Menu

Bear Stearns And The Seeds Of Its Demise Case Study Analysis

CASE SOLUTION

Home >> Harvard >> Bear Stearns And The Seeds Of Its Demise >>

Bear Stearns And The Seeds Of Its Demise Case Study Help

Background and Facts

Bear Stearns And The Seeds Of Its Demise an office materials retailer for tiny and medium sized organisations has just recently been involved in planning for a merger with its competitor House Deport, which has impacted effectiveness degrees in departmentswith the senior supervisor involved in lawful complications presented by the government Trade Compensation. With the Marketing Head advancing the news of his departure from the company in one year, Jeannie Lewis, the current head of operations has been asked to take the role in the near future. With obstacles in the kind of a possible cultural adjustment as well as low staff member spirits, the organization requires a total reengineering initiative at the marketing department.

Trouble Declaration
Porter's 5 Forces Analysis
The possible social modification at the marketing division of Bear Stearns And The Seeds Of Its Demise is boosting unpredictability 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 role in affecting critical decisions considering that Stapes Inc. needed to abandon its plans of combining with Office Deport after the Federal Trade Commission's treatment while doing so. Offered the fact that the shop has a global existence with branches in UK, USA, Canada and Germany, political consider each of these countries might be able to influence performance or critical objectives. Federal Profession Payment's antitrust suit versus the merging used up valuable time of the organization's elderly monitoring recommending that 'political' factors can have serious effects for an international organisation.

Economic Factors: Economic factors such as the emergence of small companies in the global situation suggest that Bear Stearns And The Seeds Of Its Demise is growing in an atmosphere where there is prospective development of companies. In addition to this, truth that store consumers are mainly trying to find workplace supplies for home offices recommends that the market has a climbing fad of entrepreneurs as well as online organisations.

Social factors: Social patterns in the economic climate show that clients are searching for ease in addition to attractive prices. Marketing research shows how the customer for Bear Stearns And The Seeds Of Its Demise does not have recognition concerning finding remedies which can provide a mix of benefit as well as inexpensive.

Technical factors: Modern technology plays a vital duty in Bear Stearns And The Seeds Of Its Demise's business approach especially as the organization is piloting Modern technology centers which would certainly provide innovation sales and assistance in the kind of memory upgrades, peripheral setups. (Recap of INSECT in appendix 2).

OB Issues as well as Manifestations.

Numerous underlying Organizational Actions concerns can be seen in Bear Stearns And The Seeds Of Its Demise's case as highlighted in this area.

Worries concerning cultural adjustment: There is apprehension concerning a cultural adjustment that would happen when Todd Krasnow leaves from his position as the Exec Vice President of Advertising And Marketing with the majority of the staff members currently revealing unhappiness over this prospective step. This expected adjustment has created tension in the work environment which has actually been coupled with the past stress and anxiety of preparing the company for a possible merger with Home Deport.
Pest Analysis
Demanding Job Setting for Newcomers: There is lack of personnel that can match the difficult environment of a busy company. Not only does this result in trouble in discovering the ideal individuals, it puts tension on new hires as can not hold up against the pace and also stress that the organization expects them to birth.

Twin Coverage Lines: Novices discover this organizational society cumbersome and also tough to handle especially as dotted line relationships are indicated to be weaker generally as well as unbiased setup as well as efficiency analysis is still done by the strong line manager. This implies that novices can lose quality about their corresponding functions and purposes especially as populated line reporting does not keep them in straight communication with the solid line supervisors.

Bitterness From Cross Departmental Hiring: Krasnow's decision to make Lewis his successor as opposed to Bridget Coles although it had been hypothesized that the last would take Krasnow's setting came as an impact to her morale. Lewis might have been qualified and appropriate for the job but the fact that Kransnow's separation would make Coles a direct report to Lewis might have been the reason for Coles' resignation from solutions.

