Bella’s: A Case Study in Organizational Behavior

The primary subject matter of this case involves the job satisfaction and employee engagement
of a company’s workforce. The case depicts a new general manager’s concern that the constructs
listed above have reached such low levels that critical organizational outcomes are being
negatively impacted. The case also involves a career planning decision made by the principal
character in the case. It is designed to be taught in one class hour and is expected to take
approximately three hours of student preparation time.

Students are provided with a management scenario describing a general manager’s concern that
her workers’ levels of job satisfaction and employee engagement have deteriorated

organizational and individual outcomes is provided. Students are asked to analyze the data, draw
conclusions about the results, and offer and support recommendations to the general manager
regarding ways to improve the satisfaction and engagement of the company’s workforce.
Students are also provided information regarding the principal character’s decision to accept the
General Manager’s position in the firm. Students are asked to evaluate this decision.

Keywords: Job satisfaction, Employee engagement, Decision making

Note: This is a fictitious case developed for educational use. All statements, names, numbers,
dates, etc. used herein were created for the purposes of this case and should not be construed
as factual.

CASE DESCRIPTION/SYNOPSIS

The primary subject matter of this case involves the job satisfaction and employee engagement
of a company’s workforce. The case depicts a new general manager’s concern that the constructs
listed above have reached such low levels that critical organizational outcomes are being
negatively impacted. The case also involves a career planning decision made by the principal
character in the case. It is designed to be taught in one class hour and is expected to take
approximately three hours of student preparation time.

Students are provided with a management scenario describing a general manager’s concern that
her workers’ levels of job satisfaction and employee engagement have deteriorated to dangerous
levels. Students are provided with survey instruments used to measure each of the constructs
plus results from the employee surveys. In addition, information regarding organizational and
individual outcomes is provided. Students are asked to analyze the data, draw conclusions about
the results, and offer and support recommendations to the general manager regarding ways to
improve the satisfaction and engagement of the company’s workforce. Students are also provided
information regarding the principal character’s decision to accept the General Manager’s position
in the firm. Students are asked to evaluate this decision.
THE COMPANY

Bella's is a full service day spa and hair salon featuring a wide variety of spa treatments including
full body massages, body scrubs and wraps, European facials, specialty manicures and
pedicures, skin treatments, waxing, and complete varieties of cuts, conditioning treatments and
chemical services for the hair. Exclusive lines of hair and body products are also available. Bella’s
also features a retail department which specializes in unique custom jewelry. Bella’s flagship store
and headquarters are in a city with a population of approximately 250,000 people in the southern
United States. It also has spas/salons in four other smaller cities (all with populations over 40,000)
in the same state. Last year, Bella averaged approximately 25 employees per store; annual sales
last year were approximately $3,000,000, a decrease of 12% from the previous year. The
company lost money last year for the first time since its initial year of operation. The management
of Bella’s considers the firm to be a one-of-a-kind establishment serving a wide segment of the
population. The success and growth of Bella’s has far exceeded all Illa Fitzgerald’s (the founder
and owner of the business) original expectations.

COMPANY HISTORY

The company was founded twelve years ago by Illa Fitzgerald, a former beautician/massage
therapist who had worked in the salon industry since finishing cosmetology school at age 21. She
used an SBA loan, investment dollars from five family members, and her personal life savings to
fulfill her dream—owning her own spa/salon. Her vision was to create a unique company that
offered a complete array of products and services aimed at creating and maintaining healthy
minds, bodies, and spirits. Bella’s is now more than a decade old, and Illa takes great pride in
knowing that her company has come very close to completely fulfilling her vision.

Illa fully recognized from the very beginning that her business/managerial experience was very
limited. She was also fully aware that managing the day to day operations of her business had
very limited appeal to her anyway. Therefore, her first critical decision was made three months
before the salon opened—the decision to hire Lynne Gibson as general manager of Bella’ s.

Lynne Gibson had served as the general manager of Bella’s since its inception. Prior to taking
this position, Lynne had worked at a major women’s clothing retailer, initially as a management
trainee and finally as a regional manager. Before Bella’s, Lynne and Illa, while not close friends,
were certainly acquaintances who had gotten to know each other professionally. Illa had shared
her dream with Lynne and had often told her “you know when I do this thing, I want you to come
run it for me.” Lynne never really gave it much thought, but when Illa made a formal offer, Lynne
decided it would be a good move, professionally and personally. She had been very successful
in retailing--but the long hours plus the weekend demands had begun to take a toll on her personal
life. A single mother of two, Lynne decided that this change would be a new challenge, and it
would also enable her to be more successful in balancing family and career. From day one, Lynne
basically was involved in or actually made all the managerial decisions at Bella’s. Though Illa was
certainly the lead player in strategic decisions, Lynne was the ultimate decision maker for anything
operational. Bella’s began with six employees: Illa, Lynne, three hair stylists, and one massage
therapist. All were friends or acquaintances of the owner. Very little recruiting took place in the
initial hires beyond Illa convincing each to come be a part of her new business. A salary was
offered with a promise of “as we grow and become more and more successful, I’ll make sure
you’re rewarded for your contribution.”

