Chestnut Foods Case Study Analysis


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Chestnut Foods Case Study Solution

Background and Facts

Chestnut Foods a workplace materials store for small and also moderate sized services has actually just recently been associated with preparing for a merging with its competitor Residence Deport, which has affected efficiency degrees in departmentswith the elderly supervisor involved in lawful difficulties presented by the government Profession Compensation. With the Advertising Head advancing the information 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 future. With obstacles in the kind of a possible cultural adjustment and also reduced staff member spirits, the organization wants a full reengineering initiative at the advertising department.

Trouble Statement
Porter's 5 Forces Analysis
The prospective cultural adjustment at the advertising and marketing department of Chestnut Foods is raising unpredictability in the workplace leading to numerous obstacles for the Jeannie Lewis who would certainly be replacing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a major duty in affecting calculated decisions considering that Stapes Inc. needed to desert its strategies of combining with Workplace Deport after the Federal Profession Payment's intervention while doing so. Given the truth that the store has a global presence with branches in UK, USA, Canada as well as Germany, political factors in each of these countries might have the ability to impact efficiency or calculated goals. Federal Profession Compensation's antitrust fit versus the merging took up valuable time of the organization's senior administration recommending that 'political' factors can have significant ramifications for a worldwide business.

Economic Factors: Economic factors such as the appearance of small businesses in the international circumstance recommend that Chestnut Foods is flourishing in an atmosphere where there is possible growth of businesses. Reality that store clients are mostly looking for office supplies for residence workplaces recommends that the market has an increasing fad of business owners and house based organisations.

Social factors: Social trends in the economic situation reveal that clients are searching for comfort along with appealing rates. Market research shows how the consumer for Chestnut Foods lacks awareness regarding locating options which can supply a mix of benefit and also affordable.

Technical factors: Technology plays an essential duty in Chestnut Foods's company strategy specifically as the company is piloting Innovation centers which would certainly provide technology sales and support in the kind of memory upgrades, peripheral setups. (Recap of PEST in appendix 2).

OB Issues and Effects.

A number of underlying Organizational Habits concerns can be seen in Chestnut Foods's case as highlighted in this section.

Worries concerning cultural modification: There is uneasiness about a social change that would occur once Todd Krasnow leaves from his placement as the Executive Vice President of Advertising with most of the team member already revealing unhappiness over this possible relocation. This anticipated modification has developed stress in the workplace which has been combined with the past stress of preparing the company for a possible merging with Residence Deport.
Pest Analysis
Stressful Work Setting for Newcomers: There is shortage of employees that can match the difficult atmosphere of a hectic organization. Not just does this lead to difficulty in discovering the ideal individuals, it puts stress on brand-new hires as can not endure the speed and stress that the organization expects them to birth.

Dual Coverage Lines: Beginners discover this organizational society troublesome as well as hard to cope with particularly as populated line partnerships are indicated to be weaker in general as well as unbiased setting and efficiency analysis is still done by the solid line supervisor. This indicates that newcomers could shed clearness regarding their particular functions and also purposes specifically as populated line coverage 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 as opposed to Bridget Coles despite the fact that it had been guessed that the latter would take Krasnow's setting came as a strike to her spirits. Lewis may have been capable and also suitable for the task yet the fact that Kransnow's separation would make Coles a direct record to Lewis might have been the reason for Coles' resignation from solutions.

Fear & Work Instability: Worry and also insecurity can be identified as two major issues that Lewis would be handling particularly as the merger has now be cancelled as well as 2 senior execs of the advertising department would certainly be leaving. The entire responsibility of the department would certainly be falling on Lewis's shoulders who would certainly not just be in charge of brining concerning a social change however would likewise have to show herself in her new duty.

Incompatible Management Design of Leader: Lewis's monitoring style and its incompatibility with the marketing department's duty can likewise be seen as an OB challenge specifically as she has actually been utilized to handling problems in the operations division where employees are educated to concentrate on procedures and also obtain them. The marketing division on the various other hand can be seen as a team of individuals that are made use of to being supported by Krasnow who focused much more on output than processes.

Interdepartmental Disputes: Interdepartmental disputes between three departments, advertising and marketing, merchandizing and also operations specifically over the appropriation of the marketing mix can be determined as one more OB issue. The marketing department does not share the exact same vision as the other two divisions concerning the aloocation of the advertising and marketing mix twoards promos as well as advertsing, the merchandizing and operations divisions do not agree over the advertising mix allowance among one another either.

Fragmentation in Advertising And Marketing Division: Disintegration in between the advertising and marketing divisions can be recognized as another OB issue which can need more focus. The truth that the marketing and advertising areas in the marketing division are detached is avoiding both divisions from obtaining from each various other's experience and also knowledge. Assimilation of marketing with retailing as well as operations would certainly become more difficult if the marketing department itself is broken down which can be one more potential OB problem.

Chestnut Foods Analysis

Various concepts have been used to explain the situations to get additional quality about the scenario handy.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Theory X, a lot of supervisors think that subordinates are easy and also lazy, have little aspiration as well as withstand modification. The situation at Chestnut Foods is not totally complying with Theory X, it can be seen that brand-new hires are discovering this atmosphere instead stressful which might at some point lead to a better disposition of the monitoring in the direction of Theory X. Even while analyzing Lewis's management design, theory X may have been ideal in the operations department to some extent however the Marketing division would certainly require dependence on Concept Y in order to get the creativity and originality from the groups.

