ORGANIZATIONAL BEHAVIOR &

LEADERSHIP

WRITTEN ANALYSIS OF CASE

(MARIMEKKO)

Prepared By:
Muhammad Mudassar Shahid (ERP ID: 01094)

Instructor:
Mr. Nasir Afghan

Institute of Business Administration

Course: Organizational Behavior & Leadership Marimekko - WAC

Marimekko – The Beginning

Founded in 1951, Marimekko is a Finnish textile and design company; which started off
with women clothes, specifically for Finnish women’s taste. Later on they expanded into
international markets and expanded their product offering to include home interior textile,
men’s and children’s designer wear and fashion related accessories including large
variety of decorating items.
Company started its expansion in international markets in 1956 with Sweden which
increased the customer base. Their expansion was slow paced but increased after a huge
PR attraction in the media because of Mrs. John F. Kennedy involuntary statement issued
in press during her husband’s presidential campaign regarding the label; in 1960. For the
initial 30 or so years, Marimekko was doing great because the focus on the then owners
(Armi Ratia) was more on the design and flexibility of their clothes than on profitability.
Designers with non-profitable designs were encouraged to do a better job next time and
inventory was usually overstocked to provide highest level of customer satisfaction. This
lead to financial crunches for the company and marked the beginning of the decline.
After the death of Armi Ratia, her heirs for a few years ran the company, but eventually it
was sold out to AMER Group.
Under the ownership of the AMER Group, Marimekko suffered huge losses mainly
because of the following reasons:-
 There was a series of less profitable years during the last years of Armi Ratia,
mainly due to cash flow which was stuck up in the expanded production facilities
and the Marimekko village construction. This effect was carried forward to the
new owner.
 The AMER Group was restricting the creativity of the organization and its
employees because of a new management system (report based and a multi
stepped hierarchical structure).
 Since there was less focus on creativity which meant that Marimekko may not
have been coming up with profitable designs consistently.

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Course: Organizational Behavior & Leadership Marimekko - WAC

The New Marimekko

Kirsti Paakkanen Era (Management Approaches and Philosophies)
Kirsti Paakkanen (KP) took over the company when not only the company was
crumbling but also the Finnish economy. KP was a visionary, she was so confident in her
vision that she risked all her money and also took a bank loan, just for the sake of
resurrecting a dying fashion line. She was an able leader, having successfully operated
Womena; her entrepreneurial venture in advertising industry. KP realized that she lacked
the proper background knowledge of the company and its operations, placed her
confidence in the experienced and loyal people of the company to help her turn the
company around.
Her leadership style can be described as “emotional management”. This included all the
principles (her self-developed thesis) that have guided her through life, such as emotion,
respect, truth, enthusiasm, discipline, rewarding success, community spirit, taking full
responsibility and caring about things. She believed in valuing people and their ability,
originality, creativity and skills.
KP encouraged teamwork which became the most important working method at
Marimekko, and it has allowed the joy and even ecstasy of success to be experienced. KP
doesn’t believe that creativity can be delegated, nor is it generated by planning or
organizing. When one says that it is my limit and boundary, I cannot step outside, a
strong instinct drive gives the permission and / or order to carry on; which is basic human
trait.
KP dissolved the hierarchical structure and gave a freedom to work to the employees. At
Marimekko, internal communication was promoted since they don’t have hierarchy and
neither had documented job descriptions. Personnel are given freedom, although with
responsibility and with a common aim; to make Marimekko the big name in the industry
once again. Not just with the employees, KP also introduced the same freedom with
responsibility concept with her designers; most of which were freelance. The financial
responsibility (loss or profit) was taken on by the designer. This not only motivated the
designers, but also ensured that they will ensure profitable designs. Another motivating
factor employed by KP with respect to designers was ensuring they get the due
recognition in the market. The company has a high regard for its designers, and they were
given freedom and a pleasant working environment, but it also trained them to take
current market demands into consideration.
She restructured the company into a dynamic matrix structure. She was also a feminist as
well, giving the power to women. She had about 90% female workforce which
introduced an alternate for the usual men biased silo. KP wanted to make out most out of

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the Marimekko brand, broadening its horizon by including several brand and line
extensions, with freely delivered creative design as the focus in all. Her long term vision
was to create Marimekko as a global brand, of Finnish origin, and she succeeded is
succeeding, by exploiting markets all over the world. KP was a visionary, optimist,
patriotic, feminist, and confident, with an anti-bureaucratic mindset and a team building
leader having a good internal locus of control.
Marimekko's Turnaround
There were many factors that contributed in the turnaround of Marimekko but the most
important one was KP's self-belief. Her internal locus of control helped her overcome all
hurdles and turnaround the failing business. She believed that Marimekko have created a
very deep impression in consumers mind over the initial 30 years, and it’s hard that the
strong brand affiliation be killed anytime soon. She believed in making the company
profitable again based on this strong believe. She repeatedly instilled the same belief to
all her organizational and design team, sharing the responsibility and credit with each
person associated with the company.
Her approach to give freedom and recognition to the designers along with the
responsibility of ensuring profitability of their designs was a major factor in her products
to be well received by the market. All the managerial and structural changes helped in
increasing the role of each individual designer and encouraged them to think out of box
and take the best out of the opportunity. Providing amazing work environment,
conducting and following design competitions to pick out the best of lot, and increasing
dependence on freelance designer to maximize variety and creativity.
One of the first steps to reenter the market was introduction of an old design which was
quite famous during the early years of the brand leading to the famous "Retro Fashion
Movement".
KP's vision to lead the company into offering a diversified range of products. This lead
Marimekko to start Men's business wear and children's wear lines which leveraged the
brand equity established by the women and interior textile product line. It was an
intelligent decision even from the brand management point of view and one of its kind
idea in those times. The success of this idea further established the fact that the
company’s core value was ‘creativity’.

