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Service Factory Case Study Solution

Background and Facts

Service Factory an office products store for tiny and average sized services has actually just recently been involved in preparing for a merger with its competitor Residence Deport, which has actually impacted effectiveness degrees in departmentswith the senior manager involved in legal complications presented by the government Profession Compensation. With the Marketing Head advancing the information of his departure from the company in one year, Jeannie Lewis, the current head of procedures has actually been asked to take the function in the future. With challenges in the form of a potential social change and also low employee morale, the organization needs a full reengineering effort at the advertising department.

Problem Declaration

The potential social change at the marketing division of Service Factory is enhancing uncertainty in the working environment leading to various difficulties for the Jeannie Lewis who would certainly be changing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant function in affecting tactical choices because Stapes Inc. had to desert its plans of merging with Workplace Deport after the Federal Profession Payment's treatment in the process. Provided the truth that the store has a worldwide presence with branches in UK, USA, Canada as well as Germany, political factors in each of these countries may have the ability to affect efficiency or calculated objectives. Federal Trade Compensation's antitrust suit versus the merger used up useful time of the organization's elderly administration recommending that 'political' factors can have severe ramifications for a global organisation.

Economic Factors: Financial factors such as the appearance of small businesses in the worldwide scenario suggest that Service Factory is thriving in a setting where there is possible development of companies. Truth that store consumers are primarily looking for office materials for residence offices suggests that the market has an increasing fad of entrepreneurs and also home based companies.

Social factors: Social trends in the economy show that consumers are searching for benefit in addition to eye-catching costs. Market research shows how the client for Service Factory does not have understanding regarding discovering remedies which can offer a combination of benefit and affordable.

Technological factors: Modern technology plays a crucial role in Service Factory's organisation technique particularly as the organization is piloting Innovation facilities which would certainly provide innovation sales and also assistance in the type of memory upgrades, peripheral installments. (Summary of PARASITE in appendix 2).

OB Issues and also Manifestations.

Numerous underlying Business Actions concerns can be seen in Service Factory's case as highlighted in this area.

Concerns about cultural change: There is worry concerning a cultural change that would certainly take place once Todd Krasnow leaves from his placement as the Exec Vice President of Advertising with a lot of the staff members already showing discontent over this possible move. This expected modification has actually produced anxiety in the workplace which has been paired with the past stress of preparing the company for a prospective merging with House Deport.

Difficult Task Setting for Newcomers: There is lack of workers that can match the difficult setting of a fast-paced organization. Not only does this result in trouble in finding the best people, it places tension on new hires as can not withstand the rate and stress that the company anticipates them to birth.

Dual Reporting Lines: Beginners discover this business society cumbersome and hard to deal with especially as dotted line partnerships are implied to be weak generally and unbiased setup as well as efficiency assessment is still done by the solid line supervisor. This means that novices can lose clearness about their particular duties and objectives particularly as populated line coverage does not maintain them in direct communication with the strong line managers.

Animosity From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower as opposed to Bridget Coles even though it had been hypothesized that the last would certainly take Krasnow's placement came as a blow to her morale. Lewis may have been qualified as well as suitable for the work yet the fact that Kransnow's separation would certainly make Coles a straight report to Lewis may have been the factor for Coles' resignation from solutions.

Fear & Task Insecurity: Concern as well as insecurity can be recognized as two major problems that Lewis would certainly be dealing with particularly as the merger has actually now be cancelled as well as 2 elderly execs of the advertising and marketing division would be leaving. The entire obligation of the division would be dropping on Lewis's shoulders that would certainly not just supervise of brining concerning a social change yet would certainly likewise have to confirm herself in her brand-new duty.

Incompatible Monitoring Style of Leader: Lewis's monitoring design as well as its conflict with the advertising division's function can additionally be seen as an OB challenge particularly as she has been utilized to handling problems in the procedures department where personnel are educated to focus on procedures and also obtain them right. The advertising and marketing division on the various other hand can be viewed as a team of people that are used to being supported by Krasnow who concentrated much more on result than processes.

Interdepartmental Disputes: Interdepartmental differences between 3 divisions, advertising, merchandizing and also procedures respectively over the allowance of the advertising and marketing mix can be identified as an additional OB issue. Although the advertising division does not share the exact same vision as the various other 2 divisions concerning the aloocation of the advertising and marketing mix twoards promotions as well as advertsing, the merchandizing and operations departments do not agree over the marketing mix allotment among one another either.

Disintegration in Advertising Division: Disintegration between the marketing and advertising departments can be recognized as another OB concern which could require further focus. The truth that the advertising and marketing areas in the advertising and marketing department are detached is avoiding both divisions from acquiring from each various other's experience as well as know-how. Integration of marketing with merchandising and procedures would come to be more difficult if the marketing department itself is broken down which can be one more potential OB issue.

Service Factory Analysis

Various theories have actually been used to describe the situations to obtain additional clarity regarding the scenario at hand.

McGregor's Concept X & Y: According to Douglas McGregor's Concept X, many managers think that subordinates are passive and careless, have little passion and also stand up to change. The circumstance at Service Factory is not entirely adhering to Concept X, it can be seen that brand-new hires are finding this atmosphere instead stressful which may eventually lead to a higher inclination of the management towards Concept X. Also while examining Lewis's monitoring design, theory X might have been suitable in the procedures department to some level but the Advertising division would certainly require reliance on Theory Y in order to get the creative thinking and also originality from the groups.