A year ago, Lynn Gibson decided to leave Bella’s to pursue her Master’s degree in education. As
one who was not only resistant to and often paralyzed by change, this greatly troubled Illa—so
she managed to convince Lynn to remain as a consultant to the company while working on her
degree. Lynn’s new role was to offer input and advice on any and all issues of Illa’s choosing.
Prior to this point, the basic structure of Bella’s was: Lynne was the general manager of Bella’s
Incorporated; she also served as the store manager of its flagship location. Within her store, a
Retail Manager and a Service Manger reported directly to Lynne. Additionally, the Store Managers
at each of the other four Bella locations reported directly to Lynne. Within each store, individual
store managers were the only employees serving in a supervisory position with each being
responsible for all daily operational issues of his/her salon. All other responsibilities/decisions for
individual locations are Lynne’s. This includes all purchasing, marketing, financial, and human
resource decisions. Individual store managers did have the opportunity to offer informal input into
hiring decisions for his/her store. The salon managers’ salaries averaged approximately $32,000
annually. Three had college degrees, and they averaged four years experience. Each began as
a part-time sales clerk/receptionist either at Bella’s or at another salon. Bella’s offered a benefits
package that was fairly standard for an organization of its size. This included health insurance (of
which the employees shared in the cost of the premiums with Illa’s and Lynne’s being paid totally
by the firm) and retirement (in which Bella’s made modest contributions).

THE CURRENT SITUATION

Kris Jenkins started her job as the new general manager of Bella’s a month ago today. Her career
began as a hairdresser after finishing cosmetology school. Ten years later, Kris had completed
her Business degree and was the store manager of a national hair salon that was located in a
mall in a midsize southern city. Her ultimate goal was to own her own salon—but she did not feel
that she was yet prepared either financially or from an experience standpoint. Though she had
learned many valuable lessons—particularly in dealing with employees--while managing the firm
in the mall, she recognized that her experience with executive decision making was very limited.
Therefore she was hoping to make a career move that would enable her to have direct input
regarding all top management decisions of a salon. That was the primary reason that she decided
to take the General Manager’s position at Bella’s. Plus, her career goals were almost identical to
those of Bella’s owner 12 years ago. Illa had achieved exactly what Kris aspired to achieve. Also,
her background was essentially the same as Illa’s. Kris had discovered a new role model. What
could be better? The opportunity looked ideal.

As Kris sat at her desk this morning, things didn’t appear nearly as ideal. She kept replaying three
events in her mind:
 1. After the offer but before accepting the position, Kris had spent a weekend with the
previous general manager of ten years, Lynne Gibson (who now served as a consultant
to the organization), discussing a wide array of topics regarding the company. Bella’s
numbers had deteriorated dramatically in the past year. Profits were down; absenteeism
was up; turnover, while not dramatic, was higher than it had been in the past five years.
And while no formal performance appraisals had been done in the past year, Lynne
provided her assessment of the performance of all Bella’s key people. It was clear that
Lynne felt each was performing significantly below their capabilities, significantly below
previous levels of performance. Following these discussions, a number of things stood out
to Kris. First of all, Lynne was very reluctant to criticize Bella’s employees. But between
promises of secrecy and reading between the lines, it became quite evident that Lynne
had serious concerns—and it seemed to Kris that Lynne’s biggest fear centered around
Illa. As their discussions continued, it became quite clear that Lynne doubted Illa’s ability
to provide Kris the autonomy needed to effectively manage Bella’s. This appeared to stem
primarily from two things: 1. Illa’s unexpected interference with only limited information
about the issues or problems, and 2. Illa’s tendency to regularly monopolize the manager’s
time on trivial or personal matters thus keeping the manager from focusing on the needs
of the salon.
2. After the weekend with Lynne—but again before accepting the position--Kris spent three
days at the Bella’s. She had stayed at the spa from opening to closing to visit with all the
employees. While the conversations had been pleasant, it seemed pretty apparent that
many, if not all, seemed reluctant to be totally honest. Though none had directly denigrated
the company or the owner, body language and incomplete or evasive answers had
concerned Kris at the time. She couldn’t help but worry that the majority of Bella’s
employees simply did not feel good about their jobs or the company.
3. Though she had spent a great deal of time with Illa, the afternoon that she formally
accepted the job was critical in Kris’s ultimate decision to accept the position. Due to
numerous concerns that became evident while spending time with Lynne and the
employees, Kris was leaning heavily toward declining the job offer. However, after
respectfully discussing these concerns with Illa, Kris began to change her mind. Illa
addressed each issue giving the impression that she recognized the problem and was
willing do whatever it took to correct and improve both company and employee
performance—including stepping away and giving Kris autonomy to make all operational
decisions at Bella’s. Illa was very persuasive, and Kris decided to reconsider her decision
to decline the position. At the end of the day, she told Illa she would take the position. Kris
was excited—she knew this would be a wonderful career move—but also worried. Could
she really turn Bella’s around? And would she have the freedom to do so?

“Enough reflection,” Kris said out loud. “It’s time to get busy.” She had in front of her the results
of the employee survey she had conducted over the past two weeks. The survey was an attempt
to measure the level of job satisfaction and employee engagement of her employees. It was
similar to the survey that had been used in her previous job. Kris had been involved in
implementing changes at her previous salon based on results of these surveys— changes that
had been quite effective in terms of improving outcomes. She was optimistic that some insights
in these two areas might lead to the same thing occurring at Bella’s. (See Appendix One,
Employee Survey Instrument; See Appendix Two, Employee Survey Results). On the promise of
anonymity, no names were attached to any surveys; however, the aggregate outcomes, while
there were some positives, were quite troubling. What did they all mean? What messages were
being sent? And, most importantly given this information, what should she do now?

Analyze the case and follow the format below to express your answers.

I. Executive Summary
II. Introduction
III. Problems Encountered
a. Primary Problem
b. Secondary Problem
IV. Alternative Courses of Actions
a. 1st Alternative Courses of Action
b. 2nd Alternative Courses of Action
c. 3rd Alternative Courses of Action
V. Implementation of Alternative Courses of Action
VI. Summary and Conclusions

Medlin, B. (2017). Bella’s: A case study in organizational behavior. Journal of Business