A real case of organisational failure is Diva International Proprietary Limited (Pty Ltd), a woman’s fashion jewelry retail store, with operations ran in Australia and New Zealand by Brett Bundy. This organisation’s failure is a result of organisational behaviour and operation factors such as, the engagement of unethical practices and the role of customers and employees in the business. This project report will outline the issues and response of Diva that resulted in the failure of the retail chain. The understanding of the needs and roles that individual, group or organisational factors will be emphasised through the organisations’ response to failure and the impact on the business moving forward. The analytical framework of ‘SWOT’ analysis will be used to identify the strengths, weakness, opportunities and crisis Diva is facing across a variety of internal workplace job positions. Diva’s implementation of change through the rebranding of stores, social media responses and the establishment of new jewelry stores in the market will be evaluated and explained. To provide a realistic recommendation for Diva to implement the business’ response to change will be considered and managerial and motivational strategies encouraging employee and employer interaction will be suggested. Managers of the stores of Diva must seek to understand the culture, leadership, employee motivation and may have to implement reward systems to encourage antecedents such as, providing store vouchers after an employee meets a sale target. This reward system will provide positive reinforcement to Diva employees whereby, they feel valued at their workplace and creates an organisational culture with shared values and togetherness to acknowledge and achieve daily targets, the mission and long-term business objectives.

Individual, group or organisational factors and contribution to failure

Diva International Pty Ltd specializes in selling women’s fashion jewellery such as, earrings, bracelets and necklaces as well as non-jewellery products such as, iPhone covers and gift cards. Diva’s customers consisted of teenagers who appealed to the bright colours and variety of unique styles offered in the store. These customers remained engaged and informed through their store advertisement and employees wearing their jewellery in the store. Diva did establish a niche in the market for women’s jewellery in Australia since 2003 and customers including, parents of teenagers, local magazines and television supported Diva. Diva expanded their stores and was known as a chain of stores across Australia and New Zealand. They soon began to sell their products through a network of retailers in Russia, United Kingdom and America. Between November 2012 and June 2014, 88 Diva stores was changed and rebranded into Lovisa stores because of individual, group and organisational factors. The employees were reported to be forced to wear at least five Diva accessories when working in the store. Employees was forced to purchase these accessories from their own individual wages and accordingly, needed to file a claim to receive their money back. Employees were misled into purchasing and wearing the brand’s clothing and jewellery which was a breach of ethics and confirmed that the practices comply to Fair Work Australia and international laws. As it is not actually a policy to wear the stores clothing as outlined by the Fair Work Act in 2013, only uniform is in the policy for employees to oblige with. The community, families and parents of the employees in Diva particularly employees aged 15 years old who were forced to purchase Diva products was aware of Diva’s injustice and unethical practices. These groups acted as customers of Diva and were less likely to make purchases from Diva or recommend their services. Organisational factors for example the management of organisational change and structural design due to leadership, the company values, policies and work ethic affected the culture of the business. Organisational factors were neglected and compromised by Diva in their daily work operations impacting on individuals and groups. The store requirements and operations of the employees such, unethical practices, therefore contributed to the organisational failure.

Diva post-failure and response to failure

Brett Bundy focused on expanding stores across Australia and overseas, he established websites and implemented Diva upon many social media platforms such as, Facebook for company advertising and brand awareness. Diva however experienced organisational failure in the ethics code of conduct in a workplace was breached because of their treatment of employees. This was followed by the controversial headlines made on news platforms about the distribution and advertisement of Playboy-branded accessories in Diva. Customers including the parents of young teenagers and employees expressed their anger and disbelief of the choice of the company to launch the Playboy-branded accessories. Many were outraged by this decision for it to not be appropriate for a Playboy range to be sold to young girls, minors, the primary customers of the store. The customer’s posted negative responses were publicized on Facebook pages, Instagram and via change.org as well as, written letters and emails which were disregarded by Brett Bundy’s company. Brett Bundy failed to respond efficiently to the comments posted on social media as well as the petitions, emails and written letters sent to Diva and instead mishandled the issue. This resulted in employees making reports about Diva’s practices and customers no longer purchasing or supporting the company. Diva was not successful in implementing an effective response to recover the organisation’s reputation and stakeholder’s trust. The failure of Diva could have been prevented or recovered, however, Jewellery stores established and owned by Colette and Mark Haymond (founders of Diva) such as, Colette and Lovisa, focused on their customer awareness and brand awareness to increase sales and market growth. Lovisa revenue grew from $25.5 million in the 2011 Financial Year to 107.5 million in the 2014 Financial Year (CIMB Capital Markets, 2014). In an attempt for Diva to move forward, Diva stores which were closing were changed to Lovisa in attempt to fix the situation. The brand name of Diva was not used as their reputation was not improved, therefore allowing competing jewelers and sister companies to develop and provide stock to suit the needs of the customers.

