Service Factory Case Study Solution


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Service Factory Case Study Help

Background and Facts

Service Factory a workplace products merchant for small and also medium sized services has lately been involved in preparing for a merger with its rival House Deport, which has actually influenced efficiency degrees in departmentswith the elderly manager associated with lawful problems put forth by the federal Profession Payment. With the Marketing Head advancing the information of his departure from the company in one year, Jeannie Lewis, the existing head of procedures has been asked to take the role in the future. With obstacles in the type of a potential cultural change and also reduced worker morale, the organization is in need of a total reengineering effort at the advertising department.

Problem Declaration
Porter's 5 Forces Analysis
The potential social change at the advertising division of Service Factory is increasing uncertainty in the workplace leading to numerous obstacles for the Jeannie Lewis that would be changing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a major role in influencing strategic choices considering that Stapes Inc. had to desert its strategies of combining with Office Deport after the Federal Trade Compensation's intervention in the process. Given the fact that the store has a worldwide visibility with branches in UK, U.S.A., Canada and also Germany, political consider each of these countries may have the ability to impact performance or strategic objectives. Federal Trade Payment's antitrust suit against the merging used up valuable time of the organization's senior management recommending that 'political' factors can have severe ramifications for an international organisation.

Economic Factors: Economic factors such as the development of local business in the global circumstance recommend that Service Factory is flourishing in an environment where there is possible development of companies. Reality that store consumers are mainly looking for workplace products for home offices recommends that the market has a rising trend of business owners and home based organisations.

Social factors: Social fads in the economy reveal that customers are seeking ease along with attractive prices. Market research demonstrates how the consumer for Service Factory lacks awareness regarding finding remedies which can provide a combination of benefit as well as affordable.

Technical factors: Innovation plays an essential duty in Service Factory's service strategy specifically as the company is piloting Innovation facilities which would offer technology sales and also support in the form of memory upgrades, peripheral installments. (Summary of INSECT in appendix 2).

OB Issues and also Effects.

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

Worries regarding social modification: There is uneasiness about a social change that would certainly occur when Todd Krasnow leaves from his placement as the Executive Vice President of Advertising with most of the employee currently revealing unhappiness over this potential move. This predicted change has created anxiety in the work environment which has been combined with the previous stress and anxiety of preparing the firm for a possible merging with House Deport.
Pest Analysis
Difficult Work Setting for Newcomers: There is scarcity of employees that can match the demanding environment of a hectic company. Not just does this lead to problem in finding the best people, it puts stress on brand-new hires as can not hold up against the rate and pressure that the company expects them to birth.

Dual Coverage Lines: Newbies find this organizational culture difficult as well as difficult to cope with especially as dotted line relationships are suggested to be weak as a whole and objective setup and efficiency evaluation is still done by the strong line manager. This suggests that beginners could lose quality about their particular roles as well as purposes specifically as dotted line reporting does not keep them in direct interaction with the strong line supervisors.

Bitterness From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower instead of Bridget Coles even though it had actually been hypothesized that the latter would take Krasnow's placement came as a blow to her morale. Lewis may have been qualified as well as proper for the work yet the fact that Kransnow's separation would certainly make Coles a direct record to Lewis might have been the reason for Coles' resignation from services.

Fear & Job Insecurity: Worry as well as instability can be determined as two major problems that Lewis would be dealing with specifically as the merger has now be cancelled and also 2 elderly execs of the advertising and marketing division would certainly be leaving. The whole duty of the department would certainly be dropping on Lewis's shoulders that would not simply supervise of brining regarding a social adjustment however would certainly additionally need to prove herself in her new function.

Inappropriate Monitoring Style of Leader: Lewis's monitoring style and its conflict with the advertising department's function can likewise be seen as an OB difficulty particularly as she has been utilized to taking care of problems in the procedures department where workers are instructed to focus on processes and also get them. The advertising and marketing department on the various other hand can be seen as a group of people that are made use of to being nurtured by Krasnow who concentrated much more on output than processes.

Interdepartmental Differences: Interdepartmental differences between three departments, marketing, merchandizing as well as operations respectively over the appropriation of the marketing mix can be identified as one more OB problem. Although the advertising division does not share the exact same vision as the various other 2 divisions relating to the aloocation of the advertising mix twoards promos and advertsing, the merchandizing and also procedures departments do not concur over the advertising and marketing mix allocation amongst one another either.

Fragmentation in Advertising And Marketing Division: Fragmentation in between the marketing and advertising divisions can be recognized as an additional OB issue which can require further interest. The reality that the marketing and advertising areas in the advertising department are detached is stopping both divisions from obtaining from each other's experience and also proficiency. Assimilation of advertising with retailing and operations would certainly come to be harder if the advertising division itself is broken down which can be another prospective OB issue.

Service Factory Analysis

Numerous theories have been made use of to explain the scenarios to get more clarity regarding the situation at hand.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Concept X, a lot of managers believe that juniors are easy as well as lazy, have little passion as well as withstand adjustment. The tough variation of this concept emphasized threat, limited controls, threats and punishments. With time it produces low performance, subtle sabotage as well as rivalry (Offer, 2003). Although the circumstance at Service Factory is not completely following Concept X, it can be seen that brand-new hires are locating this environment rather difficult which may ultimately bring about a higher disposition of the administration in the direction of Theory X. As per McGregor's supported view, which he called Theory Y, the necessary task of the administration is to arrange business problems to make sure that people can achieve their very own goals best by routing their initiatives towards business incentives. If individuals locate no complete satisfaction in their job, the management would certainly have little selection but to rely on theory X and exterior control (Deal, 2003). Also while evaluating Lewis's monitoring design, concept X may have appropriated in the operations department to some extent however the Marketing division would need dependence on Theory Y to get the creative thinking and also originality from the groups.

