Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc A Case Study Solution


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Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc A Case Study Analysis

Background and Facts

Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc A a workplace materials seller for tiny and also average sized services has just recently been involved in preparing for a merger with its rival Home Deport, which has affected effectiveness degrees in departmentswith the elderly manager involved in legal complications put forth by the government Trade Payment. With the Advertising Head putting forward the information of his separation from the business in one year, Jeannie Lewis, the current head of operations has been asked to take the function in the future. With obstacles in the form of a possible social adjustment and reduced worker morale, the company needs a complete reengineering effort at the advertising department.

Trouble Statement
Porter's 5 Forces Analysis
The potential cultural adjustment at the marketing division of Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc A is boosting unpredictability in the working environment causing different challenges for the Jeannie Lewis who would be changing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a major function in impacting strategic choices because Stapes Inc. needed to abandon its strategies of merging with Office Deport after the Federal Trade Payment's intervention while doing so. Offered the fact that the shop has an international existence with branches in UK, USA, Canada as well as Germany, political consider each of these countries might have the ability to influence efficiency or calculated objectives. Federal Profession Compensation's antitrust match versus the merging used up useful time of the organization's elderly monitoring recommending that 'political' factors can have significant implications for a global organisation.

Economic Factors: Economic factors such as the appearance of small companies in the global scenario suggest that Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc A is growing in an environment where there is prospective growth of businesses. Truth that shop consumers are mainly looking for office products for home workplaces suggests that the market has a climbing trend of business owners and home based businesses.

Social factors: Social trends in the economic situation show that consumers are trying to find benefit in addition to eye-catching rates. Market research shows how the consumer for Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc A does not have awareness regarding locating remedies which can provide a mix of comfort and also affordable.

Technical factors: Innovation plays an important role in Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc A's organisation technique specifically as the company is piloting Innovation facilities which would use innovation sales as well as assistance in the form of memory upgrades, peripheral installations. (Recap of PEST in appendix 2).

OB Issues and Symptoms.

Several underlying Business Actions issues can be seen in Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc A's case as highlighted in this area.

Uneasiness about cultural modification: There is uneasiness regarding a cultural modification that would happen as soon as Todd Krasnow leaves from his setting as the Executive Vice President of Marketing with a lot of the employee currently revealing discontent over this possible step. This predicted adjustment has actually produced stress in the work environment which has been combined with the past anxiety of preparing the company for a prospective merging with House Deport.
Pest Analysis
Demanding Job Environment for Newcomers: There is shortage of personnel that can match the stressful atmosphere of a hectic organization. Not just does this bring about problem in locating the ideal people, it places tension on brand-new hires as can not endure the rate as well as stress that the organization anticipates them to bear.

Double Coverage Lines: Newcomers find this organizational society troublesome and tough to cope with particularly as populated line relationships are meant to be weaker in general as well as objective setup as well as efficiency examination is still done by the strong line manager. This suggests that novices might lose clarity about their respective roles and purposes particularly as dotted line coverage does not maintain them in straight interaction with the strong line supervisors.

Bitterness From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower instead of Bridget Coles even though it had been speculated that the latter would certainly take Krasnow's placement came as a strike to her morale. Lewis might have been capable and appropriate for the work yet the fact that Kransnow's separation would certainly make Coles a direct record to Lewis may have been the reason for Coles' resignation from solutions.

Fear & Task Instability: Concern as well as instability can be recognized as two major issues that Lewis would be managing especially as the merger has actually now be terminated as well as two senior execs of the marketing department would certainly be leaving. The entire obligation of the department would certainly be falling on Lewis's shoulders that would not simply supervise of brining regarding a cultural adjustment but would certainly additionally need to confirm herself in her brand-new role.

Inappropriate Management Style of Leader: Lewis's administration design and its conflict with the advertising and marketing department's function can also be seen as an OB difficulty specifically as she has actually been made use of to taking care of issues in the operations department where personnel are shown to focus on processes 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 supported by Krasnow who concentrated more on output than procedures.

