Air Canada Risk Management Case Study Analysis


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Air Canada Risk Management Case Study Solution

Background and Facts

Air Canada Risk Management a workplace products seller for little and also moderate sized companies has just recently been associated with preparing for a merging with its rival Residence Deport, which has impacted effectiveness levels in departmentswith the elderly manager associated with lawful problems presented by the government Profession Commission. With the Marketing Head putting forward the information of his departure from the company in one year, Jeannie Lewis, the current head of operations has actually been asked to take the duty in the near future. With obstacles in the kind of a potential social adjustment and also low worker morale, the organization needs a full reengineering effort at the marketing division.

Problem Declaration
Porter's 5 Forces Analysis
The prospective social change at the marketing division of Air Canada Risk Management is increasing uncertainty in the workplace resulting in different difficulties for the Jeannie Lewis who would be replacing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant role in impacting critical choices since Stapes Inc. had to desert its plans of combining with Office Deport after the Federal Trade Commission's intervention in the process. Offered the fact that the shop has an international existence with branches in UK, UNITED STATES, Canada and Germany, political factors in each of these countries might be able to impact performance or critical objectives. Federal Trade Commission's antitrust match against the merger used up useful time of the organization's senior management suggesting that 'political' factors can have major implications for a global organisation.

Economic Factors: Economic factors such as the development of small companies in the international circumstance suggest that Air Canada Risk Management is flourishing in an atmosphere where there is possible growth of organisations. Fact that store clients are mostly looking for office materials for residence workplaces recommends that the market has a rising trend of entrepreneurs and home based businesses.

Social factors: Social fads in the economic climate reveal that customers are searching for benefit along with attractive prices. Marketing research demonstrates how the customer for Air Canada Risk Management lacks awareness regarding locating services which can provide a combination of convenience and also affordable.

Technical factors: Technology plays an important duty in Air Canada Risk Management's service method particularly as the company is piloting Technology centers which would certainly use technology sales as well as support in the kind of memory upgrades, peripheral setups. (Summary of PEST in appendix 2).

OB Issues as well as Symptoms.

Several underlying Business Behavior concerns can be seen in Air Canada Risk Management's case as highlighted in this section.

Apprehensions concerning cultural modification: There is apprehension regarding a social change that would take place as soon as Todd Krasnow leaves from his setting as the Exec Vice President of Advertising with most of the team member currently showing discontent over this prospective move. This anticipated adjustment has actually developed stress and anxiety in the office which has been combined with the past anxiety of preparing the firm for a possible merger with House Deport.
Pest Analysis
Difficult Task Atmosphere for Newcomers: There is shortage of personnel that can match the stressful setting of a hectic company. Not only does this cause trouble in locating the right people, it puts tension on new hires as can not withstand the pace and also pressure that the company expects them to birth.

Dual Reporting Lines: Novices discover this business society difficult as well as tough to manage specifically as populated line relationships are meant to be weaker as a whole as well as unbiased setup and also efficiency assessment is still done by the strong line supervisor. This implies that beginners might shed quality concerning their particular functions and also goals specifically as populated line reporting does not keep them in direct communication with the solid line supervisors.

Bitterness From Cross Departmental Hiring: Krasnow's choice to make Lewis his successor instead of Bridget Coles although it had been speculated that the last would certainly take Krasnow's position came as an impact to her morale. Lewis might have been capable and ideal for the task but the reality that Kransnow's departure would make Coles a straight record to Lewis may have been the reason for Coles' resignation from services.

Concern & Job Instability: Anxiety and also instability can be identified as two major issues that Lewis would be dealing with specifically as the merging has now be cancelled and also two senior executives of the advertising division would be leaving. The entire responsibility of the division would be dropping on Lewis's shoulders who would certainly not just supervise of brining about a cultural change but would certainly likewise need to show herself in her brand-new duty.

