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282 Part 3 • Organizing
decline. Currently, 86 percent Beauty, Bliss, Doobop, and
of Avon’s sales come from Poor performance even Chanel and Clinique. On
other global regions. The com- forces change top of struggling to compete
pany’s CEO is looking at what in online sales and lacking a
organizational changes need to cohesive social media strategy,
be made to address the performance problems. Avon is being pummeled by other industry giants including
Avon, founded in 1886 (yes, you read that right!), has been L’Oreal, Unilever, and Coty, all of whom have increased their
quite successful, up until the last five years. It was a company efforts to hold on to market share domestically and have made
that got its start by recruiting women as door-to-door sellers new forays into profitable developing markets where Avon has
of perfume and branching out from there. Today, there are long had its strongest sales.
some 6 million active sales representatives in 60 countries or Changing an organization involves looking at external
territories around the world. Brazil is the company’s biggest market conditions as well as the internal aspects. Avon’s CEO,
market. However, as the industry has changed, as competitors Sherilyn McCoy, who was brought on board from Johnson &
have become more aggressive, and as technology has drasti- Johnson in 2012, has been struggling to find the keys to a suc-
cally changed the sales model, Avon has been struggling. One cessful turnaround. Her attempts to shape up things at Avon
sticky problem the company dealt with was an expensive brib- have revolved around overhauling the company’s top manage-
ery probe centered on the company’s Chinese operations. The ment through firings, hirings, and reassignments; address-
company voluntarily reported itself in 2008 to the Securities ing declining sales, especially in the North American market
and Exchange Commission and the U.S. Justice Department. through expanding the range of products sold (think colorful
It took some six years for Avon to finally resolve the investiga- vegetable peelers) and getting more sales representatives into
tion into payments and gifts provided to government officials the system quickly; and trying to pinpoint who and what Avon
in China, and in late 2014 Avon agreed to pay $135 million in wants to be.
fines and civil penalties related to violating the Foreign Corrupt The world has changed. Now Avon has to try to find the
Practices Act. Another problem concerned the global rollout right combination of people, products, and technology to once
of a sophisticated order management system that had been in again prosper.
the works since 2009. Avon had initiated a massive software
upgrade that would make tracking orders and compensation Discussion Questions
easier for its reps. However, the program was scrapped in 2013 8-18 What external forces for change do you see described in this
after a trial rollout in Canada. A filing with the SEC said that case? Would you describe Avon’s environment as more “calm
the pilot program caused “a significant business disruption in waters” or “white-water rapids?” Explain.
that market, and did not show a clear return on investment.” 8-19 Why would it be important for the CEO to look at those external
The issue: the technology worked, but it was so hard for forces when planning organizational change?
Avon’s salespeople to use that many reps left the company. 8-20 Why might it be difficult to change a company that’s over
Although Avon finally completed the first major overhaul of 130 years old?
its Web site in 10 years, it now finds itself competing against 8-21 Avon is truly a global company. How might this affect the CEO’s
more nimble e-commerce competitors such as Birchbox, Cult efforts to implement organizational change?

CASe APPLICAtIOn 3
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Stress Kills

e know that too much stress can be bad for our health of the worldwide media, the public, and the French government
and well-being. That connection proved itself pain- because many of the suicides and more than a dozen failed suicide
53
Wfully and tragically at France Télécom. Over the attempts were attributed to work-related problems. The masks
last seven years, there have been more than 50 suicides of people worn by these protesting Telecom employees say “Lombard has
who worked for the company. The situation captured the attention killed me.” Didier Lombard was the chairman of the board and