Tn Harlequin Luxaire Case Study

TN Harlequin Luxaire Limited (TNHL) is the largest furniture manufacturing and retailing company in Zimbabwe, employing over 1,000 workers. It operates a ‘direct-to-the-consumer’ business model and its value proposition is high-quality durable furniture. TNHL retails its products exclusively through 17 stores down from 32 stores in 2012. Their product range spans from exquisitely handcrafted home, office and custom-made furniture.

In 2009 the company sketched out a strategy to achieve total integration. Their drive was to own the value chain and thus creating an ability to pick their point of profit, have continuous and reliable raw material supply and a secure distribution channel. However, its strategies were set back in 2012 when the economy

The worsening liquidity crisis, policy inconsistency and inadequate infrastructure continue to exert pressure on business operations. TNHL’s very existence is threatened by the adverse environment, which has had a massive impact on TNHL’s business model; that is, the provision of ‘capital’ goods on long term credit.

1.3 Problem Statement

The adverse trading environment triggered the restructuring of the business and the need to implement new strategies aimed at creating lean manufacturing processes that supported prevailing market demand. However, what exacerbated reputational decline was the lack of effective communication on the part of management to ensure stakeholder buy-in and the reaffirmation of values and standards which lie at the heart of reputational risk. This lack of clarity from a stakeholder’s perspective created distrust and conflict between management and staff. TNH’s poor management of stakeholder perceptions negatively impacted on reputational capital and ultimately on its financial

Becker & Connor (1986) claim that the importance of values lies in their ability to determine group behaviour. Shared internal stakeholder value proposition exhibited through attitudes and behaviours are of paramount importance because they create positive attitudes towards an organisation. Peters & Waterman, (1982) postulate that companies are at their best when values and strategy are aligned.

As stated above, TNH recently restructured its business; however, employees were not actively involved in the process hence adversely impacted strategy implementation. TNH underwent a phase where the espoused values where not lived out (Values are fully listed in Annexure A), however, the key values that directly impacted reputation are summarised below:

• Frank, but humble: being open and giving informed opinions whilst respecting the value of the contribution of others;

• Honest, but shrewd: being truthful, honest and forthright with one another, customers, communities, suppliers and shareholders;

• Efficient: delivering what we have