Formal report on the current management challenges faced by Stone Stylists Ltd and the
suggested management proposals and recommendations.
This report has been prepared by (Name) and is intended for the management of Stone
Stylists Ltd:
Introduction:
Stone Stylists Ltd is a chain of five hair salons and barbershops across Sheffield and has been
owned by Lisa Stone for more than 30 years serving both female and male clients. Recently, the
management of the business changed. Lisa Stone, who is a charismatic leader, stepped down,
and appointed her son, James Stone, as the Operations Manager to manage the day-to-day
operations. However, James has no experience in the hairdressing industry, and is instead
bringing his knowledge and expertise from his time as a Store Manager for a large UK food
retailer. This inexperience led to several poor decisions and outcomes. This report highlights the
poor decisions and analyses the current management challenges faced by Stone Stylists Ltd,
along with the proposals and recommendations to address them, in order to achieve the
business goals.
Business Goals:
Stone Stylists Ltd currently has three business goals:
1. To be ranked number 1 hair salons and barbershops in Sheffield
2. To achieve a 10% net profit margin
3. To improve client retention to 90%
The analysis of current management challenges, proposals and recommendations will be with
these business goals in mind and the impact on them. This will provide the management of
Stone Stylists Ltd with an understanding of how their current situation and management
principles is negatively impacting the business goals, and how the suggested proposals and
recommendations can aid in the achievement of them.
Current management challenges faced by Stone Stylists Ltd:
1. Unsuitable management style
The first challenge faced by the management of Stone Stylists Ltd is an unsuitable management
style. Previously, when Lisa Stone ran the day-to-day operations, she used a charismatic
leadership style whereby she knew all of her employees well and put great effort into developing
them as individuals and to be the best hairdressers and barbers that they can be. The main
advantage of the charismatic leadership style is that employees feel more connected with their
manager, helping to create a better working environment and motivate employees to provide the
best customer experience possible, something that is crucial to service based industries such as
hairdressing and barbering.
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, However, this changed when James Stone was appointed as Operations Manager. James takes
a transactional approach to management, whereby good performance is rewarded and poor
performance is punished. This is seen when he introduced daily sales targets and weekly prizes
for employees with the best performances. An issue with the transactional management style is
that it can imbalance the action centered leadership model (ACL) that was developed by John
Adair. The ACL model states that there are three responsibilities of managers, task needs,
individual needs and team needs. James’ transactional management style means that he is too
focused on task needs and overlooks the needs of the individual/team as he introduced what
some employees reported as “hard sales techniques” in order to better achieve the task (upsell
more products) which made some experienced employees uncomfortable and increased
workplace stress.
This could be the driver behind the rising absenteeism, the rate at which employees avoid work.
Absenteeism has risen from 4% in 2022, to 16% in 2024, a fourfold increase. As James’
transactional approach meant he implemented sales targets, noticeboards with weekly prizes
and sales scripts, employees became increasingly stressed and uncomfortable potentially
causing them to avoid work. This negatively impacts the net profit margin business goal, as if
employees are avoiding work, they are not serving clients and sales revenue decreases.
2. Poor motivation
The second challenge that the management of Stone Stylists Ltd faces is poor motivation. Lisa
Stone used non-financial motivators to motivate employees, such as her efforts to develop her
employees as individuals to be the best hairdressers or barbers they can be. Her efforts to
develop employees is also an example of a motivating factor in Herzerg’s Two Factor Theory
and it is suggested that employees are at the self-actualisation tier of Maslow’s Hierarchy of
Needs as employees are fully supportive of the business goals, and likely challenged
themselves to help achieve them.
However, under James the only motivator employed is the weekly prizes for the best performing
employees, an example of a financial motivator and a hygiene factor in Herzberg’s Two Factor
Theory. As James’ transactional management style means that he is too focused on task needs
and overlooks the needs of the individual and team needs, E Mayo’s Human Relations argues
that this would lead to low workforce motivation. This is because according to E Mayo,
employees are not just concerned with money but could be better motivated by having their
social needs met whilst at work and as James overlooks individual/team needs, social needs
such as individual development or team building opportunities are overlooked.
Overlooking social needs and lack of motivators currently in place at Stone Stylists Ltd is likely
the factor behind the falling employee satisfaction, which has fallen by 28% across the last two
years. Poor motivation may also be the driver behind the rising labour turnover which can be
calculated using the average number of employees over the period, divided by the number of
leavers over the period. Labour turnover was just 1.3% in 2022 to 2023, and rose to 12% in
2023 to 2024. As there are few motivators in place at Stone Stylists Ltd, increasingly more
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