Difference in Leadership styles between the
Old and Current CEO of Avon corporations
Organizational Behavior
Denise Cope, Dylan Stender, Faith Gilbertsen, Kyle Langland
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Table on Contents
Executive Summary………………………………………………………………….………... 3
Problem…...………………………………………………………………………..….….…...4-5
Background………………………………………………………………………………...… 6-7
Discussion of findings……………………………………………………………………..7-13
Conclusion and recommendations……………………………………….………………13-14
References.....................................................................................................................15
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Executive Summary
Avon was created in 1886 by a traveling salesman named David McConnell. He
saw a future of cosmetics when he realized that many of the housewives he was selling
to, were more interested in his perfume samples then the product he was truly selling.
Creating the idea to sell cosmetics door to door, David McConnell recruited house wives
to be his sales representatives. He believed in the networking ability that women had
and he was correct. The female sales representatives took his product straight to the
top and Avon is now considered the largest direct selling cosmetics company in the
world. Avon now has sales representatives in over 100 countries and is continuing to
grow in the global market (Avon Company , 2014).
In 1999 Andrea Jung, the first female Chief executive officer at Avon Cosmetics
took the reigns, beginning a new marketing era for Avon Cosmetics. Andrea Jung
brought Avon to the peak of its sales and continued to grow sales during her leadership.
Andrea Jung, background was in marketing and she lacked the sales and operation
management part of being a CEO and this weak point proved to be faulty. Sales slow
began to drop in and Avon was forced to produce declining profits three years in a row.
Avon slowly forced Andrew Jung to relinquish her title of CEO. Afterwards Avon brought
Sheri McCoy, a long time sales director from Johnson to Johnson (Goudreau, 2013).
This proposal provides research and discusses the differences and issues presented in
professional leadership styles. This proposal will focus on the following research
questions:



How does the difference in leadership styles directly affect the leadership of Avon
representatives?
What are some of the global implication that Avon may face with the leadership
change?
How will the change in new leadership style improve Avon Corporation compared
to the previous leadership?
1. A recommendation is that supplementary research be conducted to answer the
research questions stated above. Andrea Jung and Sheri McCoy both present
differences in professional leadership styles. The research being conducted by
the team will address which professional leadership style proved to be the most
beneficial to Avon cosmetics.
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1. Problem
In 1886, David H McConnell created Avon cosmetics (Avon Company , 2014).
He employed women to go out to local neighborhoods or surrounding areas and sell
much-needed cosmetics. His direct selling model was a success, forcing Avon to the
top of cosmetics selling. In 1999, Andrea Jung, the first female appointed CEO, took the
reigns (Avon Company , 2014). She brought Avon to a whole new level in the global
market. Her transformational leadership styles proved to inspire her managers, and
sales representatives to sell as many Avon products as possible (Sahgal & Pathak,
2007).
Due to her leadership model, Andrea Jung was named as one of the most
successful leaders of her time (Barash, Mogelof, & Webb, 2010). Her managers
respected her, sales were at their peak, and she was trusted on a global scale. Andrea
Jung believed in allowing her managers and sale representatives to set their own pace
(Duke, 2013). They were allowed to determine their own schedule, and sales. Andrea
Jung relaxed leadership style earned the trust of her fellow employees. It also proved to
be effective in the current economical climate (Duke, 2013). In 2007, the recession hit
the United Stated. Changing the economical climate.
Sales in cosmetics dropped. Andrea Jung did not take into account her need to
change her leadership styles. Her employees still used the same leadership model. Due
to the recession, the economic climate was no long allowing Andrea Jung leadership
style to thrive. Sales at Avon decreased, to the point where it was almost impossible to
bring sales up. In 2012, Avon asked Andrea Jung to step down from her role as CEO
(Martin, 2012).
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In 2012, Sherilyn McCoy was named the new CEO of Avon Cosmetics
(Goudreau, 2013). Bringing in a new leadership style, Sherilyn McCoy believed in
creating a new standard operating procedure on a global and local scale (Goudreau,
2013). She instilled motivation in her managers and sales representatives to push
harder for sales. Sheri brings a hard-fisted leadership designed to focus on sales, and
increasing those sales (Goudreau, 2013).
