Mini-minicase: Mary Kay, Inc.

This mini-minicase is written to highlight how a seemingly low-tech company, a cosmetics company, would be affected by the use of information systems.

The way organizational strategy need to change to respond to Mary Kay’s new business strategy:

Organizational changes would need to be consistent with a revised organizational strategy. If no organizational changes were made, we’d expect the systems to be rejected by many of the workers. Managers would expect IBCs to use the systems, but IBCs are independent agents, so they would most likely delay in using the systems unless motivated to do otherwise. Thus the reward and compensation systems would need to be adjusted to accommodate the new system. And unless business processes were also changed to accommodate the new systems, we would expect problems to occur that make it difficult for the new systems to be used (information entered into the system might be just printed out, if the processes are expecting paper-based forms rather than screen shots).

You might also want to explore business process that would have to change to accommodate the new systems. The paper-based ordering system would have to be removed, if managers wanted IBCs to only use the new system, since running the older system discourages IBCs from using the new system. Fulfillment and reconciliation processes would be different with the use of mymk.com, since the order information was entered earlier into the system. If customers of IBCs place orders automatically, IBCs lose control over what is ordered, and will have to build new ways to keep track of their sales. If fulfillment processes are done using paper pick lists, then the process either needs to be redesigned to use electronic lists (shown on the screen or such) or to print out paper lists.

Changes that would be suggested for Mary Kay, Inc. managers to make in their management systems in order to realize the intended benefits of the new systems. Specifically, types of changes would be expected to make in the evaluation systems, the reward systems, and the feedback systems:

Evaluation systems would include a component of how well the systems were used by the IBCs. There would need to be an evaluation of the frequency and effectiveness of the use of the systems. That may translate into the reward systems, where IBCs are compensated for their use of the systems (direct bonuses, etc) or where they find that using the systems gives them advantages they didn’t get otherwise (faster orders, better book keeping, etc). IBCs might need incentive packages to encourage them to buy computers if they don’t have one already (such as discounts from a preferred vendor ). Support processes would be needed to help IBCs learn how to use the systems effectively, and to help them identify new ways to do their business better. The results of the evaluation process would have to be used to provide feedback to the employees. Possibly, in discussing an employees performance, it may be helpful to share with them average performance levels of other employees.

* Source: Pearlson & Saunders (2006)