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Chestnut Foods Case Study Solution

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Background and Facts

Chestnut Foods an office materials seller for little and medium sized businesses has lately been associated with preparing for a merger with its competitor Residence Deport, which has influenced performance levels in departmentswith the senior supervisor associated with lawful issues presented by the government Profession Compensation. With the Advertising and marketing Head putting forward the information of his separation from the firm in one year, Jeannie Lewis, the present head of operations has actually been asked to take the function in the future. With challenges in the kind of a possible social adjustment and reduced staff member morale, the organization is in need of a complete reengineering initiative at the marketing department.

Issue Declaration
Porter's 5 Forces Analysis
The potential social modification at the marketing department of Chestnut Foods is increasing unpredictability in the working environment leading to numerous obstacles for the Jeannie Lewis who would certainly be changing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a major duty in impacting strategic decisions given that Stapes Inc. had to abandon its plans of merging with Office Deport after the Federal Trade Payment's treatment while doing so. Given the fact that the store has an international visibility with branches in UK, USA, Canada and Germany, political factors in each of these nations might be able to affect performance or calculated objectives. Federal Profession Compensation's antitrust suit versus the merging occupied useful time of the company's senior management suggesting that 'political' factors can have major ramifications for an international service.

Economic Factors: Economic factors such as the emergence of small companies in the global scenario suggest that Chestnut Foods is thriving in an environment where there is possible growth of businesses. Truth that store consumers are primarily looking for workplace materials for residence workplaces recommends that the market has a climbing pattern of business owners as well as home based businesses.

Social factors: Social patterns in the economy show that consumers are looking for convenience along with eye-catching rates. Market research demonstrates how the client for Chestnut Foods does not have understanding concerning finding services which can use a combination of comfort and also affordable.

Technical factors: Innovation plays an important duty in Chestnut Foods's service approach particularly as the organization is piloting Innovation centers which would supply technology sales and also assistance in the form of memory upgrades, outer installments. (Recap of PARASITE in appendix 2).

OB Issues as well as Manifestations.

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

Concerns concerning social modification: There is uneasiness about a social modification that would occur once Todd Krasnow leaves from his placement as the Executive Vice Head Of State of Advertising And Marketing with most of the employee already revealing discontent over this possible move. This expected modification has created stress and anxiety in the workplace which has been paired with the past anxiety of preparing the firm for a potential merging with House Deport.
Pest Analysis
Difficult Task Setting for Newcomers: There is scarcity of employees that can match the stressful atmosphere of a busy company. Not only does this cause problem in locating the ideal individuals, it places anxiety on new hires as can not withstand the rate as well as stress that the organization anticipates them to birth.

Dual Reporting Lines: Newcomers find this business society cumbersome as well as hard to handle especially as dotted line connections are meant to be weaker generally as well as objective setting as well as efficiency assessment is still done by the solid line manager. This means that newcomers can lose clarity concerning their particular functions and also purposes particularly as dotted line coverage does not maintain them in direct communication with the solid line supervisors.

Animosity From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower instead of Bridget Coles even though it had actually been guessed that the last would take Krasnow's position came as a blow to her morale. Lewis may have been qualified and also proper for the work yet the fact that Kransnow's departure would make Coles a direct record to Lewis might have been the reason for Coles' resignation from services.

Worry & Task Instability: Anxiety and instability can be identified as 2 significant issues that Lewis would be handling particularly as the merger has actually currently be terminated and also 2 senior executives of the marketing division would certainly be leaving. The entire obligation of the department would certainly be falling on Lewis's shoulders that would certainly not simply supervise of brining concerning a social adjustment however would certainly additionally need to verify herself in her new function.

Inappropriate Administration Design of Leader: Lewis's monitoring style as well as its conflict with the advertising department's function can likewise be seen as an OB challenge specifically as she has actually been utilized to taking care of issues in the operations division where employees are taught to concentrate on procedures as well as get them. The advertising department on the other hand can be seen as a group of people that are utilized to being nurtured by Krasnow who focused a lot more on result than procedures.

Interdepartmental Differences: Interdepartmental differences between three divisions, marketing, merchandizing as well as operations specifically over the allotment of the advertising mix can be recognized as an additional OB concern. Although the marketing division does not share the very same vision as the other two departments regarding the aloocation of the marketing mix twoards promos and also advertsing, the merchandizing as well as procedures divisions do not agree over the advertising mix allocation amongst each other either.

Fragmentation in Advertising Division: Disintegration in between the marketing and advertising departments can be determined as an additional OB problem which might need further attention. The truth that the marketing and advertising areas in the marketing division are separated is preventing both departments from getting from each other's experience and proficiency. Integration of advertising and marketing with retailing and operations would come to be harder if the marketing division itself is disintegrated which can be another possible OB concern.

Chestnut Foods Analysis

Different concepts have been utilized to explain the circumstances to get more quality about the circumstance available.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Concept X, a lot of managers think that staffs are passive and lazy, have little aspiration as well as withstand adjustment. The scenario at Chestnut Foods is not completely adhering to Concept X, it can be seen that brand-new hires are discovering this atmosphere instead difficult which may ultimately lead to a better disposition of the administration towards Concept X. Also while assessing Lewis's management design, theory X might have been suitable in the operations division to some extent however the Advertising department would call for dependence on Concept Y in order to get the creativity and also creativity from the groups.