Avon now has two different leaderships styles held by two different CEO’s.
Andrea Jung held several years of success with her leadership style. It was not until the
past five years, her leadership style proved ineffective. Avon bringing in Sheri McCoy
showcased the need to change leadership styles (Martin, 2012). Avon has two
conflicting leaderships, but both are trying to reach the same goal. The proposal will
implore to answer the following questions:

How does the difference in leadership styles directly affect the leadership of Avon
representatives?

What are some of the global implication that Avon may face with the leadership
change?

How will the change in new leadership style improve Avon Corporation compared
to the previous leadership?
The team is imploring to discover the success or ramifications in changing the CEO
with a different leadership style. Avon was the number one direct selling company
worldwide. Andrea Jung proved to be an effective leader. Her sales within the past
years of her reign proved less then profitable. Sheri McCoy is bringing new ideas to
Avon (Martin, 2012). Avon is trying to show the change in leadership proved to be the
correct step.
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2. Background
Avon is a cosmetics company that was created by David H. McConnell in 1886
(Avon Company, 2014). Avon paved the way for women to work outside of the home
while bringing in some form of income. David McConnell believed that anyone should
obtain and accomplish financial independence (Avon Company, 2014). Avon has now
evolved into one of the worlds largest direct selling cosmetics company.
Women have been the backbone of Avon Cosmetics. More then 95 percent of the
Avon work force is female (Avon Company, 2014). In 1999, the first female CEO Andrea
Jung was placed at the head of Avon (Avon Company, 2014). Her expertise and
experience brought Avon to a new level in the global market. Andrea Jung was now in
charge of thousands of women who were selling in multiple countries (Avon Company,
2014).
Andrea Jung proved to be great for Avon. Her leadership styles inspired her regional
managers, and sellers to be the best at selling Avon products (Duke, 2013). Cosmetics
sales were solid and increasing. In 2007, the recession hit across the United States,
effecting sales on a global level. Cosmetics sales take a hit, and never fully recovered.
Due to the lack of change in leadership, Andrea Jung had a difficult time bringing
sales to their peak (Duke, 2013). She spent years, trying to motivate her employees,
and sales representatives to make solid sales. Since the economy had changed, it was
more difficult to sell cosmetics the same way as they had before. The change in the
selling climate, along with Andrea Jung leadership style (Sahgal & Pathak, 2007),
prevented sales to increase. Eventually, sales began to plummet to the worst sales year
Avon had ever seen since its creation. In 2012, Avon actively decided to have Andrea
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Jung step down from CEO of Avon. Also during this time, Sherilyn McCoy was named
the new CEO of Avon cosmetics (Goudreau, 2013). Sheri came from an executive
background from Johnson to Johnson (Goudreau, 2013).
3. Discussion of Findings
Andrea Jung became the youngest and first female CEO of Avon Cosmetic’s
(Protess, 2012). Her leadership style proved to be effective for the first decade of her
reign (Sahgal & Pathak, 2007). She actively tried to allow her representatives to make
their own decisions and come to their own conclusions (Sahgal & Pathak, 2007). Her
leadership style is based on the Path Goal Theory (Robbins & Judge, 2009). It has
been proven that Path Goal theory is the most used leadership theory found within the
work place (Robbins & Judge, 2009). Developed by Robert House, the PGT stresses
support, direction and information given by the leader, but allowing employees to come
to their own conclusions (Robbins & Judge, 2009). While Andrea Jung stressed
management, she allowed her managers, and sales representatives to set their own
goals and objectives (Sahgal & Pathak, 2007). Andrea Jung rejected any form of
leadership that gave all authority to her, and none to her sales representatives
(Ozmorali, 2014). She stressed that because of her self-awareness of her own personal
flaws her chosen leadership style would inspire and motivate her fellow employees
(Sahgal & Pathak, 2007).
Andrea Jung had some of the strongest sales even seen at Avon Cosmetics
(Ozmorali, 2014). When she first entered as CEO, her sales increased close to 30
percent at Avon cosmetics (Ozmorali, 2014). Her entrance, in 1999 into the Avon
Cosmetics proved to be beneficial to the company. As indicated in the graph, Andrea
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Jung brought sales from 5 billon, up to closer to 6 billion between 1999 to 2000
(Ozmorali, 2014).
