Required information Yahoo CEO Marissa Mayer Is Under Pressu

Required information Yahoo! CEO Marissa Mayer Is Under Pressure to Make Big Changes Apply the knowledge of Management presented in this chapter to the following case. Applying this knowledge should enable you to recommend realistic and effective solutions to the challenges facing Yahoo! and its CEO Marissa Mayer Read the case below and answer the questions on the right Marissa Mayer, former Vice President of Google Product Search, left the company in 2012 to become the CEO of Yahoo At that time, the stock sold for $15.74. It sold for $29.77 in January 2016, reaching a high of $52.28 in 2014. Interestingly, investors are not happy with this rate of growth. Some feel that the company\'s strategies are lacking and that new leadership is needed. Hedge fund investor Starboard Value LP demanded that the board fire Mayer 153 Mayer was hired to help turnaround the company\'s floundering business model. She immediately put in place strategies to grow via acquisitions. For example, Yahoo! paid $1.1 billion for Tumblr, a micro blogging platform and social networking website. This acquisition did not produce the expected growth in revenue. A letter from Canyon Capital Advisors to Yahoo!\'s board of directors stated that Yahoo! \"has spent more than $3 billion on acquisitions, which, based on the company\'s stock price, have been getting \'absolutely no (or negative) value\' from Wall Street.\" 154 One of the poor decisions that has plagued Yahool\'s financial performance was its reluctance to transition its offerings to mobile devices. Another involved the companv\'s investment in Livetext. This app allows users to chat with friends bv

Solution

Answer - Leading

Explanation - The P-O-L-C framework refers to the four principal management functions i.e. Planning, Organising, Leading and Controlling. In Yahoo’s case, both the investors and the employees seemed to be unhappy and unsatisfied with the leadership of Marissa Mayer. From the time she joined the company in 2012 as the CEO of Yahoo! she could not produce the kind of growth the investors were expecting and even after 4 years of her joining the organisation, the Yahoo! stock sold for only $29.77 in January 2016. The investors felt that Yahoo! is lacking a good leadership and blamed the poor growth of the company to ineffective leadership and strategies of Marissa Mayer. Several investors felt that the market capitalisation of Yahoo! of $27.5 billion is so bad that it implies a negative value for Yahoo’s core internet business. With investors and employee’s faith crumbling in Mayer, more than 33% of the workforce left the company in 2015 and many were laid-off adding to employe-dissatisfaction and turnover.

In times of turbulence, where neither the employee morals seems to be improving nor there is any improvement in the investors’ trust in the strategic direction that the company is taking, many felt that a strong leadership is needed to turnaround the company. If new executives were brought in to set a new direction for the Yahoo, they must be focusing on effectively leading the organisation. Leading refers to taking bold and strategic decisions, motivating the employees by constantly communicating with them. Employees feel discouraged when they do not have a credible and reliable source of information and have to rely on rumours about the company’s strategic developments. By regularly engaging and communicating with the employees, new management of the company can win back the confidence and trust of the workforce. Under new leadership, Yahoo! has the ability to make a strong comeback and create a win-win situation for all the stakeholders.