Menu

Corporate Financial Management Options Exercises Case Study Solution

CASE SOLUTION

Home >> Harvard >> Corporate Financial Management Options Exercises >>

Corporate Financial Management Options Exercises Case Study Solution

Background and Facts

Corporate Financial Management Options Exercises an office products store for little and also average sized companies has just recently been associated with preparing for a merging with its competitor Home Deport, which has impacted effectiveness levels in departmentswith the elderly manager involved in lawful complications put forth by the government Profession Compensation. With the Advertising and marketing Head advancing the information of his departure from the business in one year, Jeannie Lewis, the present head of operations has actually been asked to take the function in the near future. With difficulties in the form of a prospective cultural change as well as low employee spirits, the company needs a full reengineering effort at the marketing department.

Trouble Statement
Porter's 5 Forces Analysis
The possible cultural adjustment at the marketing division of Corporate Financial Management Options Exercises is raising uncertainty in the workplace resulting in different obstacles for the Jeannie Lewis that would be replacing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant duty in affecting calculated choices considering that Stapes Inc. had to desert its strategies of merging with Workplace Deport after the Federal Trade Commission's intervention in the process. Given the fact that the shop has a global visibility with branches in UK, USA, Canada and also Germany, political consider each of these nations might be able to affect performance or strategic objectives. Federal Profession Compensation's antitrust match versus the merger used up important time of the organization's elderly management recommending that 'political' factors can have major implications for an international organisation.

Economic Factors: Economic factors such as the emergence of small companies in the worldwide situation suggest that Corporate Financial Management Options Exercises is flourishing in an atmosphere where there is possible development of services. Reality that shop consumers are mainly looking for workplace products for home offices suggests that the market has a climbing trend of entrepreneurs as well as residence based organisations.

Social factors: Social fads in the economy reveal that customers are searching for ease as well as eye-catching rates. Market research shows how the customer for Corporate Financial Management Options Exercises does not have awareness regarding locating solutions which can provide a combination of benefit and affordable.

Technological factors: Innovation plays a vital duty in Corporate Financial Management Options Exercises's business method specifically as the organization is piloting Modern technology centers which would certainly use innovation sales and also assistance in the form of memory upgrades, outer installations. (Summary of BUG in appendix 2).

OB Issues and also Symptoms.

Several underlying Business Habits issues can be seen in Corporate Financial Management Options Exercises's case as highlighted in this section.

Uneasiness about social modification: There is worry concerning a social modification that would occur once Todd Krasnow leaves from his position as the Executive Vice President of Marketing with most of the staff members currently showing unhappiness over this possible move. This predicted adjustment has actually created stress and anxiety in the office which has actually been combined with the previous anxiety of preparing the company for a potential merger with House Deport.
Pest Analysis
Stressful Job Setting for Newcomers: There is lack of employees that can match the difficult setting of a busy organization. Not just does this result in trouble in locating the ideal individuals, it places stress and anxiety on new hires as can not stand up to the speed and stress that the company expects them to bear.

Dual Coverage Lines: Newbies find this business culture difficult and also hard to handle especially as dotted line relationships are implied to be weak in general as well as unbiased setup and efficiency assessment is still done by the strong line supervisor. This suggests that newbies could lose clearness about their corresponding roles as well as objectives particularly as dotted line reporting does not maintain them in straight interaction with the strong line supervisors.

Resentment From Cross Departmental Hiring: Krasnow's choice to make Lewis his successor rather than Bridget Coles despite the fact that it had actually been speculated that the last would take Krasnow's placement came as a strike to her morale. Lewis may have been capable as well as proper for the job yet the truth that Kransnow's departure would certainly make Coles a straight record to Lewis might have been the factor for Coles' resignation from services.