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Course: Organizational Behavior & Leadership Marimekko - WAC

Culture
The culture of Marimmeko, from its foundation had been very rich and dictinct.
Emerging designers were recruited and creative prints were promoted. Instead of
following the fashion trend of the fashion capitol of the world (Paris), Finnish originality
along with functionality (founders’ aspiration for making clothes people are comfortable
in and have movability) was focused up on. The creative workforce was the key
ingredient for the success of the company in the initial 30 years. KP correctly identified
this as an indispensable cornerstone of Marimekko, and therefore, provided the best
working environment for the designers. Furthermore, KP along made sure that designer
were able to complete their creative work, before the product management team
intervened and discussed the marketability of their designs.
Freedom
Since the company’s founding, Marimekko’s one of the core value was freedom of
expression which was laid down by the co-founder Armi Ratia. She employed emerging
and aspiring designers to produce creative prints for the company’s products. She was a
risk taker and an entrepreneur and similarly encouraged the entrepreneurial spirits in her
employees. Freedom to make decisions was given to the designers to such an extent that
they were only asked for the best creative work, irrespective to the profitability of their
designs.
However, in the long run, that led to financial crunches. Therefore, when KP took over,
she although gave the same level of freedom, however, made the designers as economic
partners of their designs, making them responsible for the profit / loss made on the sales.
Another important step KP took in order to further strengthen this concept was
contracting freelance designers so that they feel completely independent while working.
KP revitalized the creative spirit, since design was declared main priority. To optimize
the creative pool of designers, she also focused more on freelance designers rather than
the in-house. These designer were further motivated through tangible (financial incentive
such as royalties etc.) and intangible (their name on the tag, pleasant workplace etc.)
means.
Task Based Teams
KP’s first step after taking over the company was to abolish the hierarchical structure and
introduce the teamwork environment. The whole structure of the company was revamped
and instead task based teams were introduced. Even these teams were allowed to share
ideas in between so as to achieve the organizational goals. The reporting culture
introduced by AMER Group was replaced by designer centric culture. Each team was
assigned a leader and delegated a task; with clear objectives and responsibility in their
minds.

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No Specific Job Descriptions

Since KP employed tasks based team structure, the enforcement of specific job
descriptions was also discouraged and so was and defined organizational chart. This lead
to the employees acknowledge a sense of ownership of the company. Every employee
was encouraged to pool in ideas in cross functional area. KP specifically told her
employees that this pooling of ideas was key to rebuild Marimekko, since she herself
didn’t had the required experience of the company, however, the employees did.
Employees worked on a several projects under one project leader and most efforts were
company level goal-driven.
Profit sharing
KP introduced a very effective yet generous way of compensation policy with her
designers. The designers were made partners and were shared with the profit made of the
sale of their designs. Not just that, they were also incentivized using the royalties policy
for future sales of their designs. This resulted in a vested interest of the designers into
making the most creative pieces of art so that benefit could be maximized. Not just the
business profit, the economic profits of getting recognized and being able to build their
independent brand equity was also available. Incentives like these lead to greater interest
of the designers.
Feminism
From the very beginning of her career KP had a strong belief regarding women being
able to outshine men without their support. She was a sting feminist. Her first
entrepreneurial venture ‘Womena’, was based on this belief of hers; as she had only
females working for her. After taking over Marimekko, she again employed the same
strategy, and thus the ratio of 9:1 women for the workforce was overwhelming. Although
this strategy has its advantages, such as women are more inspired by the fashion trends
and women fashion have more diversity, however, since the company had been
expanding into children and men clothing also, it is highly likely that they will face huge
challenges in future. Research also suggests that the thinking process of men and women
is different and Marimekko may miss out important ideas men might be able to stir up.
Furthermore, they are deliberately hiding themselves from almost half of consumer base.

Going Global – Possible Strategies

Disparity of Gender: With the expansion of the business, especially into men clothing,
the gender disparity that currently prevails in the company should be abolished. Since the
thought process of men and women are different; global companies need diversified
workforce in order to sustain in the global competitive environment. KP’s belief on
anchoring the feminist block should be marginalized if not much to at least 5:1 ratio in
favor of women. This way the belief of KP empowering women will not be overruled;

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Course: Organizational Behavior & Leadership Marimekko - WAC

but will allow men to participate in the overall thinking process and improve the creative
and intellectual synergy of the company.
Going Glocal: A key concept coined by international marketers for companies going
global is ‘glocal’. It suggests that the companies going global have a huge challenge to
overcome social and cultural barrier of the new avenues. To go global Marimekko will
have to be extremely aware of the changing culture continuum that they will face across
international borders. Markets in which they are expanding currently such as Middle
East, they might face a huge cultural challenge on implementation of Marimekko concept
outlets. Therefore, they should consider customizing it according the the local culture.
Similarly, the cultural differences can be used by the comapny as an opportunity to
introduce new brand and line extensions.
Development of Franchises and Offshoring: Franchising is one window that Marimekko
should look into for expansion. Similarly, off shoring options should also be looked into
to cut costs down especially for the eastern markets, which will help them reduce the lead
time of distribution; since one of the reasons not to utilize offshore production facilities
outside EU was lead time. This will provide quick supply to concept stores abroad, and
be the path to added brand value building as an international corporate.