Tuckman's Team effort Concept: As far as Lewis's issue about bringing consistency between the advertising and marketing department is concerned, this would at first cause conflict as discussed by Bruce Tuckman in his 'Team effort Concept'. (Tuckman, 1965). As per Tuckman's theory shown in appendix 3, throughout the initial phase of group development, individuals might not bond, as they are hectic discovering their place in the team. By combining the advertising and marketing division's work, there might coincide preliminary detach which can bring about the second phase of 'storming' where the teams test one another. Nevertheless, it is only throughout the third phase or 'norming' when they would collaborate to share concepts before the group can bring about synergy in the 4th stage 'performing'.

Bridges' Change Design: Based On William Bridge's theory (appendix 4), people are fairly awkward with adjustment, which is evident by the circumstance at Chestnut Foods The circumstance can be viewed as a normal training course of life if is researched as per Bridge's concept where he explains that individuals undergo 3 stages of shift when they experience change. 'End, losing and also Releasing', The Neutral Zone and 'The New Beginning' (Bridges, 2004). When individuals are presented with change, they enter stage one therefore there may be feelings like unhappiness, uncertainty, frustration, anger, fear, rejection and also disorientation.The scenario at the marketing division of Chestnut Foods is comparable so Lewis can obtain comfortable with the concept that it is not phenomenal habits. In the 2nd stage, there might be a demand to link the space in between the new and also old culture so Lewis might need to face this challenge once Krasnow leaves. There may be low spirits and also reduced performance at this phase which should not be taken as a trouble. It is during this phase that Lewis will certainly need to provide assistance to the department to ensure that they can discover an orientation. It can be seen exactly how Krasnow has actually already made this shift less complicated by making Lewis obtain involved in the division a year before his real separation. As per Bridges' Design, phase three will certainly cause visibility to learning, High power and dedication as individuals will certainly accept the modification (Bridges, 2004).
Vrio Analysis
Abraham Maslow in his Concept of 'Demands Pecking order' (appendix 5) has talks about the relevance of 'protection needs as being a reduced degree need of a human for setting off motivation. As seen in the pyramid shared in appendix 3, we can see just how 'the demand to feel safe and secure and also out of threat' is at the 2nd level of demands. Prior to an employee can be made to create mentally, he needs to have his 'Physical 'and also 'Safety and security' needs fulfilled.

SWOT Analysis for Chestnut Foods Case Study



Implication of Analysis.

The OB analysis has checked out various theories to comprehend how to deal with the present scenario handy. The following three alternatives have actually been proposed to assist Lewis deal with the business challenges in the marketing department. Each of these choices has been recommended for alleviating the shift needed to bring the advertising division in line with the needs of the market as well as for making the cultural change that would comply with when the current leader leaves.

Combination of marketing and advertising features. Separating Adverting as well as Manufacturing features. Combination of Marketing with Workflow.

Examination of Alternatives.

Combination of Advertising & Advertising Functions: The in-house advertising agency of Chestnut Foods is currently strength for the organization in terms of saving up on overheads associated with advertising and also promotion. Since no brand-new employment has been done after Bridget Cole's departure with the coverage line being straight assigned to Krasnow for the advertising function, this is a positive possibility for incorporating the advertising and marketing features. Judith Shapiro that has actually earlier been talked to by Lewis during the earlier merger days has knowledge in business-to-business advertising and marketing along with firm and retail advertising experience. When Krasnow leaves, Lewis can work with Shapiro as an EVP for marketing to handle both marketing and advertising functions.

The advantage of this approach is that it will incorporate the two features while decreasing the demand for employing an additional source for marketing. Lewis would certainly be heading the advertising and marketing department as well as in any case her replacement would certainly be needed for the existing duty that she is performing. The drawback of this option is that external hiring may cause resentment from internal workers that might be looking at the placement of EVP after Lewis takes over Krasnow's placement.

Separating Adverting and Production: Provided the affordable stress and also premium quality work needed from the advertising agency, it is recommended that Lewis must allow the production system to be a separate feature from the marketing unit. Given that many ad agency had these two features as different units, it makes even more sense to follow the standard. In addition to this, both functions might have the ability to focus on their core turns on a lot more effectively. However, the negative aspect of this strategy would be that additional prices would need to be borne for establishing separate production features. Along with this, a production head may need to be employed which can increase expenses for the organization.

Combination of Advertising And Marketing with Workflows: Because Lewis is currently taking treatment of the marketing and also operations divisions concurrently; it makes feeling to integrate the 2 functions considering that she has actually been successfully taking care of both ends. The reality that Lewis has to adapt her management design for the marketing department recommends that these 2 divisions would certainly be culturally diverse.

Referral.



An evaluation of the three choices indicates that combination of advertising and marketing and procedures would certainly not be a practical relocation due to the huge distinctions in between the 2 divisions despite the fact that currently Lewis is handling both. While splitting up of the production function may have been a favorable action for the advertising department, the reality that it would mean placing a 3rd feature under Lewis's wing implies this should be prevented.

Activity Plan.
Recommendation
Lewis will take over the role of EVP Advertising after Krasnow leaves.

Advertising and Marketing functions would certainly be merged.

Judith Shapiro will be worked with to take Lewis's place as SVP of advertising and marketing.

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

Lewis will certainly divide herself from procedures.

A democratic management design with employee empowerment will be made use of in advertising division.

Open door plan as well as emphasis on cross department communication will certainly be targeted at eliminating dissonance.

Contingency plan.

If the assimilation does not work out as planned, a backup strategy would certainly follow which would certainly divide the manufacturing function from the advertising feature to reduce the load on the SVP of marketing and advertising. In case Judith Shapiro does not get employed, Lewis will certainly be heading the marketing department without an SVP. Because case the production feature will absolutely be divided by positioning it under an SVP manufacturing.