Continental Airlines I Case Study Solution


Home >> Harvard >> Continental Airlines I >>

Continental Airlines I Case Study Help

Background and Facts

Continental Airlines I a workplace supplies seller for tiny and medium sized organisations has just recently been associated with planning for a merging with its rival Residence Deport, which has affected performance degrees in departmentswith the senior supervisor involved in legal complications presented by the federal Profession Compensation. With the Advertising and marketing Head putting forward 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 form of a potential cultural adjustment and also low employee spirits, the organization wants a full reengineering effort at the advertising and marketing department.

Issue Statement
Porter's 5 Forces Analysis
The potential cultural adjustment at the marketing division of Continental Airlines I is raising unpredictability in the working environment causing various 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 influencing tactical decisions since Stapes Inc. needed to desert its strategies of merging with Workplace Deport after the Federal Trade Commission's intervention while doing so. Provided the reality that the shop has a worldwide existence with branches in UK, U.S.A., Canada and also Germany, political consider each of these nations might be able to impact performance or calculated goals. Federal Trade Payment's antitrust fit versus the merging used up useful time of the organization's elderly administration recommending that 'political' factors can have significant ramifications for a global company.

Economic Factors: Financial factors such as the development of small companies in the international scenario recommend that Continental Airlines I is thriving in an environment where there is possible development of organisations. Reality that shop customers are primarily looking for workplace materials for home offices recommends that the market has an increasing fad of entrepreneurs and also residence based services.

Social factors: Social patterns in the economy show that customers are trying to find convenience along with attractive rates. Market research shows how the customer for Continental Airlines I lacks awareness about finding solutions which can provide a combination of ease as well as low costs.

Technological factors: Modern technology plays a vital duty in Continental Airlines I's service approach specifically as the organization is piloting Innovation facilities which would provide technology sales and support in the kind of memory upgrades, outer installations. (Recap of BUG in appendix 2).

OB Issues and also Symptoms.

Several underlying Organizational Habits problems can be seen in Continental Airlines I's case as highlighted in this section.

Uneasiness concerning social adjustment: There is uneasiness about a cultural adjustment that would occur when Todd Krasnow leaves from his position as the Executive Vice President of Advertising with most of the staff members currently showing discontent over this potential relocation. This predicted modification has actually developed tension in the workplace which has actually been coupled with the past tension of preparing the company for a prospective merging with Home Deport.
Pest Analysis
Demanding Task Atmosphere for Newcomers: There is shortage of personnel that can match the demanding atmosphere of a busy organization. Not just does this result in trouble in locating the right people, it places tension on brand-new hires as can not withstand the pace as well as stress that the organization anticipates them to bear.

Dual Reporting Lines: Newcomers find this business society difficult and also difficult to handle specifically as dotted line relationships are implied to be weaker generally and objective setup as well as performance evaluation is still done by the strong line manager. This means that novices can lose quality about their particular functions as well as objectives particularly as populated line coverage does not maintain them in straight interaction with the strong line supervisors.

Animosity From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower instead of Bridget Coles although it had been hypothesized that the last would certainly take Krasnow's position came as an impact to her morale. Lewis may have been capable and also suitable for the task but the fact that Kransnow's departure would certainly make Coles a straight record to Lewis might have been the factor for Coles' resignation from services.

Concern & Job Instability: Worry as well as insecurity can be determined as 2 major issues that Lewis would certainly be taking care of especially as the merging has currently be cancelled and also 2 senior executives of the advertising and marketing department would certainly be leaving. The whole duty of the department would be falling on Lewis's shoulders that would not just supervise of brining about a cultural change however would also have to show herself in her new duty.

Inappropriate Management Design of Leader: Lewis's administration style as well as its incompatibility with the advertising and marketing department's function can additionally be seen as an OB obstacle specifically as she has actually been used to dealing with concerns in the operations department where employees are taught to concentrate on procedures and get them. The marketing division on the various other hand can be viewed as a team of individuals that are made use of to being nurtured by Krasnow that focused much more on output than procedures.

Interdepartmental Disputes: Interdepartmental disputes between three departments, marketing, merchandizing and operations respectively over the allocation of the advertising and marketing mix can be determined as an additional OB concern. Although the marketing department does not share the very same vision as the other two departments pertaining to the aloocation of the advertising mix twoards promotions and advertsing, the merchandizing and also operations divisions do not agree over the marketing mix allocation amongst each other either.

Disintegration in Advertising Division: Fragmentation between the advertising and marketing divisions can be identified as another OB problem which can need further focus. The fact that the marketing and advertising sections in the marketing department are disconnected is stopping both departments from gaining from each other's experience as well as know-how. Assimilation of marketing with merchandising as well as operations would end up being more difficult if the advertising and marketing department itself is broken down which can be another possible OB worry.