Fear & Task Instability: Worry and also insecurity can be determined as two major concerns that Lewis would certainly be taking care of specifically as the merger has now be terminated as well as two elderly execs of the advertising and marketing division would be leaving. The entire obligation of the division would certainly be dropping on Lewis's shoulders that would not just be in charge of brining about a social change but would also need to prove herself in her brand-new duty.

Incompatible Management Style of Leader: Lewis's management design and also its incompatibility with the marketing department's duty can additionally be viewed as an OB challenge particularly as she has actually been made use of to managing concerns in the operations department where workers are shown to focus on procedures as well as obtain them right. The advertising and marketing department on the other hand can be seen as a team of individuals that are utilized to being supported by Krasnow that focused more on result than processes.

Interdepartmental Disputes: Interdepartmental differences between 3 departments, marketing, merchandizing and operations respectively over the appropriation of the advertising and marketing mix can be determined as another OB concern. The marketing department does not share the same vision as the various other two divisions regarding the aloocation of the marketing mix twoards promos and advertsing, the merchandizing and also operations divisions do not concur over the marketing mix allowance amongst one another either.

Disintegration in Advertising And Marketing Department: Disintegration between the advertising and marketing departments can be determined as one more OB problem which might need additional interest. The fact that the marketing and advertising areas in the advertising division are separated is avoiding both departments from acquiring from each other's experience and know-how. Assimilation of marketing with merchandising as well as procedures would certainly end up being more difficult if the advertising division itself is disintegrated which can be another prospective OB issue.

Corporate Financial Management Options Exercises Analysis

Numerous concepts have actually been used to clarify the conditions to get further quality concerning the scenario at hand.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Theory X, a lot of managers think that juniors are passive as well as careless, have little ambition and withstand modification. The difficult version of this theory stressed threat, tight controls, hazards and penalties. Gradually it produces reduced productivity, subtle sabotage and competition (Offer, 2003). Although the scenario at Corporate Financial Management Options Exercises is not entirely adhering to Theory X, it can be seen that new hires are finding this environment instead stressful which might ultimately bring about a better inclination of the monitoring towards Concept X. According to McGregor's advocated view, which he called Theory Y, the crucial task of the monitoring is to organize business problems to make sure that individuals can attain their very own goals best by routing their initiatives in the direction of business incentives. If people find no satisfaction in their job, the management would have little option yet to rely on theory X and also exterior control (Deal, 2003). Even while assessing Lewis's management style, theory X might have appropriated in the procedures department to some extent however the Marketing department would certainly need reliance on Theory Y in order to get the creative thinking and creativity from the groups.

Tuckman's Teamwork Theory: As far as Lewis's concern about bringing consistency in between the advertising and marketing department is concerned, this would initially lead to conflict as reviewed by Bruce Tuckman in his 'Team effort Concept'. By integrating the marketing and marketing department's job, there may be the exact same initial detach which can lead to the second phase of 'storming' where the groups challenge one an additional.

Bridges' Change Version: Based On William Bridge's concept (appendix 4), people are quite awkward with change, which is noticeable by the situation at Corporate Financial Management Options Exercises The scenario can be seen as a normal course of life if is studied based on Bridge's concept where he discusses that people experience three stages of change when they experience change. 'Closing, losing and Letting go', The Neutral Area and also 'The New Starting' (Bridges, 2004). When people are presented with modification, they go into phase one and so there may be feelings like despair, uncertainty, disappointment, temper, concern, denial and disorientation.The situation at the advertising department of Corporate Financial Management Options Exercises is comparable so Lewis can get comfy with the concept that it is not remarkable actions. In the second phase, there might be a requirement to connect the gap in between the brand-new as well as old society so Lewis might have to face this challenge as soon as Krasnow leaves. There might be reduced spirits and also low performance at this phase which ought to not be taken as a problem. It is during this stage that Lewis will certainly need to provide assistance to the department so that they can locate an orientation. It can be seen exactly how Krasnow has actually already made this change easier by making Lewis obtain associated with the department a year prior to his real departure. According to Bridges' Version, stage three will cause visibility to discovering, High power and commitment as people will certainly accept the adjustment (Bridges, 2004).
Vrio Analysis
Abraham Maslow in his Concept of 'Demands Power structure' (appendix 5) has discusses the relevance of 'safety and security needs as being a lower level need of a human for triggering motivation. As seen in the pyramid shared in appendix 3, we can see how 'the need to really feel protected and out of threat' is at the 2nd degree of requirements. Prior to a staff member can be made to create mentally, he requires to have his 'Physical 'as well as 'Safety' requires satisfied.

