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Reference four sources with paper in APA format, of at least 5 pages (excluding title and references pages).

CASE STUDY

Creative Colors (a fictitious company) sells art supplies through three retail stores in the State of Washington as well as online. In addition, the company offers classes in painting, sculpting, graphic design, and ceramics at its flagship store in Seattle. Over the past two years, the company has suffered from shrinking sales and declining revenues in retail stores; at the same time, inventory costs have been growing. Enrollment in arts classes has remained steady and strong. However, the classes are operated on a break-even basis, so their profitability depends in large part on the volume of supplies that students purchase from the retail or online operation after participating in a class. Online sales continue to grow 2% to 3% each year. The owner of Creative Colors must implement cost savings measures. She has decided to cut 25% of the company’s managerial positions and reorganize the remaining positions so that the organization still exercises adequate supervision and control over its employees. This will allow Creative Colors to refocus its efforts on expanding online sales while rebuilding its retail sales operation. The owner has hired you to give her advice about how to proceed.

Describe how you would go about analyzing the organizational hierarchy to make recommendations about which managerial positions should be cut. What organizational design principles will you consider in your analysis? How will you balance the need for the company to downsize with the understanding that many employee positions require specialized knowledge? How will you ensure that the appropriate levels of authority and control are maintained and that adequate levels of employee supervision are ensured? What ethical considerations will you and the owner need to keep in mind when making decisions about which managers will lose their jobs? Provide a rationale for your decision-making process and your recommendations to the owner of Creative Colors.