Chapter 15 - Read the Problem-solving application case, pages 633-634 of the text, Barnes & Noble Faces Its Last Chapter, and answer the three Discussion Questions use headings that correspond to the questions.

Directions:

Answer these Discussion Questions:

Define the problem: Remember that the problem is the gap between the desired and the current state. State the problem as the gap and be sure to consider problems all 3 levels, and if one is more important than other levels, then focus on it for parts 2 & 3.

Identify the causes of the problem determine the cause and explain why?

Make your recommendation for solving the problem: a recommendation and implementation plan.

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Please add reference

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Please answer all of the questions

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Please answer all the questions

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PROBLEM-SOLVING APPLICATION CASE Barnes & Noble Faces Its Last Chapter Barnes & Noble is the largest bookstore chain in the come into a Barnes and Noble like they would a niche United States having sold more than 6.7 billion books independent bookstore. The national bookseller since going public in 1993. Leonard Riggio, the book- doesn't have a unique experience to offer; on the con- seller's chairman, started with a single Manhattan loca- trary, it seems to offer too much of everything. "Else- tion and now operates 627 stores in all 50 states. The where in the store, alongside bestsellers, signed New York-based company has approximately 26,000 copies and books . . . are more examples of mismatched employees. 126 merchandise: journals, toys, candles and diffuser sets, Barnes & Noble has fallen on hard times. The book- tea and chocolate selections," says Cheng. 132 seller has experienced declining revenues, resulting Business Insider compared New York's Barnes & in increased debt from $84 million in 2017 to Noble with Amazon stores and found Barnes & Noble $178 million in 2018. ? The company also was forced to be "like a dollar store" and that "the grab-bag inven- to lay off its entire full-time staff of 1,800 employees in tory strategy makes the store seem confused and des- February 2018 to alleviate some of the mounting perate." The Amazon store, on the other hand, inancial pressure. 28 These financial pressures have resembled "the future of chain retail."133 In the end, taken a toll on the bookseller's stock, which plunged Barnes & Noble doesn't seem to know what it stands more than 60 percent between 2015 and 2018.129 for, and what it wants to be, according to Forbes, 134 Let's explore the causes of Barnes & Noble's downfall. WHO'S ATOP THE HIERARCHY? THE RETAIL BOOKSTORE INDUSTRY HAS EVOLVED It's difficult to come up with an effective strategy when you don't have a leader. Chairman Leonard Riggio Barnes & Noble was once vilified as a behemoth that stepped down as CEO of Barnes & Noble in 2002. The drove local bookstores out of business. The booksell- company had stable leadership for another decade, ing giant grew at the turn of the century with the num- first led by Stephen Riggio (Leonard's younger brother) ber of independent bookstores falling 43 percent from and then by William Lynch. Lynch is credited with 1995 to 2009, according to the American Booksellers launching the company's electronic bookstore and Association. 130 This growth was fueled by the introducing its electronic book reader, the Nook. 135 increased development of malls and shopping centers. Lynch stepped down in 2013, launching a turbulent The company's fortunes changed with two critical, time for company leadership with five chief executives yet conflicting, events. First, the success of online eaving between 2013 and 2018. 136 retailers, such as Amazon, has led to the decline of Some of the turnover atop the organization can be storefront traffic, which Barnes & Noble relies on as a attributed to Chairman Riggio. Riggio is notorious for primary revenue source. Second, independent book- micromanaging his CEOs. An analyst at Gabelli & Com- stores are making a comeback, aided by increased pany told The New York Times that, "Anyone who joins customer interest in localization and a curated expe there knows that the chairman is very hands on."137 rience. In fact, the number of independent store loca- For example, Riggio fired former-CEO Ronald Boire tions has increased 67 percent between 2009 and less than one year into Boire's tenure. The chairman 2018.131 simply stated that Boire "was not a good fit for the organization" and declined to provide additional com- STAGNATION AND CONFUSION mentary after letting him go in 2016. 138 Riggio then hired Demos Parneros as chief executive. Parneros AT BARNES AND NOBLE was fired for misconduct a year later and is now suing So why is Barnes & Noble failing in an industry that is Barnes & Noble for wrongful termination. 139 growing in the face of Amazon? Its flagship Union The organization's skyrocketing CEO turnover rate Square location in New York City provides a clue. "The has caught the attention of external stakeholders. For CD and DVD sections, which still occupy a sizable example, book-publishing executives expressed con- chunk of store space, are often deserted and cerns to Riggio about continuing management instabil- ity at the retail giant and the direction of the business, unmanned," according to Andria Cheng, a Forbes con- according to The Wall Street Journal. Publishers argue tributor. Customers don't seem to have a reason to Organizational Design, Effectiveness, and Innovation CHAPTER 15 633that Barnes & Noble needs to have a strategy to drive performance. This is especially important when Amazon is competing with it digitally and in stores, and small bookstores are nipping at its heels. "I expressed frustration that if they had a plan, we didn't know it," a publishing executive who met with Riggio told the Journal. 140 Riggio disputes claims that Barnes & Noble is mired in a leadership crisis. "I have a big stake in the busi- ness, I founded it and I've been here forever, so I think there's a lot of stability that comes with that . . . If we're without a leader, I'm it," Riggio told The New York Times. 141 The chairman and interim CEO firmly believes he is the innovative leader the company cur- rently needs. "We have a lot of work that needs to get done, and I think I bring the necessary leadership," he told Publishers Weekly. Riggio's strategy is for Barnes & Noble to become an innovative storefront bookstore. The new store in Columbia, Maryland, is a prime example. It features a contemporary design, USB and electricity ports in the cafe, and "book theaters," which offer a 360-degree in- the-round browsing experience. Riggio believes these types of retail outlets are the way of the future. He also believes that the company will succeed with better merchandising and a coherent pricing strategy. 142 Riggio doesn't appreciate having his strategy ques- tioned, which is evident by the number of CEOs he's lost in a short amount of time. Only time will tell if Reggio's vision and strategy will fix what ails Barnes & Noble