Tuckman's Team effort Concept: As much as Lewis's problem about bringing consistency between the marketing and also advertising division is concerned, this would at first lead to conflict as reviewed by Bruce Tuckman in his 'Synergy Theory'. By combining the marketing and marketing division's job, there might be the very same preliminary disconnect which might lead to the 2nd stage of 'storming' where the teams challenge one another.

Bridges' Change Design: According To William Bridge's theory (appendix 4), individuals are fairly uneasy with modification, which is apparent by the circumstance at Service Factory The scenario can be viewed as a regular course of life if is researched according to Bridge's concept where he explains that people go through 3 stages of transition when they experience modification. 'Closing, shedding as well as Letting go', The Neutral Area as well as 'The New Beginning' (Bridges, 2004). When individuals are presented with change, they enter phase one and so there may be feelings like sadness, uncertainty, stress, anger, worry, rejection as well as disorientation.The circumstance at the advertising and marketing division of Service Factory is similar so Lewis can get comfy with the idea that it is not extraordinary actions. In the 2nd phase, there might be a demand to link the void between the new and old society so Lewis might need to face this experience as soon as Krasnow leaves. There may be low spirits and reduced productivity at this stage which need to not be taken as a trouble. It is during this phase that Lewis will need to provide support to the department to make sure that they can locate an orientation. It can be seen how Krasnow has already made this transition easier by making Lewis obtain associated with the department a year prior to his actual separation. As per Bridges' Design, stage 3 will certainly cause visibility to discovering, High power as well as dedication as people will welcome the modification (Bridges, 2004).

Maslow's Need hierarchy: The OB problem related to instability at the work environment has been triggered firstly by the adjustment in management and secondly by the truth that the merging will no longer be started. Abraham Maslow in his Theory of 'Demands Power structure' (appendix 5) has talks about the value of 'safety requires as being a lower level need of a human for causing motivation. As seen in the pyramid shared in appendix 3, we can see just how 'the need to feel safe and also out of danger' goes to the second level of demands. Prior to a staff member can be made to create psychologically, he requires to have his 'Physical 'and 'Safety and security' needs fulfilled. This indicates that unless the personnel are made to really feel protected about their existing employment condition in Service Factory they may not reach 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Service Factory Case Study

Implication of Analysis.

The OB analysis has looked at different theories to comprehend how to handle the present scenario at hand. The complying with 3 choices have actually been proposed to help Lewis take care of the business challenges in the advertising department. Each of these options has actually been recommended for reducing the shift required to bring the advertising department in accordance with the requirements of the marketplace and also for making the cultural change that would certainly comply with as soon as the existing leader leaves.

Integration of advertising and marketing features. Dividing Adverting and also Production functions. Assimilation of Marketing with Procedures.

Evaluation of Alternatives.

Judith Shapiro that has actually earlier been spoken with by Lewis throughout the earlier merger days has know-how in business-to-business advertising and marketing along with agency and retail advertising and marketing experience. Once Krasnow leaves, Lewis can employ Shapiro as an EVP for advertising and marketing to deal with both marketing and advertising features.

The advantage of this strategy is that it will certainly incorporate the two features while lowering the need for working with an extra source for advertising. Along with this, Lewis would be heading the marketing department and in any case her substitute would certainly be required for the present function that she is executing. The downside of this choice is that external hiring might produce resentment from internal workers who might be considering the placement of EVP after Lewis takes control of Krasnow's placement.

Dividing Adverting as well as Production: Given the competitive pressures and also top quality work called for from the advertising agency, it is suggested that Lewis ought to permit the production unit to be a separate function from the advertising and marketing device. Since the majority of ad agency had these 2 functions as different units, it makes even more feeling to adhere to the norm. In addition to this, both functions might have the ability to concentrate on their core turns on a lot more successfully. The drawback of this approach would be that additional prices would have to be borne for establishing up different production features. In addition to this, a production head may have to be worked with which can boost overheads for the company.

Assimilation of Advertising with Operations: Since Lewis is currently taking treatment of the advertising and procedures departments simultaneously; it makes feeling to incorporate the two features considering that she has actually been successfully taking care of both ends. The reality that Lewis has to adjust her administration style for the marketing division suggests that these 2 divisions would be culturally varied.


An examination of the three options shows that integration of marketing and also procedures would certainly not be a viable action because of the huge distinctions in between both divisions although that presently Lewis is taking care of both. While splitting up of the manufacturing feature may have been a desirable step for the advertising department, the reality that it would mean putting a third function under Lewis's wing means this need to be prevented too. The assimilation of the advertising division is the most effective choice in regards to getting the optimum results from the division. An activity plan for this choice is talked about listed below.

Activity Strategy.

Lewis will certainly take over the duty of EVP Marketing after Krasnow leaves.

Advertising and Marketing functions would be combined.

Judith Shapiro will be employed to take Lewis's location as SVP of marketing and advertising.

Production function will certainly stay component of marketing under advertising and marketing function.

Lewis will certainly divide herself from procedures.

An autonomous management style with staff member empowerment will certainly be utilized in marketing division.

Open door policy as well as focus on cross department communication will certainly be targeted at getting rid of dissonance.

Backup strategy.

If the assimilation does not work out as planned, a backup strategy would adhere to which would separate the production feature from the marketing feature to reduce the lots on the SVP of marketing and advertising. In case Judith Shapiro does not obtain employed, Lewis will be heading the marketing department without an SVP. In that case the manufacturing feature will absolutely be separated by putting it under an SVP production.