*graph: http://www.worldofdirectselling.com/avon-in-numbers/
Over the course of a decade Andrea Jung still had solid profits. In 2005, Avon’s global
sales had increase close to 8.1 billion dollars and the increase on Avon’s global market
was close to 8 percent (Ozmorali, 2014).
Avon sales were solid. Avon made it through the recession, operating, and net
sales were stable (Ozmorali, 2014). It was not until 2012, when Andrea Jung faced a
very real challenge in her career. Operating sales in Avon took a very large decrease.
As indicated in the graph, close to 50 percent of the operating sales were down
(Ozmorali, 2014).
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*Graph: http://www.worldofdirectselling.com/avon-in-numbers/
Because of that decline in sales, Avon lost its ranking as the number one direct selling
company in the world (Ozmorali, 2014). Avon was struggling to keep sales from
decreasing; Andrea Jung leadership style was no longer proving to be effective in
increasing sales (Ozmorali, 2014).
Sherilyn McCoy entered as the new CEO of Avon Cosmetics in, 2012 (Protess,
2012). A female executive from Johnson to Johnson, Sheri McCoy stepped into a
company with decreased sales, and a lack on infrastructure (Protess, 2012). Entering
into a uncertain environment that Avon was presenting forced Sheri McCoy to have a
completely different leadership style then Andrea Jung had previously assimilated
(Martin, 2012). Instead of supporting and offering information to her subordinates, Sheri
had to provide structure and consistency within her employees (Protess, 2012). She
actively had to take into consideration the components needed to make Avon a success
again. The Avon environment was no longer allowing the leadership found in the Path
Goal theory (Robbins & Judge, 2009). Avon needed quick and decisive action in a
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environment of uncertainty. The Vroom-Yetton model allowed for quick and decisive
action.
The leadership-participation model was created by Vroom-Yetten under their
contingency theory (Robbins & Judge, 2009). The model initiates several variables, but
the model itself is dependent on the situation and how a leader reacts to a situation
(Robbins & Judge, 2009). Sheri McCoy entered a dire situation that was occurring
within Avon Cosmetics (Goudreau, 2013). The variables presented to her at the time
determined how she responded to the situation. The leadership-participation model
allows 12 unique variables (Mohan, 2013). The 12 variables of the Vroom-Yetten model
are completely dependent on the situation (Mohan, 2013). According to the Leadershipparticipation model five different leadership procedures are prevalent within the model.
Sheri McCoy only utilizes one; autocratic procedure (Mohan, 2013). A completely
autocratic approach is determined based on the information readily available at the time
(Robbins & Judge, 2009). A leader will make a decision without consulting any outside
source based on the information on hand (Mohan, 2013). The leadership-participation
model has several complexities in its variables (Robbins & Judge, 2009). The five
decision procedurals are concluded based on what type of decision making the leader
actively uses. The autocratic leadership style used by Sheri McCoy was vastly different
from the Path Goal Theory used by Andrea Jung (Mohan, 2013). The leadershipparticipation model is ideal for Sheri McCoy because of the unique situation and the
information readily available to her (Robbins & Judge, 2009).
Sheri McCoy became Avon second female CEO in 2012 (Protess, 2012). Sheri is
still the CEO in the year 2014, allowing her two years to pull Avon from it’s current
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financial state. In those two years, she has increased financials and overall capital
integrity (Avon Company, 2014). As CEO, Sheri cut several failing markets in order to
increase sales. Operating sales have improved. Currently, Sheri has achieved over 10
billion in sales and a 7 percent increase in beauty sales (Avon Company, 2014).
Andrea Jung utilized the Path Goal theory successful during her decade long reign
as CEO of Avon cosmetics (Sahgal & Pathak, 2007). The Path Goal theory proved to be
beneficial for Andrea Jung in motivating and inspiring her employees (Sahgal & Pathak,
2007). This theory allowed room for her employee to set their own goals and objectives
in order to achieve better sales and profits (Robbins & Judge, 2009). Profits for Avon
gradually increased over the several years Andrea Jung was CEO (Ozmorali, 2014).
