Aes Corporation A Global Sourcing Initiative Case Study Solution


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Aes Corporation A Global Sourcing Initiative Case Study Help

Background and Facts

Aes Corporation A Global Sourcing Initiative an office materials retailer for small and average sized organisations has actually lately been associated with planning for a merging with its competitor House Deport, which has affected performance levels in departmentswith the senior manager associated with legal problems put forth by the government Profession Payment. With the Marketing Head putting forward the information of his departure from the company in one year, Jeannie Lewis, the present head of operations has been asked to take the duty in the near future. With challenges in the form of a potential social modification and reduced staff member spirits, the organization wants a full reengineering effort at the advertising and marketing department.

Trouble Statement
Porter's 5 Forces Analysis
The potential cultural change at the marketing division of Aes Corporation A Global Sourcing Initiative is enhancing uncertainty in the workplace leading to various difficulties for the Jeannie Lewis who would certainly be replacing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a major duty in influencing tactical decisions since Stapes Inc. had to desert its strategies of merging with Office Deport after the Federal Profession Compensation's intervention in the process. Given the truth that the store has a worldwide presence with branches in UK, U.S.A., Canada and Germany, political consider each of these countries may have the ability to influence performance or strategic objectives. Federal Trade Compensation's antitrust fit against the merging used up important time of the organization's elderly administration recommending that 'political' factors can have serious effects for a global service.

Economic Factors: Financial factors such as the development of small businesses in the global situation suggest that Aes Corporation A Global Sourcing Initiative is thriving in an atmosphere where there is possible development of businesses. Truth that shop consumers are mainly looking for office supplies for home offices recommends that the market has a climbing trend of entrepreneurs as well as house based services.

Social factors: Social trends in the economy reveal that clients are looking for convenience along with attractive rates. Market research demonstrates how the client for Aes Corporation A Global Sourcing Initiative lacks understanding about locating services which can supply a mix of ease as well as inexpensive.

Technical factors: Innovation plays a crucial function in Aes Corporation A Global Sourcing Initiative's company method specifically as the organization is piloting Innovation centers which would use technology sales and assistance in the form of memory upgrades, outer installations. (Summary of PARASITE in appendix 2).

OB Issues and also Effects.

A number of underlying Business Actions concerns can be seen in Aes Corporation A Global Sourcing Initiative's case as highlighted in this area.

Concerns about social modification: There is worry concerning a cultural adjustment that would take place when Todd Krasnow leaves from his placement as the Executive Vice Head Of State of Marketing with the majority of the employee currently showing unhappiness over this prospective action. This anticipated modification has developed tension in the office which has actually been combined with the previous stress and anxiety of preparing the firm for a prospective merger with House Deport.
Pest Analysis
Demanding Task Setting for Newcomers: There is lack of personnel that can match the stressful environment of a fast-paced organization. Not just does this cause difficulty in finding the appropriate people, it places stress on brand-new hires as can not hold up against the speed and also stress that the organization anticipates them to birth.

Twin Coverage Lines: Novices locate this business culture troublesome and also challenging to handle especially as populated line partnerships are meant to be weak generally as well as objective setting and also efficiency examination is still done by the solid line manager. This implies that newbies could shed clearness concerning their particular duties as well as objectives specifically as populated line reporting does not keep them in straight interaction with the strong line supervisors.

Bitterness From Cross Departmental Hiring: Krasnow's decision to make Lewis his successor rather than Bridget Coles despite the fact that it had actually been hypothesized that the latter would take Krasnow's position came as a blow to her spirits. Lewis may have been qualified and also suitable for the job however the truth that Kransnow's departure would certainly make Coles a straight report to Lewis may have been the factor for Coles' resignation from solutions.

Fear & Work Instability: Anxiety and also insecurity can be identified as two significant worries that Lewis would certainly be handling especially as the merger has now be cancelled and also 2 senior executives of the advertising division would certainly be leaving. The entire obligation of the division would be dropping on Lewis's shoulders that would certainly not just supervise of brining regarding a social change however would certainly additionally have to confirm herself in her new role.