Continental Airlines I Analysis

Numerous concepts have actually been made use of to discuss the scenarios to obtain further quality regarding the circumstance at hand.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Theory X, a lot of managers think that subordinates are passive and lazy, have little ambition and stand up to adjustment. The tough version of this theory highlighted browbeating, tight controls, hazards and penalties. With time it creates low productivity, subtle sabotage and also competition (Deal, 2003). The circumstance at Continental Airlines I is not completely complying with Theory X, it can be seen that brand-new hires are discovering this environment instead stressful which might ultimately lead to a higher inclination of the administration towards Concept X. As per McGregor's advocated view, which he called Concept Y, the necessary task of the management is to set up organizational problems so that people can achieve their own goals best by guiding their efforts towards organizational incentives. If individuals find no contentment in their job, the monitoring would certainly have little choice yet to rely upon concept X as well as external control (Offer, 2003). Also while analyzing Lewis's management style, theory X may have appropriated in the operations division to some extent but the Advertising and marketing department would certainly need reliance on Theory Y so as to get the creativity and creativity from the teams.

Tuckman's Team effort Theory: Regarding Lewis's concern concerning bringing harmony in between the advertising and marketing department is concerned, this would at first cause clash as reviewed by Bruce Tuckman in his 'Team effort Theory'. (Tuckman, 1965). Based on Tuckman's concept shown in appendix 3, during the first phase of team development, people might not bond, as they are busy finding their area in the group. By integrating the advertising and marketing division's job, there may be the same initial separate which could cause the second phase of 'storming' where the teams test one another. It is just during the third phase or 'norming' when they would certainly come with each other to share suggestions before the team can bring around harmony in the 4th phase 'executing'.

When individuals are presented with modification, they get in phase one as well as so there may be feelings like unhappiness, unpredictability, stress, rage, concern, rejection and also disorientation.The situation at the advertising and marketing department of Continental Airlines I is similar so Lewis can get comfortable with the suggestion that it is not remarkable habits. It is throughout this phase that Lewis will certainly have to give guidance to the department so that they can discover a sense of instructions. It can be seen exactly how Krasnow has already made this shift much easier by making Lewis get involved in the division a year prior to his actual departure.
Vrio Analysis
Abraham Maslow in his Concept of 'Needs Pecking order' (appendix 5) has goes over the importance of 'protection needs as being a reduced degree requirement of a human for triggering inspiration. As seen in the pyramid shared in appendix 3, we can see how 'the need to really feel protected and also out of danger' is at the second degree of requirements. Prior to a worker can be made to develop psychologically, he requires to have his 'Physiological 'and 'Safety and security' needs met.

SWOT Analysis for Continental Airlines I Case Study

Implication of Analysis.

The OB analysis has taken a look at various concepts to comprehend how to cope with the current circumstance at hand. The following three choices have actually been proposed to assist Lewis handle the business challenges in the advertising department. Each of these alternatives has actually been recommended for alleviating the transition needed to bring the advertising and marketing department in accordance with the requirements of the marketplace as well as for making the social modification that would certainly adhere to as soon as the present leader leaves.

Combination of marketing and advertising functions. Separating Adverting and also Production features. Integration of Advertising with Procedures.

Examination of Alternatives.

Judith Shapiro who has actually earlier been spoken with by Lewis throughout the earlier merger days has knowledge in business-to-business advertising and marketing along with company and retail advertising and marketing experience. Once Krasnow leaves, Lewis can employ Shapiro as an EVP for marketing to handle both marketing and also advertising functions.

The benefit of this approach is that it will integrate the two features while minimizing the demand for hiring an added resource for advertising. Along with this, Lewis would certainly be heading the marketing division and also all the same her replacement would certainly be needed for the present duty that she is executing. The drawback of this choice is that external hiring might cause bitterness from interior employees who may be looking at the setting of EVP after Lewis takes over Krasnow's placement.

Dividing Adverting and Manufacturing: Provided the affordable stress and also high top quality job required from the advertising firm, it is recommended that Lewis must allow the production device to be a separate function from the advertising unit. Since many advertising and marketing firms had these two features as separate devices, it makes more sense to comply with the standard.

Combination of Advertising And Marketing with Operations: Given that Lewis is currently taking care of the marketing and also operations departments concurrently; it makes sense to integrate the two functions given that she has actually been efficiently looking after both ends. The reality that both divisions currently have major distinctions over allotment of sources recommends that this assimilation may have the ability to cause consistency specifically as Lewis would be heading both ends.However there are various downsides of this move especially as it would place too much burden over Lewis's shoulders. The truth that Lewis needs to adjust her monitoring design for the advertising and marketing division suggests that these two divisions would be culturally varied. Lewis might not be able to use one kind of leadership style to both divisions which can result in ineffectiveness in either one of the 2 features.


An analysis of the 3 choices suggests that assimilation of marketing and also operations would not be a possible relocation due to the vast distinctions between the two divisions regardless of the truth that presently Lewis is managing both. While splitting up of the production feature may have been a beneficial relocation for the advertising and marketing division, the truth that it would certainly indicate putting a third feature under Lewis's wing implies this should be avoided.

Action Strategy.
Lewis will certainly take control of the duty of EVP Marketing after Krasnow leaves.

Advertising and Marketing functions would be combined.

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

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

Lewis will separate herself from operations.

A democratic management design with staff member empowerment will certainly be made use of in marketing division.

Open door policy and also focus on cross departmental communication will be focused on getting rid of dissonance.

Backup strategy.

If the combination does not exercise as planned, a backup strategy would adhere to which would certainly separate the production feature from the marketing feature to reduce the lots on the SVP of marketing and advertising. In case Judith Shapiro does not obtain employed, Lewis will certainly be heading the marketing department without an SVP. In that case the manufacturing function will absolutely be separated by putting it under an SVP production.