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Samson Media is a publisher of several upmarket fashion magazines. It has strong links with several high-profile fashion houses whose products are featured in magazines and provide a significant source of advertising revenue. Readers of the magazines are predominantly 35 – 54-year-old women.
Readership has fallen over the last two years. This is due for the most part to due to competition from a range of other fashion magazines and consumers switching to digital media. Due to the decline in readership, profits have also fallen by 20% and there has also been a decrease in the share price.
Therefore, the new CEO, Amir Johnson, has been appointed. Amir was the former Marketing Director for a well-known successful media business that included a national newspaper, magazines, and a subscription television channel. Those publications are focused mainly on sports and celebrity gossip. It can undercut its competitors with low prices, enabled by a ruthless approach to achieving high levels of efficiency.
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Amir and his team of Managers have developed a Strategic Plan that includes the following objectives.
Increase return on capital to 8% within 2 years.
Enact a transformational change in the company that will convert all magazines to a digital format.
Close the printing and distribution site.
Achieve cost efficiencies by relocating the head office to a smaller office.
Restructure head office staff by moving to a smaller core of permanent staff and more contract staff.
It is intended that the new digital magazines will have the following features:
Focus on health and beauty, fashion, and celebrity gossip.
Some free content but full access is available only on a subscription basis.
Additional features available to subscribers such as video clips, podcasts, and discussion
Current staff information is as follows. All staff are full-time permanent staff and their total salary costs per annum to Samson Media are also included below.
General Manager: $200,000
Finance Manager: $150,000
Marketing Manager: $150,000
Customer service manager: $100,000
Customer service assistant: $240,000 (total salary costs for each journalist is $80,000) (2) – $100,000 (total salary costs for each assistant is $50,000)
Online Marketing Coordinator: $120,000
Human Resources Manager: $110,000
Editor: $85,000
Art Editor: $80,000
Journalists (3): $270,000 (total salary costs for each journalist is $90,000)
Graphic designers (2): $240,000 (total salary costs for each journalist is $80,000)
Editing Assistant (2): $120,000 (total salary costs for each assistance is $60,000)
Photographer (2): $150,000 (total salary costs for each assistance is $75,000)
Senior Designer (2): $260,000 (total salary costs for each journalist is $120,000)
Senior Production Controller: $95,000
Printing and distribution (20 staff): Total $1,000, 000
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The cost of running the printing and distribution site, plus staff costs is currently approximately $1,500,000 per annum. It has been identified that, given the change to the new medium of publication, it will be an immediate priority to shut down the site and make all the staff redundant.
The current office rent is $500,000 per annum.
Employment contracts are in place for all staff members employed in Head Office. Printing and distribution workers are employed under an award. The CEO has indicated that he is interested in moving towards an enterprise agreement arrangement for all remaining staff and would like to have this reviewed as part of the change management process.
Current human resources policies and procedures include a recruitment, selection, and induction policy and procedure and a termination policy and procedure. There is an ad-hoc performance review process in place which occurs as issues arise. There are no formal processes for training needs analysis or professional development.
As General Manager, you have been asked to lead the development and implementation of the change management plan, with the first step being to consult with an organizational change expert to discuss issues and strategies for change management for the company.
It is anticipated that, while there will be some cost savings in making the change, there will also be costs involved including:
Redundancies: anticipated cost is $300,000
Upskilling staff: $100,000
Consulting with experts: $100,000
Communication throughout change with key stakeholders: $100,000
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