Air Berlins Ipo Case Study Help


Home >> Harvard >> Air Berlins Ipo >>

Air Berlins Ipo Case Study Analysis

Background and Facts

Air Berlins Ipo an office materials retailer for small and also medium sized companies has just recently been involved in preparing for a merger with its competitor Residence Deport, which has impacted performance degrees in departmentswith the senior manager involved in legal problems put forth by the government Profession Commission. With the Advertising Head putting forward the information of his departure from the business in one year, Jeannie Lewis, the present head of operations has actually been asked to take the role in the future. With obstacles in the type of a possible social adjustment as well as reduced employee spirits, the company wants a full reengineering effort at the advertising and marketing division.

Problem Declaration
Porter's 5 Forces Analysis
The possible cultural adjustment at the marketing division of Air Berlins Ipo is enhancing uncertainty in the working environment resulting in numerous obstacles for the Jeannie Lewis who would be changing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a major duty in affecting tactical choices because Stapes Inc. had to abandon its strategies of merging with Office Deport after the Federal Trade Compensation's intervention at the same time. Offered 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 be able to influence efficiency or calculated objectives. Federal Trade Compensation's antitrust suit against the merging used up beneficial time of the organization's elderly monitoring recommending that 'political' factors can have significant effects for an international business.

Economic Factors: Economic factors such as the appearance of small companies in the worldwide situation suggest that Air Berlins Ipo is prospering in a setting where there is prospective development of businesses. Along with this, reality that shop customers are mostly seeking office materials for office recommends that the market has a rising trend of business owners and online businesses.

Social factors: Social patterns in the economic situation reveal that customers are searching for ease along with appealing rates. Market research shows how the consumer for Air Berlins Ipo does not have recognition about locating services which can supply a combination of ease and affordable.

Technical factors: Modern technology plays a crucial duty in Air Berlins Ipo's service approach particularly as the company is piloting Modern technology facilities which would provide modern technology sales and also support in the kind of memory upgrades, outer installations. (Recap of PARASITE in appendix 2).

OB Issues and also Manifestations.

A number of underlying Business Behavior problems can be seen in Air Berlins Ipo's case as highlighted in this area.

Worries regarding cultural adjustment: There is apprehension concerning a cultural change that would certainly take place once Todd Krasnow leaves from his placement as the Exec Vice President of Advertising And Marketing with most of the personnel already showing unhappiness over this possible step. This expected adjustment has actually produced anxiety in the work environment which has actually been combined with the past stress and anxiety of preparing the firm for a prospective merger with House Deport.
Pest Analysis
Stressful Job Setting for Newcomers: There is shortage of employees that can match the demanding environment of a busy organization. Not just does this lead to problem in locating the ideal people, it puts tension on new hires as can not endure the pace as well as pressure that the company expects them to bear.

Dual Coverage Lines: Newbies discover this organizational culture troublesome and also challenging to deal with particularly as dotted line relationships are implied to be weaker in general as well as objective setting as well as efficiency assessment is still done by the solid line supervisor. This suggests that novices could lose quality regarding their corresponding functions and objectives specifically as populated line reporting does not keep them in direct interaction with the solid line managers.

Bitterness From Cross Departmental Hiring: Krasnow's choice to make Lewis his successor rather than Bridget Coles despite the fact that it had actually been guessed that the last would take Krasnow's setting came as a strike to her spirits. Lewis might have been qualified and also appropriate for the job however the fact that Kransnow's departure would make Coles a direct report to Lewis might have been the reason for Coles' resignation from services.

Fear & Work Instability: Worry and instability can be identified as 2 significant problems that Lewis would certainly be dealing with particularly as the merging has now be cancelled as well as two senior execs of the advertising division would certainly be leaving. The entire duty of the division would be dropping on Lewis's shoulders who would not just be in charge of brining regarding a cultural adjustment but would certainly additionally have to confirm herself in her brand-new role.

Incompatible Monitoring Design of Leader: Lewis's administration style and also its conflict with the advertising division's function can additionally be viewed as an OB challenge especially as she has actually been used to dealing with problems in the operations division where personnel are taught to concentrate on procedures as well as obtain them right. The marketing division on the other hand can be viewed as a group of individuals that are used to being nurtured by Krasnow that focused extra on result than processes.

Interdepartmental Disagreements: Interdepartmental differences between 3 departments, advertising and marketing, merchandizing and also procedures specifically over the allowance of the advertising mix can be determined as one more OB issue. Although the advertising division does not share the exact same vision as the various other 2 departments pertaining to the aloocation of the advertising mix twoards promos and also advertsing, the merchandizing and operations departments do not concur over the advertising mix allowance among each other either.

Disintegration in Marketing Division: Fragmentation between the advertising and marketing divisions can be identified as another OB concern which can need additional focus. The fact that the marketing and advertising sections in the advertising and marketing division are separated is protecting against both departments from getting from each various other's experience and also expertise. Combination of marketing with retailing and procedures would certainly end up being harder if the advertising and marketing division itself is disintegrated which can be one more potential OB issue.

Air Berlins Ipo Analysis

Various concepts have actually been made use of to explain the scenarios to get further clearness concerning the scenario at hand.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, the majority of managers believe that subordinates are passive and lazy, have little ambition and resist adjustment. The scenario at Air Berlins Ipo is not totally following Concept X, it can be seen that new hires are finding this setting rather difficult which might ultimately lead to a higher disposition of the administration in the direction of Theory X. Also while examining Lewis's monitoring style, theory X might have been suitable in the procedures division to some degree however the Marketing department would certainly need dependence on Theory Y in order to get the creativity as well as originality from the groups.