Concern & Work Insecurity: Fear and insecurity can be recognized as 2 major concerns that Lewis would certainly be taking care of specifically as the merging has actually now be cancelled and 2 senior executives of the advertising department would certainly be leaving. The entire duty of the department would be dropping on Lewis's shoulders that would not simply be in charge of brining regarding a cultural modification yet would certainly additionally need to prove herself in her brand-new duty.

Incompatible Monitoring Design of Leader: Lewis's management style and also its conflict with the advertising department's duty can likewise be seen as an OB difficulty specifically as she has actually been made use of to taking care of concerns in the operations division where employees are shown to focus on processes and also get them. The advertising and marketing department on the various other hand can be seen as a team of people who are utilized to being supported by Krasnow that focused much more on result than processes.

Interdepartmental Differences: Interdepartmental disputes between three departments, marketing, merchandizing and operations specifically over the appropriation of the advertising and marketing mix can be determined as an additional OB concern. The advertising division does not share the very same vision as the various other two departments regarding the aloocation of the marketing mix twoards promotions as well as advertsing, the merchandizing and operations divisions do not concur over the advertising mix appropriation amongst one another either.

Disintegration in Marketing Department: Disintegration between the marketing and advertising departments can be identified as one more OB issue which can require more attention. The fact that the marketing and advertising sections in the advertising division are separated is preventing both departments from acquiring from each other's experience and expertise. Integration of advertising and marketing with merchandising as well as procedures would certainly become more difficult if the advertising and marketing division itself is disintegrated which can be one more potential OB issue.

Bear Stearns And The Seeds Of Its Demise Analysis

Different theories have actually been utilized to clarify the circumstances to get more clarity concerning the situation available.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Theory X, a lot of supervisors believe that juniors are passive as well as lazy, have little ambition as well as withstand modification. The hard version of this theory emphasized threat, limited controls, hazards and penalties. With time it produces low efficiency, refined sabotage and rivalry (Deal, 2003). The circumstance at Bear Stearns And The Seeds Of Its Demise is not totally following Concept X, it can be seen that brand-new hires are finding this atmosphere rather difficult which may eventually lead to a greater inclination of the management in the direction of Theory X. As per McGregor's advocated view, which he called Concept Y, the necessary task of the monitoring is to arrange organizational conditions to ensure that people can achieve their own objectives best by routing their efforts in the direction of organizational benefits. If people discover no contentment in their job, the monitoring would have little choice but to rely on concept X and exterior control (Offer, 2003). Even while examining Lewis's monitoring design, concept X might have appropriated in the operations division to some extent but the Advertising and marketing division would certainly need dependence on Theory Y to get the creativity and creativity from the teams.

Tuckman's Teamwork Theory: As far as Lewis's issue about bringing consistency between the marketing and advertising division is worried, this would at first bring about contrast as gone over by Bruce Tuckman in his 'Synergy Theory'. (Tuckman, 1965). Based on Tuckman's concept received appendix 3, during the preliminary phase of group advancement, individuals may not bond, as they are active locating their area in the group. By integrating the advertising and marketing department's work, there might be the same preliminary detach which can cause the second stage of 'storming' where the teams test each other. Nevertheless, it is only during the 3rd phase or 'norming' when they would integrate to share suggestions before the team can produce synergy in the fourth phase 'doing'.