Inappropriate Management Style of Leader: Lewis's administration style as well as its incompatibility with the marketing department's function can likewise be viewed as an OB obstacle especially as she has actually been utilized to dealing with concerns in the operations department where workers are shown to concentrate on procedures as well as obtain them right. The advertising and marketing department on the various other hand can be seen as a group of people that are utilized to being supported by Krasnow who concentrated extra on result than procedures.

Interdepartmental Disputes: Interdepartmental disagreements between 3 departments, advertising, merchandizing as well as operations specifically over the allocation of the advertising and marketing mix can be identified as one more OB worry. Although the advertising division does not share the same vision as the other 2 divisions pertaining to the aloocation of the advertising and marketing mix twoards promotions as well as advertsing, the merchandizing and operations departments do not agree over the advertising mix appropriation amongst each other either.

Disintegration in Advertising And Marketing Division: Fragmentation between the advertising and marketing departments can be recognized as another OB concern which might need further attention. The reality that the marketing and advertising areas in the marketing department are detached is preventing both departments from acquiring from each various other's experience as well as know-how. Integration of advertising with retailing and also operations would certainly come to be more difficult if the marketing division itself is broken down which can be one more possible OB worry.

Aes Corporation A Global Sourcing Initiative Analysis

Various theories have been used to explain the circumstances to get more quality regarding the situation available.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Theory X, many supervisors think that juniors are passive and careless, have little ambition and also withstand modification. The scenario at Aes Corporation A Global Sourcing Initiative is not completely complying with Concept X, it can be seen that new hires are finding this atmosphere instead demanding which might eventually lead to a greater inclination of the management towards Theory X. Even while analyzing Lewis's administration style, theory X might have been appropriate in the operations division to some extent yet the Marketing department would certainly require dependence on Concept Y in order to get the creativity as well as originality from the teams.

Tuckman's Team effort Concept: Regarding Lewis's problem regarding bringing consistency between the marketing and advertising department is concerned, this would initially lead to contrast as talked about by Bruce Tuckman in his 'Synergy Theory'. (Tuckman, 1965). As per Tuckman's theory received appendix 3, throughout the first phase of team advancement, people may not bond, as they are active discovering their location in the team. By combining the advertising and marketing division's work, there may be the same initial disconnect which could lead to the second stage of 'storming' where the groups challenge each other. It is only throughout the third phase or 'norming' when they would come together to share ideas before the team can bring about harmony in the 4th stage 'doing'.

Bridges' Change Model: According To William Bridge's concept (appendix 4), individuals are rather uneasy with modification, which is obvious by the situation at Aes Corporation A Global Sourcing Initiative The scenario can be viewed as a normal program of life if is examined according to Bridge's theory where he describes that individuals go through 3 phases of shift when they experience change. 'Closing, shedding as well as Letting go', The Neutral Area and also 'The New Starting' (Bridges, 2004). When people exist with modification, they enter phase one therefore there may be emotions like despair, uncertainty, frustration, temper, anxiety, denial and disorientation.The situation at the advertising and marketing division of Aes Corporation A Global Sourcing Initiative is similar so Lewis can get comfy with the suggestion that it is not amazing habits. In the 2nd stage, there might be a demand to bridge the gap in between the brand-new as well as old culture so Lewis might need to encounter this challenge when Krasnow leaves. There might be reduced spirits as well as low performance at this stage which need to not be taken as a setback. It is during this phase that Lewis will need to give guidance to the division to make sure that they can find a sense of direction. It can be seen just how Krasnow has currently made this change much easier by making Lewis obtain associated with the division a year before his actual departure. According to Bridges' Model, phase 3 will certainly produce visibility to knowing, High power and commitment as people will certainly embrace the modification (Bridges, 2004).
Vrio Analysis
Maslow's Demand pecking order: The OB problem pertaining to instability at the work environment has been activated first of all by the change in management and secondly by the reality that the merger will certainly no longer be launched. Abraham Maslow in his Concept of 'Needs Power structure' (appendix 5) has goes over the importance of 'safety needs as being a reduced level demand of a human for triggering motivation. As seen in the pyramid shared in appendix 3, we can see how 'the need to really feel safe and secure and untouched' is at the second degree of demands. Before an employee can be made to establish mentally, he requires to have his 'Physiological 'as well as 'Safety and security' needs satisfied. This shows that unless the employees are made to feel safe and secure concerning their existing work standing in Aes Corporation A Global Sourcing Initiative they might not reach 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Aes Corporation A Global Sourcing Initiative Case Study