Tuckman's Teamwork Theory: Regarding Lewis's problem concerning bringing harmony in between the advertising and marketing department is worried, this would originally result in conflict as discussed by Bruce Tuckman in his 'Teamwork Theory'. (Tuckman, 1965). Based on Tuckman's theory displayed in appendix 3, throughout the first stage of group development, people might not bond, as they are hectic locating their location in the group. By combining the advertising and marketing department's work, there may coincide initial detach which could result in the 2nd stage of 'storming' where the groups challenge one another. It is just during the 3rd stage or 'norming' when they would come with each other to share concepts before the team can bring about harmony in the 4th phase 'performing'.

When people are offered with modification, they get in phase one and also so there might be emotions like sadness, uncertainty, frustration, rage, anxiety, denial and disorientation.The scenario at the marketing department of Service Factory is comparable so Lewis can obtain comfy with the idea that it is not extraordinary behavior. It is during this phase that Lewis will certainly have to provide advice to the department so that they can locate a sense of instructions. It can be seen just how Krasnow has actually already made this transition less complicated by making Lewis obtain included in the department a year prior to his actual departure.
Vrio Analysis
Abraham Maslow in his Theory of 'Requirements Power structure' (appendix 5) has goes over the relevance of 'protection requires as being a lower degree requirement of a human for causing motivation. As seen in the pyramid shared in appendix 3, we can see exactly how 'the need to really feel protected and out of risk' is at the second level of requirements. Prior to a worker can be made to develop psychologically, he requires to have his 'Physical 'and 'Safety' needs fulfilled.

SWOT Analysis for Service Factory Case Study

Ramification of Analysis.

The OB analysis has considered numerous theories to recognize how to deal with the current scenario at hand. The adhering to 3 choices have actually been suggested to aid Lewis manage the organizational difficulties in the marketing department. Each of these alternatives has been proposed for easing the change needed to bring the advertising and marketing division in line with the demands of the market as well as for making the cultural adjustment that would follow as soon as the existing leader leaves.

Combination of marketing and advertising functions. Separating Adverting and Production functions. Combination of Advertising And Marketing with Procedures.

Assessment of Alternatives.

Combination of Advertising And Marketing & Marketing Functions: The internal advertising firm of Service Factory is already toughness for the organization in terms of conserving up on overheads associated with advertising and marketing and also promo. Considering that no brand-new recruitment has been done after Bridget Cole's separation with the coverage line being straight designated to Krasnow for the marketing function, this is a beneficial chance for incorporating the advertising and marketing features. Judith Shapiro that has actually earlier been spoken with by Lewis throughout the earlier merger days has know-how in business-to-business marketing in addition to firm and retail marketing experience. Once Krasnow leaves, Lewis can hire Shapiro as an EVP for advertising to handle both advertising and marketing features.

The advantage of this technique is that it will certainly incorporate both functions while minimizing the need for working with an additional resource for advertising. Along with this, Lewis would be heading the advertising and marketing division as well as regardless her substitute would be needed for the current duty that she is doing. The downside of this option is that exterior hiring may cause animosity from interior workers that may be considering the position of EVP after Lewis takes control of Krasnow's setting.

Separating Adverting as well as Manufacturing: Given the competitive stress and also high quality work required from the advertising company, it is recommended that Lewis should permit the manufacturing system to be a separate function from the marketing system. Considering that the majority of advertising and marketing agencies had these 2 functions as separate units, it makes even more feeling to adhere to the norm.

Assimilation of Advertising with Procedures: Since Lewis is currently taking treatment of the advertising and operations departments all at once; it makes feeling to incorporate the 2 functions because she has actually been successfully taking care of both ends. The truth that Lewis has to adapt her monitoring design for the advertising and marketing division suggests that these 2 divisions would be culturally varied.


An examination of the 3 alternatives indicates that integration of advertising and marketing and operations would certainly not be a feasible move due to the vast differences between the two departments despite the reality that currently Lewis is managing both. While separation of the production feature might have been a positive move for the advertising and marketing division, the reality that it would suggest putting a third function under Lewis's wing means this must be avoided.

Activity Plan.
Lewis will certainly take over the function of EVP Advertising after Krasnow leaves.

Marketing and advertising functions would certainly be merged.

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

Production function will certainly continue to be component of advertising and marketing under advertising feature.

Lewis will certainly divide herself from operations.

A democratic management design with worker empowerment will be utilized in marketing department.

Open door plan as well as focus on cross department interaction will certainly be aimed at getting rid of dissonance.

Backup plan.

If the assimilation does not work out as planned, a backup strategy would certainly adhere to which would divide the manufacturing function from the marketing function to reduce the load on the SVP of advertising and marketing. In case Judith Shapiro does not obtain employed, Lewis will certainly be heading the marketing division without an SVP. Because case the production feature will certainly be divided by placing it under an SVP manufacturing.