‘SWOT’ analysis

The ‘SWOT’ analysis originated by Albert S. Humphrey in the 1960s helps to outline and consider the strengths, weaknesses, opportunities and crisis that a business may face. It is useful technique that can provide the advantages of a business such as, Diva, to establish a strategy to effectively identify competitive advantages and eliminate the potential crisis of the Business. Diva management can implement ‘SWOT’ analysis to essentially overlook their weaknesses such as, the increased likelihood of staff turnover and compare it to their business strengths. These strengths can include them prioritising the drive, motivation and safety (intrinsic needs) of employees to change the organisational behaviour factors. Diva had the opportunity to respond to the advancement in technology for their customers and implement and manage their social media platforms such as, Instagram, Facebook and Twitter being used. They should be quick and supportive in their responses to their customers to keep their loyal customers and increase their brand awareness. The employers who have no abided by the Fair Work Act in their practice to provide a safe work environment, provides a threat to Diva where there is a decreased job satisfaction and financial needs of the employees being met at their workplace.

Diva effectively implementing change

Suggested strategies, models, concepts and theories for Diva to effectively implement change includes Maslow’s Hierarchy of Needs and changing the management leadership strategies used. Maslow’s Hierarchy of Needs was established in 1943 by Abraham Maslow who developed on the idea that employees needed particular individual goals to be met in order to have job satisfaction and motivation. The hierarchical structure offers the opportunity for communication to occur between the employees and managers where the staff are able to identify which of needs have or have not been effectively met by the organisation. Diva can apply this theory by encouraging employees to converse with the managers to identify their basic work needs and create goals to achieve the needs that have not been met. This collaborative work occurring between the manager and employee will benefit the business in providing a clear indication of the needs of employees and guiding employees to work towards achieving individualised goals that acknowledge business objectives. Locke and Latham’s Five goal-setting principle can also be applied to Diva. This theory established in the late 1960s to understand motivation and goal setting entails a One-size fits all strategy whereby the theory is a less time-consuming approach to management change and motivation that works to be applied to all employees in the workplace. Employees of Diva would have the opportunity to make clear goals in line with the organisation’s objectives and have their individual needs catered for. The employees of managerial positions in the business would be provided with the opportunity to provide feedback and performance to the staff proving essential in the business growth and improving communications between employees and the employers. A sense of teamwork can be achieved through using the goal-setting principles as the same goal/s can be applied to each employee. However successful organisations occur where a sense of mission is achieved, the employees and managers need to agree upon and commit to; having a strong Corporate Culture, shared values, Beliefs and organisation’s sense of mission. By having this commitment, the organisation may create a source of competitive advantage over their rivals. The managers in Diva should therefore provide emphasis on implementing strategies and approaches to achieve other workplace goals and their mission as working on the corporate culture is only the start of achieving a striving organisation. Diva managers must seek to understand the culture then provide answers to important questions concerning any external assumptions made about the organisation and internal integration. However, they may be challenged if the needs of the employees cannot meet the needs of a changing environment. If an employee in a managerial position wants to implement a new change program within the organisation they will be opposed with a different set of shared values and assumptions that may resist the change. A manager should not welcome the change if they are defiant to learning new ways. Organisations today experiencing barriers to ‘step forward and operate with strong, positive and ethical cultures’. What is needed in today’s complicated times is for more organisations to step forward and operate with strong, positive and ethical cultures. However, instilling ethical behaviour is not just a manager’s responsibility; the behaviour of employees can resonate throughout the organisation to set an ethical culture organisation‐wide. It is therefore essential for the employees of Diva to take individual responsibility and understand the influence of their behaviour to set an effective and sustainable ethical culture through the whole organisation.

Drawing conclusions

The organisational failure of Diva International Proprietary Limited (Pty Ltd) could have been prevented by the business employees in managerial positions implementing strategic responses to quickly respond to the needs and role of individuals and groups. Organisational factors also contributing to the failure of Diva could have been identified and rectified by implementing change management. Change management would provide employees of each store with the opportunity to be considered in redesigning the mission, vision and business objectives of Diva. The employees of Diva would be able to collaboratively work with managers to create individualised goals that respond to change. Diva’s response to their business failure involved the rebranding of 88 stores into stores under the women’s fashion and accessory store, Lovisa. Employees and customers complaints and reviews expressed were left unresolved and disregarded by Diva as the Diva name was no longer effectively active under the businesses operating in Australia. Diva could have implemented many strategies and theories such as, Maslow’s Hierarchy of Needs, Locke and Latham’s Five goal-setting principle and ‘SWOT’ Analysis. These strategies and theories prove integral in the effective implementation of change and continual development of their niche in the market and obtain sustainability towards future growth of the business in the industry. However, for change to occur employees need to be favorable of the business and the new roles that their position will entail such as, working as a Colette employee. The managers of Diva would need to have managerial skills such as, use of communication to deliver and encourage the change as well as ensure that they comply with Australia’s ethical practices and procedures outlined in the Fair Work Act. This will remove any decisions and discrimination being made by judgement and individual values within the organisation.

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