Corning Convertible Preferred Stock Case Study Help


Home >> Harvard >> Corning Convertible Preferred Stock >>

Corning Convertible Preferred Stock Case Study Help

Background and Facts

Corning Convertible Preferred Stock an office materials retailer for small and moderate sized businesses has recently been involved in planning for a merger with its rival Residence Deport, which has actually affected performance degrees in departmentswith the elderly manager involved in legal difficulties presented by the federal Profession Compensation. With the Marketing Head advancing the information of his separation from the business in one year, Jeannie Lewis, the present head of procedures has been asked to take the duty in the near future. With difficulties in the kind of a potential cultural modification and also reduced employee spirits, the company wants a total reengineering effort at the marketing division.

Problem Declaration
Porter's 5 Forces Analysis
The prospective cultural adjustment at the advertising and marketing division of Corning Convertible Preferred Stock is boosting unpredictability in the workplace resulting in numerous challenges for the Jeannie Lewis that 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 strategic decisions given that Stapes Inc. needed to desert its strategies of merging with Office Deport after the Federal Profession Compensation's intervention at the same time. Given the reality that the shop has a global existence with branches in UK, U.S.A., Canada and also Germany, political consider each of these countries might have the ability to affect efficiency or strategic objectives. Federal Profession Compensation's antitrust fit against the merging occupied beneficial time of the company's senior administration suggesting that 'political' factors can have serious ramifications for an international service.

Economic Factors: Economic factors such as the introduction of small businesses in the international circumstance suggest that Corning Convertible Preferred Stock is growing in an environment where there is possible growth of companies. In addition to this, reality that shop consumers are mainly trying to find workplace supplies for home offices recommends that the market has a rising pattern of business owners and also home organisations.

Social factors: Social fads in the economic situation reveal that customers are looking for benefit along with appealing rates. Market research shows how the consumer for Corning Convertible Preferred Stock lacks understanding regarding locating services which can offer a combination of benefit as well as inexpensive.

Technical factors: Modern technology plays an important duty in Corning Convertible Preferred Stock's business technique particularly as the organization is piloting Innovation centers which would certainly supply innovation sales and also assistance in the form of memory upgrades, outer installments. (Summary of INSECT in appendix 2).

OB Issues and also Symptoms.

Numerous underlying Organizational Actions problems can be seen in Corning Convertible Preferred Stock's case as highlighted in this section.

Concerns about cultural adjustment: There is apprehension regarding a cultural change that would certainly occur once Todd Krasnow leaves from his position as the Exec Vice Head Of State of Advertising with most of the employee currently showing discontent over this prospective step. This predicted modification has actually developed tension in the work environment which has been paired with the past anxiety of preparing the firm for a prospective merging with Home Deport.
Pest Analysis
Demanding Task Atmosphere for Newcomers: There is shortage of workers that can match the difficult atmosphere of a busy company. Not only does this lead to difficulty in locating the right individuals, it places stress and anxiety on new hires as can not withstand the rate as well as stress that the company expects them to birth.

Double Coverage Lines: Beginners discover this organizational culture difficult as well as difficult to deal with specifically as dotted line relationships are suggested to be weaker as a whole and also unbiased setup and also efficiency examination is still done by the strong line manager. This means that beginners might lose quality about their particular functions and goals specifically as populated line reporting does not maintain them in direct communication with the solid line managers.

Bitterness From Cross Departmental Hiring: Krasnow's decision to make Lewis his follower instead of Bridget Coles despite the fact that it had been hypothesized that the last would take Krasnow's setting came as an impact to her morale. Lewis might have been capable as well as appropriate for the work but the fact that Kransnow's separation would make Coles a straight record to Lewis may have been the factor for Coles' resignation from solutions.

Anxiety & Task Insecurity: Worry as well as instability can be recognized as 2 significant issues that Lewis would be managing particularly as the merger has currently be cancelled and 2 elderly execs of the marketing division would certainly be leaving. The whole obligation of the department would be falling on Lewis's shoulders who would certainly not just be in charge of brining regarding a cultural change yet would certainly also need to prove herself in her new role.

Inappropriate Monitoring Style of Leader: Lewis's management style and also its incompatibility with the advertising department's function can likewise be seen as an OB challenge specifically as she has actually been utilized to handling problems in the operations division where personnel are educated to concentrate on procedures and also get them right. The marketing division on the other hand can be seen as a group of people who are used to being nurtured by Krasnow that concentrated much more on outcome than processes.

Interdepartmental Arguments: Interdepartmental differences in between 3 divisions, advertising and marketing, merchandizing and also procedures respectively over the allowance of the advertising mix can be determined as one more OB problem. Although the marketing division does not share the very same vision as the various other 2 divisions concerning the aloocation of the marketing mix twoards promos and also advertsing, the merchandizing as well as procedures departments do not concur over the marketing mix allotment among one another either.

Fragmentation in Advertising Department: Disintegration in between the advertising and marketing departments can be determined as an additional OB issue which can need additional interest. The reality that the marketing and advertising areas in the marketing department are detached is avoiding both departments from getting from each various other's experience as well as proficiency. Assimilation of advertising and marketing with merchandising as well as procedures would certainly come to be harder if the advertising department itself is disintegrated which can be an additional prospective OB worry.

