Study Project Assignment
Assignments must have the standard AUT cover sheet completed and signed.
Assignments must be typed using one and half spacing.
Font size must be 12 in New Times Roman.
Staple in the top left corner, do not use plastic sleeves or covers.
Use the following structure provided for your report.
•    Title Cover Page (Student Name, ID, word count)
•    Table of Content
•    Executive Summary (One A4 side)
•    Introduction
•    Main Body (Findings/Discussion)
•    Conclusion
•    Recommendation(s) – including scope/limitations
•    Reference List (APA style)
•    Appendix (where applicable, but not required for this assessment)

Use APA format to reference (intext and reference list).
Do not repeat large pieces of factual information from the case.
Plagiarism may result in a zero mark and other disciplinary action.
You may need to make some relevant/logical assumptions that may not be explicit in the case. Please state and rationalise all assumptions you make.
Do not give generic or general answers; your answers must be specific to the case. Your analysis/discussions must be in depth.

ASSESSMENT 3 – FINAL REPORT ASSIGNMENT PROJECT
Due Date:    January 23rd 2015 – hardcopy to be handed to lecturer in class
Weighting:    50%
Type:    Project Assignment
Length:    2,500- 3,000 words
Submission:    In-class and turnitin
Requirements:    This assignment is a case study analysis and recommendation.  It combines quality/credible research findings, analysis, and practical applications of

academic theories/concepts to an assigned case study.
Compulsory:    This assessment event is not compulsory
Programme Learning Goals:
Be knowledgeable in their major field of study
Be self-directed, reflective learners
Be critical enquirers and problem solvers
Be effective communicators (written and oral)
Be able to think and act ethically
Paper Learning Outcomes:    •    Demonstrate understanding of the psychology and philosophy of entrepreneurs and small medium business operators.
•    Critically evaluate the environment of Small and Medium sized enterprises (SMEs).
•    Formulate strategies/recommendations for identifying and taking advantage of opportunities.
•    Critically comment on and evaluate managerial and operational issues affecting SMEs.
•    Demonstrate awareness of current issues facing SMEs and make recommendations for dealing with these.

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