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Mrs Fields Cookies Inc (Part1)

Mrs. Fields’ Cookies, Inc. was founded by Debbi and Randy Fields in 1977, leveraging Debbi's freshly baked cookies to tap into a niche market. Their management style emphasized control and hands-on involvement, leading to the expansion of over 500 stores by 1987, all owned and operated by the Fields. They utilized advanced information technology systems to maintain operational efficiency and decision-making, allowing them to oversee a large number of stores while retaining significant control.

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Bhagyashree Mahajan
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43 views2 pages

Mrs Fields Cookies Inc (Part1)

Mrs. Fields’ Cookies, Inc. was founded by Debbi and Randy Fields in 1977, leveraging Debbi's freshly baked cookies to tap into a niche market. Their management style emphasized control and hands-on involvement, leading to the expansion of over 500 stores by 1987, all owned and operated by the Fields. They utilized advanced information technology systems to maintain operational efficiency and decision-making, allowing them to oversee a large number of stores while retaining significant control.

Uploaded by

Bhagyashree Mahajan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Mrs.

Fields’ Cookies1

Part 1

Mrs. Fields’ Cookies, Inc. is one of the most famous examples of excellent entrepreneurship. The
concept for the business venture emerged from insights derived from very routine everyday experience.
Randy Fields was in the habit of taking freshly baked cookies, made by his wife, Debbi, to his office.
The cookies were appreciated by almost everyone who tasted them. This convinced Debbi that there was
a niche market in which customers would pay premium prices for freshly baked cookies made from the
finest ingredients. In 1977, Debbi and Randy Fields obtained a loan of $50,000.00 and opened their first
store in Palo Alto, California. Their specialty was fresh and warm chocolate chip cookies. The store was
a huge success and it sold cookies worth $ 200,000.00 in the very first year.

Both Randy and Debbi shared a common management philosophy. Like many other successful
entrepreneurs, they had a strong desire to maintain control over all aspects of the organization. Randy
expressed a need to know exactly what every employee in the organization was doing on a regular basis.
Debbi did not have any respect for the concept of delegation, which was very popular in the
management literature. She had built her business based on certain practices and she made sure that
every employee understood her way of doing things, and replicated them even in her absence. Whenever
possible, she preferred to demonstrate every role by performing it herself, so that her employees could
be clear about her expectations. She left nothing to the discretion of her employees.

Their management philosophy discouraged them from expanding their business. The Fields were aware
that high growth would not only make them loose control, but also bring in bureaucratic systems, which
they detested. However, strong pressures from other stakeholders made them expand their outlets to
other cities. By 1987, they had more than five hundred stores in thirty-seven states in the US. Unlike
many other food retailers, none of the stores were franchised. All the stores were owned by Debbi and
Randy Fields, and run out of their new headquarters in Park City, Utah. They managed to have almost
the same amount of control over the expanded business as they had when they ran a few stores. Randy
believed that with the business design that they had implemented, he and Debbi, along with a small
corporate staff, could oversee almost one thousand stores with the same ease with which they managed
thirty stores.

The business design was based on three fundamental elements. The first element was the nature of
employees hired. Most of the about 4500 employees were young and inexperienced and knew little
about the cookie business. They did not have the knowledge or experience to make even routine
business decisions. For example, even the senior most employees in the store were incapable (or not
expected to be capable) of forecasting daily demand, deciding on production quantities, and developing
staffing schedules that were required on a regular basis. Of course, they were not capable of handling
other decisions such as applicant appraisal and hiring etc. In short, the employees had a strong need to
rely on others to make these decisions.

1
This case has been prepared by Prof. Abhoy K. Ojha based on cases on Mrs. Fields Cookies available in Organization
Theory by Stephen Robbins (1990) and Designing Organizations by Daniel Robey and Carol A. Sales (1994) and publically
available information on the organization. It is to be used as a case for classroom discussion and does not illustrate a right or
wrong way to manage an organization.
The other two elements of the business design were a phone-mail system and a company wide computer
system, both exploiting the latest available information technology. The phone-mail system allowed
Debbi to maintain contact with all the stores. She used the system to communicate her ideas and
concerns to all the stores promptly and in her own voice. The use of voice rather than other forms of
communication helped her transfer much of the subtlety associated with one-to-one interaction. The
same system was used by employees to provide information or seek clarifications from the head office.
Debbi had a policy that she would respond to any employee message within 48 hours. The phone-mail,
to a large extent, replicated Debbi’s strong hands-on style of management.

The company wide computer system integrated all company-related information such as cookie sales,
payroll records, supplier invoices, inventory reports and utility charges in one system. But the greatest
strength was in its ability to guide decisions at individual stores. Each store manager was expected to
access the Day Planner program at the beginning of the day. The program would ask a few questions
such as, What day of the week is it? Is it a normal day, holiday, or other? The program reviewed the
stores performance on the previous three comparable occasions, to provide the sales goals by the hour
for each product. It also provided details on the number of batches of cookie dough to make and when to
make them. The program tracked the actual sales on that day and revised estimates and instructions as
the day progressed. It even went to the extent of suggesting distribution of free samples to passerbys
outside the store when the sales were low. Each store computer was connected to the head office, so
Randy could access live information on each and every store.

In addition to providing detailed decisions for daily operations, the program provided staff schedules for
the next two weeks, and made hiring decisions based on information provided by applicants that were
entered. The system also had a repair program that helped managers deal with routine repair and
maintenance. If the equipment could not be repaired remotely, the computer would even suggest the
name of the closest vendor who should be contacted for the work. In essence, the computer system
helped the head office, mainly Debbi and Randy, to make as many decisions as possible without being
at the specific store.

Even with the information systems and a small corporate office staff in place, the Fields had to add a
few layers in the hierarchy. In addition to store managers, they had positions such as area sales manager,
district sales managers, and regional directors of operations etc. However, the organization was much
flatter and allowed the founders to have much more control over the organization than would have been
possible in any other organization of a similar size. Randy Fields did not expect things to change even if
the organization expanded further.

Questions.

1. Examine the store level activities at Mrs. Fields Cookies using Charles Perrow’s framework. Can it
be used to explain the successful of use of IT in its business model?
2. What are the disadvantages of the business model adopted by Mrs. Fields?
3. Will the organization be successful if the nature of activities at the store level change?

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