Covalent Term Loan For Expansion And Modernization Case Study Solution


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Covalent Term Loan For Expansion And Modernization Case Study Analysis

Background and Facts

Covalent Term Loan For Expansion And Modernization an office products seller for little and average sized organisations has recently been associated with preparing for a merger with its rival Home Deport, which has affected efficiency degrees in departmentswith the senior supervisor involved in lawful problems presented by the federal Profession Payment. With the Advertising Head putting forward the information of his departure from the firm in one year, Jeannie Lewis, the present head of operations has been asked to take the role in the near future. With challenges in the type of a possible social change and also reduced staff member morale, the company needs a complete reengineering initiative at the marketing department.

Trouble Statement
Porter's 5 Forces Analysis
The potential social change at the advertising division of Covalent Term Loan For Expansion And Modernization is raising unpredictability in the workplace resulting in various difficulties for the Jeannie Lewis that would be replacing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant function in impacting strategic decisions considering that Stapes Inc. had to abandon its strategies of merging with Office Deport after the Federal Trade Commission's intervention in the process. Offered the reality that the store has a worldwide presence with branches in UK, U.S.A., Canada and also Germany, political factors in each of these nations may have the ability to influence performance or calculated goals. Federal Profession Commission's antitrust suit versus the merging took up valuable time of the organization's elderly monitoring suggesting that 'political' factors can have major implications for a worldwide business.

Economic Factors: Economic factors such as the development of local business in the worldwide situation recommend that Covalent Term Loan For Expansion And Modernization is flourishing in an environment where there is potential growth of organisations. Reality that shop consumers are mostly looking for office products for residence offices recommends that the market has a rising fad of entrepreneurs and house based services.

Social factors: Social fads in the economic climate show that clients are looking for comfort in addition to attractive rates. Marketing research shows how the customer for Covalent Term Loan For Expansion And Modernization lacks recognition about discovering services which can use a mix of ease and low costs.

Technological factors: Modern technology plays an important role in Covalent Term Loan For Expansion And Modernization's business method especially as the company is piloting Technology centers which would certainly supply modern technology sales and also assistance in the kind of memory upgrades, peripheral setups. (Summary of BUG in appendix 2).

OB Issues and Symptoms.

Several underlying Organizational Habits concerns can be seen in Covalent Term Loan For Expansion And Modernization's case as highlighted in this area.

Concerns regarding cultural modification: There is apprehension regarding a social modification that would take place as soon as Todd Krasnow leaves from his position as the Exec Vice President of Advertising with a lot of the team member currently showing unhappiness over this potential relocation. This anticipated adjustment has produced stress and anxiety in the workplace which has actually been paired with the past tension of preparing the firm for a prospective merging with Home Deport.
Pest Analysis
Demanding Task Setting for Newcomers: There is lack of employees that can match the stressful environment of a hectic company. Not only does this result in difficulty in discovering the ideal individuals, it places tension on brand-new hires as can not endure the speed and pressure that the company anticipates them to bear.

Double Coverage Lines: Beginners discover this business society difficult as well as hard to handle particularly as dotted line relationships are indicated to be weak generally and objective setup and also efficiency analysis is still done by the solid line manager. This means that novices can lose clearness regarding their respective functions and objectives particularly as populated line reporting does not keep them in direct communication with the strong line supervisors.

Resentment From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower as opposed to Bridget Coles although it had actually been guessed that the latter would certainly take Krasnow's position came as a strike to her spirits. Lewis may have been qualified and also suitable for the job yet the truth that Kransnow's departure would certainly make Coles a straight record to Lewis may have been the reason for Coles' resignation from solutions.

Fear & Task Instability: Fear and instability can be recognized as two significant issues that Lewis would be handling especially as the merging has now be cancelled and also 2 elderly execs of the advertising and marketing division would be leaving. The entire obligation of the department would certainly be falling on Lewis's shoulders that would certainly not just be in charge of brining regarding a social change yet would additionally need to confirm herself in her new role.

Inappropriate Management Design of Leader: Lewis's management design and its conflict with the marketing division's function can also be seen as an OB obstacle specifically as she has been used to dealing with problems in the procedures department where workers are taught to focus on processes as well as obtain them. The advertising division on the other hand can be viewed as a group of individuals that are made use of to being nurtured by Krasnow who concentrated more on result than processes.

Interdepartmental Disagreements: Interdepartmental disputes in between 3 departments, advertising and marketing, merchandizing and also procedures respectively over the allotment of the advertising and marketing mix can be identified as another OB concern. The marketing division does not share the same vision as the various other two divisions regarding the aloocation of the advertising and marketing mix twoards promotions and advertsing, the merchandizing and procedures divisions do not agree over the advertising mix appropriation amongst one an additional either.

Disintegration in Advertising Division: Disintegration between the marketing and advertising departments can be identified as one more OB issue which might need more focus. The truth that the advertising and marketing areas in the marketing division are detached is preventing both divisions from gaining from each other's experience and competence. Assimilation of marketing with merchandising and also procedures would come to be more difficult if the advertising and marketing division itself is degenerated which can be another possible OB issue.