Corning Convertible Preferred Stock Analysis

Various theories have actually been used to explain the scenarios to obtain additional clearness concerning the scenario at hand.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, the majority of managers think that staffs are easy and lazy, have little passion and withstand adjustment. The hard variation of this concept stressed coercion, tight controls, threats as well as penalties. Gradually it produces low performance, refined sabotage as well as rivalry (Offer, 2003). The scenario at Corning Convertible Preferred Stock is not completely complying with Theory X, it can be seen that brand-new hires are discovering this atmosphere rather difficult which may ultimately lead to a higher disposition of the management in the direction of Theory X. Based on McGregor's advocated view, which he called Concept Y, the crucial job of the management is to organize organizational conditions to make sure that individuals can accomplish their very own goals best by routing their efforts in the direction of business benefits. If people discover no satisfaction in their work, the management would certainly have little option yet to count on theory X as well as external control (Bargain, 2003). Even while examining Lewis's monitoring design, concept X might have appropriated in the procedures department to some extent however the Marketing department would certainly need dependence on Concept Y to get the creative thinking as well as originality from the groups.

Tuckman's Synergy Concept: As much as Lewis's problem regarding bringing harmony between the marketing and advertising division is worried, this would originally lead to contrast as reviewed by Bruce Tuckman in his 'Teamwork Concept'. By combining the advertising and advertising division's work, there might be the very same initial separate which can lead to the 2nd stage of 'storming' where the groups challenge one another.

When people are presented with adjustment, they get in stage one as well as so there might be feelings like unhappiness, unpredictability, frustration, rage, concern, rejection and also disorientation.The circumstance at the advertising and marketing division of Corning Convertible Preferred Stock is similar so Lewis can get comfy with the concept that it is not remarkable behavior. It is during this phase that Lewis will certainly have to provide guidance to the department so that they can locate a sense of direction. It can be seen exactly how Krasnow has already made this change simpler by making Lewis get involved in the division a year prior to his real departure.
Vrio Analysis
Abraham Maslow in his Concept of 'Requirements Hierarchy' (appendix 5) has talks about the importance of 'protection needs as being a reduced degree need of a human for setting off inspiration. As seen in the pyramid shared in appendix 3, we can see exactly how 'the requirement to feel safe and out of risk' is at the 2nd degree of needs. Prior to a staff member can be made to develop psychologically, he requires to have his 'Physiological 'and 'Safety' requires fulfilled.

SWOT Analysis for Corning Convertible Preferred Stock Case Study

Ramification of Analysis.

The OB analysis has considered various concepts to understand just how to deal with the existing situation available. The following 3 options have actually been suggested to help Lewis handle the organizational difficulties in the advertising and marketing division. Each of these alternatives has been recommended for alleviating the shift needed to bring the marketing department in line with the demands of the market and also for making the cultural change that would certainly follow once the existing leader leaves.

Integration of marketing and advertising features. Separating Adverting as well as Production functions. Combination of Advertising And Marketing with Procedures.

Analysis of Alternatives.

Judith Shapiro that has actually earlier been spoken with by Lewis throughout the earlier merger days has knowledge in business-to-business marketing along with company and also retail marketing experience. Once Krasnow leaves, Lewis can hire Shapiro as an EVP for marketing to take care of both advertising as well as advertising and marketing features.

The advantage of this technique is that it will incorporate both features while lowering the requirement for hiring an extra source for advertising. Along with this, Lewis would certainly be heading the advertising division and in any case her replacement would be needed for the current duty that she is doing. The disadvantage of this choice is that exterior hiring may produce resentment from inner workers who might be looking at the setting of EVP after Lewis takes over Krasnow's placement.

Separating Adverting and also Production: Provided the affordable stress and premium quality work needed from the ad agency, it is suggested that Lewis ought to permit the manufacturing device to be a different function from the advertising device. Since a lot of ad agency had these 2 functions as separate systems, it makes even more feeling to follow the standard. Along with this, both functions might be able to focus on their core triggers much more successfully. However, the disadvantage of this approach would certainly be that extra prices would certainly need to be birthed for establishing different manufacturing features. Along with this, a production head might have to be employed which can raise expenses for the company.

Combination of Advertising with Operations: Considering that Lewis is already taking care of the advertising and marketing and also procedures divisions at the same time; it makes good sense to integrate the two features since she has actually been efficiently looking after both ends. The fact that the two departments currently have significant distinctions over allotment of sources recommends that this integration might have the ability to produce harmony particularly as Lewis would certainly be heading both ends.However there are various disadvantages of this step particularly as it would certainly put excessive worry over Lewis's shoulders. The truth that Lewis has to adjust her administration design for the marketing division suggests that these 2 divisions would be culturally diverse. In addition to this, Lewis may not have the ability to apply one sort of leadership design to both divisions which might cause inefficiency in either one of the two functions.


An evaluation of the three choices shows that combination of advertising and also procedures would certainly not be a practical action due to the vast distinctions in between the two divisions despite the reality that presently Lewis is managing both. While splitting up of the production feature may have been a favorable relocation for the marketing department, the reality that it would imply putting a 3rd feature under Lewis's wing suggests this should be avoided.

Action Plan.
Lewis will certainly take control of the role of EVP Marketing after Krasnow leaves.

Marketing and advertising features would certainly be combined.

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

Production function will continue to be component of advertising and marketing under advertising and marketing function.

Lewis will certainly separate herself from operations.

An autonomous management design with staff member empowerment will certainly be made use of in advertising division.

Open up door plan as well as emphasis on cross departmental interaction will be targeted at eliminating disharmony.

Backup strategy.

If the assimilation does not work out as planned, a contingency plan would certainly comply with which would separate the production function from the marketing function to lower the tons on the SVP of advertising and marketing. In case Judith Shapiro does not get worked with, Lewis will be heading the advertising division without an SVP. Because case the manufacturing feature will certainly be divided by putting it under an SVP manufacturing.