Bridges' Shift Model: Based On William Bridge's theory (appendix 4), individuals are fairly unpleasant with change, which is apparent by the circumstance at Bear Stearns And The Seeds Of Its Demise The situation can be viewed as a regular course of life if is examined according to Bridge's theory where he discusses that individuals undergo 3 stages of shift when they experience adjustment. 'Ending, losing and Releasing', The Neutral Zone and also 'The New Beginning' (Bridges, 2004). When individuals are presented with adjustment, they enter phase one therefore there might be emotions like sadness, uncertainty, aggravation, rage, worry, denial as well as disorientation.The scenario at the advertising department of Bear Stearns And The Seeds Of Its Demise is comparable so Lewis can obtain comfy with the idea that it is not phenomenal actions. In the second stage, there may be a requirement to link the space in between the brand-new as well as old culture so Lewis might have to face this ordeal once Krasnow leaves. There might be low morale and low performance at this stage which need to not be taken as an obstacle. It is throughout this phase that Lewis will need to provide assistance to the division to ensure that they can discover an orientation. It can be seen exactly how Krasnow has actually currently made this transition easier by making Lewis obtain associated with the department a year before his actual departure. Based on Bridges' Design, stage 3 will bring about visibility to knowing, High power as well as commitment as people will certainly accept the modification (Bridges, 2004).
Vrio Analysis
Abraham Maslow in his Theory of 'Needs Pecking order' (appendix 5) has discusses the relevance of 'protection requires as being a lower degree demand of a human for triggering motivation. As seen in the pyramid shared in appendix 3, we can see exactly how 'the demand to really feel safe and secure and also out of risk' is at the second level of needs. Before a staff member can be made to create mentally, he requires to have his 'Physiological 'and also 'Security' needs fulfilled.

SWOT Analysis for Bear Stearns And The Seeds Of Its Demise Case Study



Effects of Analysis.

The OB analysis has actually checked out numerous theories to comprehend how to cope with the existing scenario at hand. The following 3 options have been proposed to aid Lewis deal with the business difficulties in the advertising division. Each of these alternatives has been suggested for relieving the shift needed to bring the marketing department in accordance with the demands of the market and also for making the social adjustment that would follow as soon as the current leader leaves.

Combination of advertising and marketing features. Dividing Adverting as well as Manufacturing functions. Assimilation of Marketing with Procedures.

Examination of Alternatives.

Judith Shapiro that has earlier been interviewed by Lewis during the earlier merging days has competence in business-to-business advertising and marketing along with agency and retail advertising experience. As soon as Krasnow leaves, Lewis can hire Shapiro as an EVP for advertising and marketing to manage both advertising as well as advertising and marketing features.

The benefit of this method is that it will certainly integrate both functions while lowering the requirement for working with an additional source for marketing. Lewis would be heading the advertising division and in any type of case her replacement would certainly be required for the current role that she is doing. The drawback of this option is that outside hiring may cause bitterness from interior personnel that might be considering the setting of EVP after Lewis takes control of Krasnow's position.

Separating Adverting and Manufacturing: Offered the competitive stress and high top quality work needed from the marketing agency, it is suggested that Lewis needs to enable the manufacturing unit to be a separate function from the marketing unit. Considering that a lot of advertising companies had these two features as separate systems, it makes more sense to follow the norm.

Integration of Advertising with Procedures: Because Lewis is currently taking care of the advertising and marketing as well as operations departments all at once; it makes sense to incorporate the 2 functions because she has been efficiently taking care of both ends. The reality that Lewis has to adapt her monitoring style for the marketing division suggests that these 2 departments would be culturally diverse.

Recommendation.



An assessment of the 3 alternatives indicates that assimilation of advertising as well as procedures would not be a possible action due to the substantial differences in between the two divisions regardless of the reality that currently Lewis is taking care of both. While separation of the production feature may have been a favorable relocation for the advertising and marketing department, the fact that it would certainly imply positioning a 3rd feature under Lewis's wing means this must be prevented.

Activity Strategy.
Recommendation
Lewis will certainly take control of the role of EVP Advertising after Krasnow leaves.

Marketing and advertising functions would be merged.

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

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

Lewis will separate herself from operations.

A democratic leadership design with staff member empowerment will certainly be utilized in advertising and marketing division.

Open up door plan and emphasis on cross department communication will be targeted at removing disharmony.

Backup strategy.

If the assimilation does not exercise as intended, a backup plan would comply with which would certainly separate the manufacturing function from the advertising and marketing function to decrease the lots on the SVP of advertising and marketing. In case Judith Shapiro does not obtain hired, Lewis will be heading the advertising and marketing department without an SVP. Because case the manufacturing feature will most definitely be divided by putting it under an SVP production.