She actively related to her employees by coming along side of them, guiding them, and
allowing them to make their own decisions (Robbins & Judge, 2009). The components
of this theory would indicate highly self-motivated employees, and complete trust on the
leadership side (Robbins & Judge, 2009).
Sherilyn McCoy leadership style provides structure and vital decision making with
information that is readily available (Protess, 2012). The contingency theory, or more
focally, the leadership-participation model involves several variables that require quick
decision-making (Robbins & Judge, 2009). Sheri McCoy utilized an autocratic variable
in order to make quick and hard decisions about the direction of Avon (Mohan, 2013).
Costs had to be cut in half, and sales had to increase dramatically at Avon Cosmetics.
Employees also had to be managed while keeping motivation high. The Path Goal
theory was greatly utilized by Andrea Jung when she was the CEO of Avon (Sahgal &
Pathak, 2007). Her leadership style was solid until it no longer proved effective. The
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Path Goal theory of leadership was no longer producing the type of results Avon
needed to maintain their status as the number one direct selling company (Sahgal &
Pathak, 2007). Sheri McCoy drastic difference in leadership is now providing structure
and discipline among her employees (Mohan, 2013). The leadership-participation model
may be an autocratic and unilateral type of leadership the usage of this leadership is
only effective when the leader is strong and has a well developed goals and objectives
(Mohan, 2013).
Avon is a global company located in over 100 countries (Avon Company, 2014).
Leadership styles vary due to cultural differences, language barriers, and certain
cultural rituals (Robbins & Judge, 2009). The PGT is a leadership styles that allows
room for cultural barriers to be overcome (Robbins & Judge, 2009). Support,
dissemination of information, and creating one’s own goals and objectives did not
confine sales representatives and mangers to a strict set of rules. Employees were
allowed to set their own pace, and whom they directly sold to (Robbins & Judge, 2009).
Andrea Jung personally traveled to each country to gently guide her representatives to
make correct sales (Chandler, 2011). Globally speaking, the Path Goal theory is a solid
leadership style, and proven to be successful when utilized correctly (Robbins & Judge,
2009).
The leadership-participation model under the contingency theory created by Vroom
and Yetten is harder to over come barriers (Mohan, 2013). Sheri McCoy focused mostly
on autocratic variables within the model (Mohan, 2013). The Vroom-Yetten model is a
highly disciplined leadership style, and a leader who utilizes it will appear strict and
ridged. (Robbins & Judge, 2009). While some cultures value discipline, structure, and
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rules, a majority of Avon sales happen within the United States. American
representatives value freedom to one’s own rules and structures (Duke, 2013). Sheri
McCoy’s sales are solid and they are gradually improving (Protess, 2012). Globally
speaking, the leadership-participation model is working, but it’s not overcoming the
cultural barriers as the Path Goal theory achieved (Robbins & Judge, 2009).
4. Conclusions and recommendations
Conclusions are made that due to the lack of change in leadership styles Avon
profits decreased dramatically under the leadership style of Andrea Jung. Her
leadership styles proved to be effective for the first decade during her time as CEO. Due
to the recession the Path Goal theory was rendered ineffective due to the lack of
motivation, information and overall sales given my Andrea Jung. The Path Goal theory
of leadership is ideal during stable economic times. It’s not ideal during economic
instability.
Andrea Jung also failed to focus on the global market. Mary Kay, another leader in
direct selling cosmetics has limited their market to major countries. CEO, David Holl
established that limiting the market share would result in a more focused target market
and limits the possibility of overextension (Mary Kay, 2014). Sheri McCoy, the current
CEO of Avon cosmetics has drawn the same conclusions by utilizing that leadershipparticipation model with her employees. Her sales representatives in certain markets
were no longer turning a profit, concluding that certain markets had to be cut. A
conclusion Andrea Jung failed to come to.
Andrea Jung correctly utilized the Path Goal theory for several years. Due to her
resistance to traditional leadership styles, Avon profits decreased drastically during a
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time where traditional leadership styles needed to be used. Sheri McCoy who uses the
decision theory or more directly the leadership-participation model helped established
structure and discipline among Avon employees. A final conclusion is that newest form
of leadership style that is being used have benefited Avon cosmetics where the old
leadership style was no longer proving to be beneficial or rendering profit.
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