SWOT Analysis for Corporate Financial Management Options Exercises Case Study



Effects of Analysis.

The OB analysis has actually taken a look at various theories to recognize exactly how to manage the present circumstance at hand. The complying with 3 alternatives have been suggested to help Lewis handle the organizational challenges in the advertising and marketing division. Each of these alternatives has actually been recommended for relieving the change needed to bring the marketing division according to the requirements of the market as well as for making the cultural change that would adhere to as soon as the existing leader leaves.

Combination of marketing and advertising features. Dividing Adverting and also Production features. Integration of Advertising And Marketing with Procedures.

Evaluation of Alternatives.

Combination of Advertising And Marketing & Advertising Functions: The in-house marketing agency of Corporate Financial Management Options Exercises is currently stamina for the organization in regards to saving up on expenses related to advertising and marketing as well as promo. Because no new employment has actually been done after Bridget Cole's separation with the reporting line being directly designated to Krasnow for the advertising feature, this is a positive opportunity for incorporating the advertising and marketing functions. Judith Shapiro that has actually earlier been spoken with by Lewis throughout the earlier merging days has experience in business-to-business advertising and marketing along with company as well as retail advertising and marketing experience. When Krasnow leaves, Lewis can work with Shapiro as an EVP for advertising to deal with both marketing and advertising functions.

The advantage of this method is that it will incorporate both features while minimizing the requirement for employing an added source for marketing. Lewis would be heading the advertising department and also in any type of case her replacement would be required for the present duty that she is doing. The drawback of this choice is that outside hiring may produce animosity from inner personnel who may be eying the placement of EVP after Lewis takes over Krasnow's position.

Separating Adverting and Manufacturing: Offered the affordable pressures as well as high top quality job required from the marketing firm, it is advised that Lewis should allow the manufacturing unit to be a separate feature from the advertising device. Considering that a lot of marketing agencies had these two functions as different devices, it makes even more feeling to adhere to the standard.

Assimilation of Marketing with Operations: Given that Lewis is already taking care of the advertising and marketing and also procedures divisions simultaneously; it makes sense to integrate the two functions since she has actually been successfully taking treatment of both ends. The reality that Lewis has to adjust her administration style for the advertising department recommends that these 2 departments would be culturally varied.

Suggestion.



An evaluation of the three alternatives suggests that combination of advertising and also procedures would certainly not be a practical step because of the vast distinctions in between both departments although that currently Lewis is managing both. While splitting up of the production feature might have been a beneficial action for the advertising and marketing division, the truth that it would mean placing a 3rd feature under Lewis's wing indicates this need to be stayed clear of. The integration of the advertising department is the very best alternative in regards to getting the ideal results from the division. An activity prepare for this alternative is reviewed listed below.

Activity Plan.
Recommendation
Lewis will take control of the function of EVP Advertising and marketing after Krasnow leaves.

Marketing and advertising features would be merged.

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

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

Lewis will certainly separate herself from procedures.

An autonomous leadership design with employee empowerment will certainly be made use of in marketing division.

Open up door policy and emphasis on cross department communication will certainly be targeted at getting rid of dissonance.

Backup plan.

If the combination does not exercise as prepared, a backup strategy would adhere to which would separate the production function from the advertising and marketing feature to reduce the tons on the SVP of marketing and advertising. In case Judith Shapiro does not get worked with, 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.