Tuckman's Teamwork Concept: Regarding Lewis's concern regarding bringing consistency in between the advertising and marketing division is concerned, this would at first lead to clash as talked about by Bruce Tuckman in his 'Synergy Theory'. (Tuckman, 1965). As per Tuckman's concept shown in appendix 3, throughout the preliminary stage of group development, individuals may not bond, as they are hectic finding their location in the group. By combining the marketing and advertising department's work, there may coincide first detach which might lead to the second stage of 'storming' where the groups test one another. Nonetheless, it is just throughout the third phase or 'norming' when they would certainly integrate to share ideas prior to the team can produce harmony in the 4th phase 'performing'.

Bridges' Shift Design: As per William Bridge's theory (appendix 4), individuals are quite unpleasant with adjustment, which is noticeable by the circumstance at Chestnut Foods The situation can be seen as a regular course of life if is examined according to Bridge's concept where he explains that people experience 3 phases of transition when they experience change. 'Closing, losing and Releasing', The Neutral Area as well as 'The New Starting' (Bridges, 2004). When people are presented with modification, they go into phase one and so there may be feelings like unhappiness, uncertainty, disappointment, anger, fear, rejection and also disorientation.The scenario at the advertising and marketing division of Chestnut Foods is similar so Lewis can get comfy with the suggestion that it is not extraordinary actions. In the 2nd stage, there might be a requirement to link the gap between the new and old society so Lewis might have to face this experience once Krasnow leaves. There may be reduced morale as well as low efficiency at this phase which must not be taken as a problem. It is during this phase that Lewis will have to give support to the department to ensure that they can find a sense of direction. It can be seen exactly how Krasnow has actually currently made this transition simpler by making Lewis obtain involved in the division a year before his actual separation. Based on Bridges' Model, stage three will cause visibility to discovering, High power as well as commitment as people will certainly embrace the change (Bridges, 2004).
Vrio Analysis
Maslow's Need hierarchy: The OB problem pertaining to insecurity at the work environment has actually been activated to start with by the adjustment in management as well as second of all by the truth that the merging will no more be started. Abraham Maslow in his Concept of 'Needs Pecking order' (appendix 5) has reviews the significance of 'protection needs as being a reduced degree requirement of a human for activating inspiration. As seen in the pyramid cooperated appendix 3, we can see how 'the need to really feel secure and also out of danger' is at the 2nd degree of requirements. Before a worker can be made to create mentally, he requires to have his 'Physiological 'and also 'Safety' requires met. This suggests that unless the workers are made to really feel safe and secure about their current employment standing in Chestnut Foods they might not reach 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Chestnut Foods Case Study

Effects of Analysis.

The OB analysis has checked out numerous theories to recognize how to handle the present situation handy. The complying with three options have actually been suggested to help Lewis handle the organizational challenges in the advertising division. Each of these options has been proposed for relieving the transition needed to bring the advertising department in line with the needs of the marketplace and for making the social modification that would certainly comply with as soon as the existing leader leaves.

Combination of marketing and advertising functions. Separating Adverting and Manufacturing features. Assimilation of Marketing with Procedures.

Analysis of Alternatives.

Judith Shapiro that has earlier been talked to by Lewis throughout the earlier merger days has competence in business-to-business advertising and marketing along with company and also retail marketing experience. Once Krasnow leaves, Lewis can employ Shapiro as an EVP for marketing to take care of both marketing and also advertising and marketing functions.

The advantage of this approach is that it will certainly incorporate both functions while minimizing the requirement for employing an extra resource for marketing. Lewis would certainly be heading the advertising and marketing department and also in any case her replacement would certainly be needed for the current function that she is executing. The drawback of this option is that outside hiring might produce animosity from inner personnel who may be eying the placement of EVP after Lewis takes control of Krasnow's setting.

Separating Adverting as well as Manufacturing: Given the affordable pressures and high quality work required from the marketing agency, it is recommended that Lewis needs to permit the manufacturing device to be a separate feature from the advertising and marketing unit. Given that many marketing agencies had these 2 features as separate devices, it makes even more feeling to adhere to the standard.

Combination of Marketing with Operations: Because Lewis is currently taking treatment of the advertising and procedures divisions all at once; it makes sense to integrate the two functions given that she has actually been successfully taking treatment of both ends. The reality that Lewis has to adapt her management style for the marketing department suggests that these 2 divisions would be culturally varied.


An assessment of the 3 choices shows that combination of marketing as well as operations would not be a practical step due to the vast distinctions in between the two departments in spite of the truth that currently Lewis is taking care of both. While separation of the production function may have been a desirable move for the advertising and marketing division, the reality that it would certainly suggest placing a 3rd feature under Lewis's wing indicates this ought to be stayed clear of.

Activity Strategy.
Lewis will take control of the role of EVP Advertising and marketing 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.

Manufacturing feature will stay component of advertising and marketing under advertising feature.

Lewis will separate herself from operations.

An autonomous leadership style with staff member empowerment will certainly be utilized in marketing department.

Open door policy and also focus on cross department interaction will be targeted at eliminating discord.

Contingency plan.

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