Incompatible Management Design of Leader: Lewis's management design as well as its incompatibility with the advertising division's duty can likewise be seen as an OB difficulty particularly as she has been utilized to dealing with issues in the operations department where personnel are taught to concentrate on processes and also get them. The marketing department on the various other hand can be seen as a group of individuals who are used to being nurtured by Krasnow that focused much more on output than procedures.

Interdepartmental Disputes: Interdepartmental differences between 3 divisions, advertising, merchandizing and also procedures specifically over the allotment of the advertising and marketing mix can be identified as one more OB problem. Although the marketing department does not share the same vision as the other 2 departments concerning the aloocation of the advertising and marketing mix twoards promos and advertsing, the merchandizing and procedures divisions do not agree over the advertising mix allowance among one another either.

Disintegration in Advertising Division: Disintegration between the advertising and marketing divisions can be determined as one more OB problem which might need more attention. The fact that the marketing and advertising sections in the marketing department are separated is protecting against both departments from getting from each other's experience and also knowledge. Combination of marketing with merchandising and also operations would become harder if the marketing department itself is disintegrated which can be one more possible OB concern.

Air Canada Risk Management Analysis

Different theories have actually been made use of to discuss the situations to get further quality concerning the circumstance at hand.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, many managers think that juniors are easy and careless, have little passion as well as withstand modification. The circumstance at Air Canada Risk Management is not completely adhering to Theory X, it can be seen that new hires are locating this atmosphere instead demanding which may ultimately lead to a higher disposition of the administration towards Concept X. Even while evaluating Lewis's management design, theory X may have been ideal in the operations division to some degree however the Advertising and marketing division would call for dependence on Theory Y in order to obtain the creativity and originality from the teams.

Tuckman's Teamwork Theory: As far as Lewis's worry concerning bringing consistency in between the advertising and marketing and also advertising and marketing division is worried, this would at first lead to clash as reviewed by Bruce Tuckman in his 'Synergy Theory'. By incorporating the marketing and also advertising department's job, there may be the exact same first separate which can lead to the second stage of 'storming' where the teams test one an additional.

Bridges' Shift Version: As per William Bridge's theory (appendix 4), people are rather awkward with adjustment, which is apparent by the situation at Air Canada Risk Management The situation can be viewed as a normal training course of life if is researched as per Bridge's theory where he discusses that individuals go through 3 stages of change when they experience adjustment. 'End, losing and also Letting go', The Neutral Area and also 'The New Beginning' (Bridges, 2004). When individuals are presented with adjustment, they go into phase one and so there might be emotions like sadness, unpredictability, stress, temper, anxiety, denial as well as disorientation.The circumstance at the advertising department of Air Canada Risk Management is similar so Lewis can get comfortable with the idea that it is not phenomenal habits. In the second stage, there may be a requirement to link the space between the new as well as old culture so Lewis might need to encounter this challenge once Krasnow leaves. There may be low morale as well as reduced efficiency at this phase which should not be taken as an obstacle. It is during this stage that Lewis will certainly need to give guidance to the department to make sure that they can find an orientation. It can be seen just how Krasnow has already made this shift much easier by making Lewis get involved in the division a year before his actual departure. As per Bridges' Version, stage three will bring about openness to knowing, High energy and commitment as individuals will certainly accept the adjustment (Bridges, 2004).
Vrio Analysis
Maslow's Requirement pecking order: The OB issue pertaining to insecurity at the workplace has actually been triggered firstly by the adjustment in management and also second of all by the fact that the merger will certainly no more be initiated. Abraham Maslow in his Concept of 'Needs Hierarchy' (appendix 5) has reviews the importance of 'protection needs as being a lower degree demand of a human for triggering motivation. As seen in the pyramid cooperated appendix 3, we can see just how 'the need to feel secure as well as unharmed' goes to the second level of requirements. Prior to a staff member can be made to establish mentally, he needs to have his 'Physiological 'as well as 'Security' needs fulfilled. This suggests that unless the workers are made to feel safe concerning their present employment status in Air Canada Risk Management they might not get to 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Air Canada Risk Management Case Study

Ramification of Analysis.