Covalent Term Loan For Expansion And Modernization Analysis

Numerous theories have actually been made use of to clarify the situations to get more clearness regarding the circumstance available.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Concept X, many managers believe that juniors are easy as well as lazy, have little aspiration and stand up to modification. The scenario at Covalent Term Loan For Expansion And Modernization is not totally adhering to Theory X, it can be seen that brand-new hires are finding this environment rather stressful which may ultimately lead to a higher inclination of the monitoring towards Concept X. Even while assessing Lewis's administration style, concept X might have been appropriate in the operations department to some extent but the Advertising and marketing division would certainly call for dependence on Concept Y in order to obtain the imagination and creativity from the teams.

Tuckman's Team effort Concept: As far as Lewis's concern regarding bringing consistency in between the advertising and marketing department is concerned, this would originally lead to clash as discussed by Bruce Tuckman in his 'Team effort Theory'. By integrating the marketing and also marketing department's job, there might be the same first detach which can lead to the 2nd phase of 'storming' where the groups test one another.

When individuals are provided with change, they enter phase one and also so there might be feelings like despair, unpredictability, aggravation, rage, anxiety, rejection as well as disorientation.The circumstance at the marketing department of Covalent Term Loan For Expansion And Modernization is comparable so Lewis can obtain comfortable with the concept that it is not remarkable habits. It is throughout this phase that Lewis will have to give advice to the division so that they can locate a feeling of direction. It can be seen how Krasnow has actually currently made this shift less complicated by making Lewis get entailed in the department a year before his actual separation.
Vrio Analysis
Maslow's Need pecking order: The OB issue pertaining to insecurity at the work environment has actually been caused firstly by the modification in monitoring as well as secondly by the reality that the merging will certainly no longer be initiated. Abraham Maslow in his Concept of 'Requirements Power structure' (appendix 5) has talks about the value of 'protection requires as being a lower level need of a human for setting off inspiration. As seen in the pyramid shared in appendix 3, we can see exactly how 'the need to feel secure and also untouched' goes to the 2nd degree of needs. Prior to a worker can be made to develop emotionally, he requires to have his 'Physiological 'and 'Safety' requires fulfilled. This suggests that unless the employees are made to feel protected regarding their current employment standing in Covalent Term Loan For Expansion And Modernization they may not reach 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Covalent Term Loan For Expansion And Modernization Case Study

Implication of Analysis.

The OB analysis has looked at numerous theories to understand how to handle the present situation at hand. The following three alternatives have actually been suggested to help Lewis manage the organizational difficulties in the marketing division. Each of these options has been recommended for alleviating the change required to bring the advertising and marketing department in accordance with the requirements of the marketplace and for making the cultural modification that would certainly follow as soon as the present leader leaves.

Combination of marketing and advertising functions. Dividing Adverting and also Production features. Integration of Advertising with Operations.

Evaluation of Alternatives.

Assimilation of Marketing & Marketing Functions: The internal advertising and marketing company of Covalent Term Loan For Expansion And Modernization is currently toughness for the company in regards to saving up on expenses connected to marketing and also promotion. Because no new recruitment has actually been done after Bridget Cole's departure with the reporting line being directly designated to Krasnow for the advertising function, this is a beneficial opportunity for integrating the advertising and marketing functions. Judith Shapiro that has earlier been talked to by Lewis during the earlier merger days has experience in business-to-business advertising along with company as well as retail marketing experience. Once Krasnow leaves, Lewis can work with Shapiro as an EVP for advertising to manage both advertising and marketing features.

The benefit of this technique is that it will integrate the two functions while reducing the need for working with an additional resource for advertising. In addition to this, Lewis would be heading the marketing department as well as all the same her replacement would certainly be needed for the present function that she is executing. The disadvantage of this choice is that exterior hiring may bring about animosity from interior employees that may be looking at the setting of EVP after Lewis takes over Krasnow's position.

Dividing Adverting and Production: Given the affordable stress and also high top quality work required from the marketing company, it is advised that Lewis should allow the manufacturing device to be a separate function from the advertising and marketing unit. Given that most advertising firms had these two functions as separate devices, it makes more sense to adhere to the standard.

Assimilation of Advertising with Operations: Since Lewis is already taking care of the advertising and also procedures departments concurrently; it makes sense to integrate the two features because she has actually been efficiently taking care of both ends. The reality that Lewis has to adjust her administration style for the advertising and marketing department recommends that these two divisions would certainly be culturally varied.


An evaluation of the three options suggests that assimilation of advertising and also procedures would not be a feasible step due to the huge differences between the 2 departments in spite of the fact that currently Lewis is managing both. While separation of the manufacturing feature might have been a favorable relocation for the advertising and marketing division, the fact that it would certainly mean placing a 3rd function under Lewis's wing suggests this must be avoided.

Activity Plan.
Lewis will certainly take control of the duty of EVP Advertising after Krasnow leaves.

Marketing and advertising features would be merged.

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

Production feature will continue to be component of marketing under marketing feature.

Lewis will certainly divide herself from operations.

A democratic management style with staff member empowerment will certainly be utilized in marketing division.

Open door policy and also focus on cross department communication will certainly be focused on eliminating dissonance.

Backup plan.

If the combination does not work out as planned, a backup plan would comply with which would divide the manufacturing function from the advertising and marketing feature to lower the lots on the SVP of advertising and marketing. In case Judith Shapiro does not obtain employed, Lewis will certainly be heading the marketing division without an SVP. Because case the manufacturing function will most definitely be separated by placing it under an SVP manufacturing.