Tuckman's Team effort Concept: Regarding Lewis's problem concerning bringing harmony between the marketing and advertising department is concerned, this would initially bring about conflict as reviewed by Bruce Tuckman in his 'Team effort Concept'. (Tuckman, 1965). According to Tuckman's theory displayed in appendix 3, during the preliminary phase of group growth, people might not bond, as they are busy finding their area in the group. By integrating the marketing and advertising division's work, there may be the same initial disconnect which might result in the 2nd stage of 'storming' where the groups test each other. Nevertheless, it is only throughout the third stage or 'norming' when they would certainly come together to share ideas before the team can cause synergy in the 4th phase 'carrying out'.

Bridges' Change Design: Based On William Bridge's theory (appendix 4), individuals are quite unpleasant with change, which is obvious by the situation at Air Berlins Ipo The scenario can be seen as a normal training course of life if is studied according to Bridge's concept where he clarifies that people undergo 3 stages of change when they experience modification. 'Ending, losing and Letting go', The Neutral Area and 'The New Beginning' (Bridges, 2004). When individuals exist with change, they go into phase one and so there might be emotions like sadness, unpredictability, frustration, anger, concern, denial as well as disorientation.The scenario at the advertising department of Air Berlins Ipo is similar so Lewis can get comfy with the idea that it is not extraordinary actions. In the second stage, there might be a need to connect the void in between the new and old culture so Lewis might need to face this experience once Krasnow leaves. There may be reduced spirits and also low efficiency at this phase which need to not be taken as a setback. It is throughout this stage that Lewis will certainly need to provide support to the division to ensure that they can locate an orientation. It can be seen exactly how Krasnow has actually already made this transition simpler by making Lewis obtain involved in the department a year prior to his actual separation. As per Bridges' Design, phase three will bring about openness to discovering, High power and also commitment as people will accept the modification (Bridges, 2004).
Vrio Analysis
Maslow's Requirement hierarchy: The OB concern pertaining to insecurity at the office has actually been activated to start with by the modification in management and also secondly by the fact that the merger will no longer be initiated. Abraham Maslow in his Theory of 'Requirements Pecking order' (appendix 5) has goes over the value of 'security needs as being a lower degree requirement of a human for triggering motivation. As seen in the pyramid cooperated appendix 3, we can see how 'the requirement to feel secure and also out of danger' goes to the second degree of demands. Before a worker can be made to develop mentally, he requires to have his 'Physiological 'and 'Safety' requires satisfied. This suggests that unless the workers are made to really feel safe about their existing employment condition in Air Berlins Ipo they might not reach 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Air Berlins Ipo Case Study

Ramification of Analysis.

The OB analysis has considered numerous concepts to recognize just how to handle the existing circumstance available. The adhering to 3 options have been proposed to assist Lewis handle the organizational challenges in the marketing department. Each of these alternatives has actually been suggested for reducing the transition needed to bring the marketing division in line with the needs of the market and also for making the social change that would certainly adhere to once the present leader leaves.

Combination of advertising and marketing functions. Dividing Adverting and also Production functions. Combination of Marketing with Operations.

Analysis of Alternatives.

Judith Shapiro that has earlier been spoken with by Lewis during the earlier merging days has know-how in business-to-business marketing along with firm as well as retail advertising and marketing experience. When Krasnow leaves, Lewis can work with Shapiro as an EVP for marketing to take care of both marketing and advertising features.

The advantage of this approach is that it will certainly integrate the two functions while reducing the demand for hiring an additional source for advertising and marketing. Lewis would certainly be heading the marketing division and in any kind of case her substitute would be needed for the existing duty that she is doing. The downside of this option is that external hiring might produce bitterness from inner personnel who may be looking at the placement of EVP after Lewis takes control of Krasnow's position.

Separating Adverting and also Production: Provided the competitive stress and high quality work needed from the marketing agency, it is advised that Lewis ought to enable the manufacturing unit to be a separate function from the advertising device. Given that most advertising and marketing companies had these 2 functions as separate systems, it makes more sense to comply with the norm.

Combination of Advertising And Marketing with Operations: Since Lewis is currently dealing with the marketing as well as operations departments at the same time; it makes sense to integrate both features given that she has been efficiently looking after both ends. The truth that both departments currently have significant differences over appropriation of sources suggests that this assimilation may be able to produce harmony particularly as Lewis would be heading both ends.However there are different drawbacks of this relocation specifically as it would certainly put way too much problem over Lewis's shoulders. The reality that Lewis has to adjust her monitoring design for the advertising department suggests that these two departments would be culturally varied. Along with this, Lewis may not be able to apply one kind of management style to both divisions which could result in ineffectiveness in either among the two features.


An evaluation of the 3 alternatives indicates that assimilation of advertising and marketing as well as operations would certainly not be a possible step due to the large differences between the 2 divisions despite the truth that currently Lewis is taking care of both. While splitting up of the production function might have been a positive action for the advertising and marketing division, the fact that it would certainly mean placing a 3rd feature under Lewis's wing indicates this should be prevented.

Activity Strategy.
Lewis will take control of the function of EVP Advertising after Krasnow leaves.

Advertising and Marketing features would certainly be combined.

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

Production feature will remain part of advertising under advertising function.

Lewis will certainly divide herself from operations.

A democratic management style with staff member empowerment will be used in marketing department.

Open door policy as well as emphasis on cross departmental interaction will certainly be focused on removing dissonance.

Backup strategy.

If the assimilation does not exercise as planned, a contingency strategy would comply with which would certainly separate the production function from the advertising and marketing feature to reduce the lots on the SVP of advertising and marketing. In case Judith Shapiro does not get employed, Lewis will certainly be heading the marketing division without an SVP. Because case the production function will most definitely be separated by positioning it under an SVP manufacturing.