The OB analysis has looked at numerous concepts to understand exactly how to handle the current situation at hand. The complying with 3 alternatives have actually been suggested to aid Lewis deal with the organizational challenges in the advertising division. Each of these choices has been proposed for easing the shift needed to bring the advertising and marketing department in line with the requirements of the marketplace and also for making the cultural modification that would adhere to as soon as the existing leader leaves.

Assimilation of advertising and marketing functions. Separating Adverting as well as Manufacturing functions. Combination of Marketing with Operations.

Assessment of Alternatives.

Assimilation of Advertising And Marketing & Advertising And Marketing Functions: The in-house advertising firm of Air Canada Risk Management is currently strength for the company in regards to conserving up on expenses associated with marketing and promo. Given that no brand-new recruitment has been done after Bridget Cole's separation with the reporting line being directly appointed to Krasnow for the marketing feature, this is a beneficial possibility for incorporating the advertising and marketing functions. Judith Shapiro that has earlier been talked to by Lewis during the earlier merging days has proficiency in business-to-business advertising and marketing in addition to agency as well as retail marketing experience. When Krasnow leaves, Lewis can work with Shapiro as an EVP for advertising to manage both marketing and advertising functions.

The advantage of this strategy is that it will incorporate the two features while minimizing the requirement for employing an extra resource for marketing. Along with this, Lewis would certainly be heading the marketing division as well as regardless her replacement would be required for the present function that she is performing. The negative aspect of this alternative is that exterior hiring might cause resentment from interior personnel who may be considering the position of EVP after Lewis takes control of Krasnow's placement.

Separating Adverting and also Production: Offered the competitive pressures and premium quality work needed from the advertising agency, it is advised that Lewis should permit the production device to be a separate function from the marketing unit. Since a lot of ad agency had these two functions as different devices, it makes more feeling to comply with the norm. In addition to this, both functions might be able to concentrate on their core triggers extra efficiently. Nonetheless, the negative aspect of this strategy would certainly be that extra expenses would need to be birthed for establishing separate production features. Along with this, a production head might need to be employed which could boost overheads for the organization.

Combination of Advertising And Marketing with Procedures: Given that Lewis is currently looking after the marketing as well as procedures departments simultaneously; it makes good sense to integrate the two features given that she has actually been efficiently taking care of both ends. The fact that both divisions already have major differences over appropriation of sources recommends that this assimilation might be able to produce consistency especially as Lewis would be heading both ends.However there are numerous drawbacks of this relocation particularly as it would certainly place excessive problem over Lewis's shoulders. The truth that Lewis needs to adapt her management design for the advertising department recommends that these two divisions would be culturally diverse. Along with this, Lewis may not have the ability to use one type of management style to both departments which can lead to inadequacy in either one of both functions.


An assessment of the three alternatives indicates that integration of marketing and also procedures would certainly not be a possible move due to the vast distinctions between the two departments despite the fact that currently Lewis is managing both. While splitting up of the manufacturing feature may have been a positive move for the marketing division, the reality that it would certainly suggest putting a third function under Lewis's wing indicates this ought to be prevented.

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

Marketing and advertising functions would be combined.

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

Manufacturing function will certainly continue to be part of advertising and marketing under marketing function.

Lewis will certainly divide herself from operations.

A democratic leadership style with worker empowerment will be made use of in advertising and marketing division.

Open up door plan and emphasis on cross department communication will be focused on removing dissonance.

Contingency strategy.

If the integration does not exercise as prepared, a contingency strategy would certainly follow which would separate the production feature from the advertising and marketing feature to lower the lots on the SVP of advertising and marketing. In case Judith Shapiro does not obtain worked with, Lewis will certainly be heading the advertising department without an SVP. Because case the production function will certainly be separated by positioning it under an SVP production.