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MASTERPIECE2020

How Mattel’s Barbie lost the war against the Bratz doll

How Mattel’s Barbie lost the war against the Bratz doll

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How Mattel’s Barbie lost the war against the Bratz doll

Question 1

The managers of Mattel delayed in making critical decisions about the core product Barbie until it was too late. It was only after MGA Entertainment introduced Bratz that the managers of Mattel realized they needed to act swiftly to recapture the market position that Barbie had enjoyed for over four decades. According to Jones (2013), the process of decision-making and organizational learning is guided by the level of cognitive structures of managers. The thought processes of managers determine the effectiveness of organizational learning and being able to make wise decisions that help the organization to grow. Lack of sound cognitive processes at the managerial level creates room for cognitive errors or biases that may prove costly to the organization.

In the case of Mattel, the manager had a severe cognitive error in the form of an illusion of control. Jones (2013) describes the illusion of control as an overestimation of the level of control. Therefore, in the managers of Mattel believed that since they had dominated the doll industry for several decades, they would continue to do so. For a long time, Barbie did not have any direct competitor until the emergence of Bratz. McShane, Nirenburg and Jarrell (2013) note that many business enterprises fail to make critical decisions that will encourage innovation because of complacency. The feeling that all is okay with the market and nothing needs to be changed eventually becomes catastrophic when competitors lead the way to change.

Another cognitive error that might have contributed to the slow decision-making process is frequency and representativeness.  The two related cognitive biases contributed significantly to the slow decision making at Mattel. Jones (2013) explains that frequency as a cognitive error makes managers assume that a bad situation is more severe that is actually is. Therefore, when MGA introduced Bratz, the managers of Mattel made a drastic decision to change Barbie in a manner that affected the perception of the customers. The managers even recommended the replacement of Barbie boyfriend Ken with Blaine. The decision was an overreaction to the situation that forced them to go back to the previous designs. At the same time, representativeness as cognitive error makes managers make decisions based on the wrong sample. Mattel for a long time had the wrong impression from its target customers. The managers believed that the consumers behaved in the same way as they did several years ago, and thus no change was necessary on Barbie.

Question 2

Organizational culture is directly linked to the level of innovation in the organization. Lam (2011) believes that it is the responsibility of an organization’s leadership to ensure that the culture encourages innovation. Without the support from the leadership, employees find it difficult to pursue innovation in the daily operations. Therefore, there are some factors related to culture and innovation that might have contributed positively to Mattel. The fast factor is on research and development. An Organization that lays emphasis on research and development is more likely to develop an innovative culture. Despite the fact that Barbie is not a complicated product, more research on its structure could have helped the company embark on a continuous improvement of the product.

Another factor that could have influenced Mattel’s setting positively is good talent management. From the case study, it is clear that Mattel suffered losses because some of its employees went to work for MGA Entertainment and implemented some of their innovations.  Tao and Liu (2012) assert that developing a culture of rewarding talents and innovation is essential for an organization that needs to grow. When talented employees get good rewards from the company and have the autonomy to implement their innovation, they help the company become innovative with its products and services. The employees who went to work for the rival companies most likely did so because they were not rewarded well at Mattel, and their innovative designs did not receive any consideration from the management. The management has the responsibility to create a rewarding environment that would encourage the talented employees to put more effort and stick with the organization. The people working in the organization are the most important in creating a culture that promotes innovation.

The other factor is the organizational structure of the company. The structure of the company is vital in the determination of organizational culture and level of innovation. Jones (2013) argues that structural factors such as the size of the management hierarchy, the horizontal and vertical orientation, as well as the level of bureaucracy can influence the level of innovation significantly. Mattel needs to create a flexible and lean structure that removes all the layers of bureaucracy. With bureaucracy, decision-making becomes slow and frustrating. Most of the talented and liberal minded employees will feel dissatisfied working in such an environment. Tao and Liu (2012) propose strategic restructuring for organizations that have been operating for a long time to accommodate the changing environment.

References

Jones, G. (2013). Organizational theory, design, and change (7th ed). Upper Saddle River, NJ: Pearson Prentice Hall

 Innovative Organizations: Structure, Learning, and Adaptation. Paper presented at the DIME Final Conference, 6-8 April 2011, Maastricht.

McShane, M., Nirenburg, S., & Jarrell, B. (2013). Modeling decision-making biases. Biologically Inspired Cognitive Architectures3, 39-50. doi:10.1016/j.bica.2012.09.001

Tao, C., & Liu, Y. (2012). Research on Influence of Manager’s Innovation Preference on Innovation-Decision Making. Technology And Investment03(03), 187-192. doi:10.4236/ti.2012.33026