Implication of Analysis.

The OB analysis has checked out different theories to recognize just how to manage the existing scenario handy. The following 3 options have been recommended to assist Lewis manage the organizational difficulties in the marketing division. Each of these options has been proposed for relieving the shift needed to bring the advertising division according to the requirements of the market as well as for making the cultural change that would follow as soon as the existing leader leaves.

Combination of advertising and marketing features. Separating Adverting as well as Production features. Integration of Marketing with Operations.

Assessment of Alternatives.

Judith Shapiro who has earlier been talked to by Lewis throughout the earlier merger days has competence in business-to-business advertising along with firm and retail advertising and marketing experience. When Krasnow leaves, Lewis can work with Shapiro as an EVP for advertising to deal with both advertising as well as marketing features.

The advantage of this method is that it will certainly integrate the two functions while decreasing the need for hiring an extra resource for advertising. Lewis would be heading the advertising and marketing department and also in any type of case her substitute would be required for the current duty that she is executing. The disadvantage of this option is that exterior hiring might bring about bitterness from internal personnel who may be considering the placement of EVP after Lewis takes control of Krasnow's position.

Dividing Adverting and also Production: Offered the affordable pressures and high quality work needed from the ad agency, it is suggested that Lewis should enable the manufacturing device to be a separate function from the advertising and marketing device. Given that a lot of advertising agencies had these two features as different systems, it makes more sense to follow the norm. Along with this, both features may have the ability to concentrate on their core turns on more effectively. The negative aspect of this technique would certainly be that additional prices would have to be birthed for setting up different manufacturing features. In addition to this, a manufacturing head may have to be employed which might boost overheads for the organization.

Assimilation of Advertising with Operations: Given that Lewis is currently looking after the marketing as well as operations departments all at once; it makes good sense to incorporate both features given that she has been efficiently looking after both ends. The truth that the two departments already have significant differences over allocation of resources recommends that this combination may have the ability to cause consistency specifically as Lewis would be heading both ends.However there are different disadvantages of this relocation particularly as it would certainly put way too much concern over Lewis's shoulders. The fact that Lewis has to adjust her administration design for the advertising and marketing department recommends that these two departments would certainly be culturally varied. Lewis may not be able to use one type of leadership style to both divisions which can result in ineffectiveness in either one of the 2 functions.


An analysis of the 3 options shows that assimilation of advertising and procedures would not be a viable step due to the substantial distinctions between the 2 departments regardless of the fact that currently Lewis is taking care of both. While separation of the production function might have been a positive action for the advertising and marketing division, the reality that it would suggest positioning a 3rd feature under Lewis's wing means this ought to be stayed clear of.

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

Advertising and Marketing functions would certainly be merged.

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

Production function will remain part of marketing under advertising feature.

Lewis will certainly separate herself from operations.

A democratic management style with employee empowerment will certainly be utilized in advertising and marketing division.

Open up door policy and emphasis on cross department interaction will certainly be focused on removing discord.

Contingency strategy.

If the assimilation does not work out as prepared, a backup plan would comply with which would certainly separate the production feature from the advertising and marketing function to lower the lots on the SVP of marketing and advertising. In case Judith Shapiro does not get worked with, Lewis will certainly be heading the marketing division without an SVP. Because case the production function will certainly be divided by putting it under an SVP manufacturing.