Case Study:

Although ex-CEO Margo Georgiadis restructuring ideas were lauded internally at Mattel and many believed they were starting to show results, the environment shifted quickly for the toy company when retailer Toys R Us declared bankruptcy and financial results drove Mattels stock price to a heavy decline (73 percent) and a 10-year low. Georgiadis resigned less than a year after she started (to become CEO of Ancestry.com). One of Mattels board members (appointed by Georgiadis), Ynon Kreiz, became the newly appointed chairman and CEO. Kriez is Mattels fourth CEO in 4 years and has experience largely in entertainment and media-distribution along with a background in licensing and merchandising. He is the third CEO in row with no experience in making toys per se.

Not wasting any time and less than 3 months after Kriez starting, Mattel announced a reduction of more than 2,200 jobs, which equaled 22 percent of its non-manufacturing workforce. In addition, manufacturing plants in New York and Mexico were planning to be sold. Continuing the structural simplification program that was already started, Kreiz hopes to realize a $650 million gain. However, the restructuring plan has created a lot of anxious employees, and employees state that morale is near an all-time low. Asked about how he plans to reassure employees, Kriez stated that Its town halls. Its small group meetings. Its one-on-one meetings. Its traveling to all of our offices around the world and meeting people on the ground at all levels of the company. At the same time, part of my responsibility is less talk and more action. What we try to bring to the organization now is clarity and focus. If you do that, and youre transparent and forthcoming, the message travels. People eventually understand where you are heading and become part of the journey.*

Strategically, Kriez believes that Mattels future lies with creating its own media empire. In order to accomplish this, his plans largely revolve around turning Mattels brands into movies, television series, and video games. In order to accomplish this, Kriez has created an in-house studioMattel Filmswithin the company. Two major films based around Barbie (starring Margot Robbie) and a live-action Hot Wheels are set for production and release in 20202021. One investment analyst replied that Mattel is doing what should have been done 10 years ago.

Questions:

1. If you were a Mattel employee, would you be encouraged by what CEO Ynon Kriez said about how he is following up on restructuring? Is there a way he could have said it better?.(03 Marks)

2. How might Mattel change its structure to be more efficient or successful? (02 Marks)