Interdepartmental Disputes: Interdepartmental disputes between three departments, advertising, merchandizing as well as operations respectively over the allotment of the marketing mix can be recognized as another OB problem. The advertising division does not share the same vision as the other 2 divisions concerning the aloocation of the marketing mix twoards promos as well as advertsing, the merchandizing and also operations divisions do not agree over the advertising and marketing mix allotment among one an additional either.

Disintegration in Marketing Department: Fragmentation between the marketing and advertising divisions can be determined as an additional OB issue which might require further focus. The truth that the marketing and advertising areas in the advertising department are disconnected is protecting against both divisions from obtaining from each various other's experience as well as proficiency. Assimilation of advertising with merchandising and operations would certainly come to be more difficult if the advertising and marketing division itself is degenerated which can be one more prospective OB concern.

Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc A Analysis

Various theories have actually been utilized to clarify the scenarios to obtain more quality concerning the situation available.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Theory X, the majority of managers think that juniors are easy as well as lazy, have little ambition and also resist adjustment. The difficult version of this theory emphasized coercion, tight controls, hazards and also penalties. With time it creates reduced efficiency, subtle sabotage and also rivalry (Offer, 2003). Although the situation at Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc A is not completely adhering to Theory X, it can be seen that new hires are discovering this setting rather demanding which may at some point cause a higher disposition of the monitoring towards Theory X. Based on McGregor's promoted view, which he called Theory Y, the vital job of the monitoring is to organize business conditions so that people can achieve their very own objectives best by directing their efforts in the direction of organizational benefits. If people discover no fulfillment in their job, the administration would certainly have little choice but to rely upon theory X and also exterior control (Offer, 2003). Also while examining Lewis's management style, theory X may have been suitable in the operations department to some extent but the Advertising and marketing division would certainly call for reliance on Concept Y to get the creative thinking and also creativity from the teams.

Tuckman's Team effort Theory: As for Lewis's concern concerning bringing consistency in between the advertising and marketing department is concerned, this would originally result in clash as talked about by Bruce Tuckman in his 'Synergy Concept'. (Tuckman, 1965). As per Tuckman's theory shown in appendix 3, during the initial phase of team development, people may not bond, as they are active discovering their place in the group. By integrating the advertising and marketing department's job, there may be the same first detach which can cause the second phase of 'storming' where the teams test one another. It is just during the third stage or 'norming' when they would come with each other to share ideas prior to the team can bring about synergy in the fourth stage 'carrying out'.

Bridges' Change Design: According To William Bridge's concept (appendix 4), people are fairly uneasy with change, which is obvious by the situation at Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc A The situation can be seen as a typical training course of life if is studied according to Bridge's concept where he discusses that individuals undergo 3 stages of change when they experience modification. 'End, shedding as well as Letting go', The Neutral Area as well as 'The New Beginning' (Bridges, 2004). When individuals exist with modification, they get in stage one and so there may be feelings like sadness, unpredictability, irritation, anger, anxiety, rejection as well as disorientation.The situation at the marketing division of Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc A is similar so Lewis can get comfortable with the idea that it is not remarkable behavior. In the second phase, there may be a demand to link the gap in between the new as well as old culture so Lewis might have to face this experience once Krasnow leaves. There may be reduced morale and low performance at this phase which must not be taken as a setback. It is throughout this phase that Lewis will certainly have to give assistance to the department so that they can locate a sense of direction. It can be seen just how Krasnow has actually currently made this change much easier by making Lewis obtain associated with the division a year before his real departure. According to Bridges' Design, stage 3 will produce visibility to knowing, High power as well as commitment as individuals will embrace the change (Bridges, 2004).
Vrio Analysis
Abraham Maslow in his Concept of 'Needs Hierarchy' (appendix 5) has goes over the significance of 'security requires as being a reduced level need of a human for triggering inspiration. As seen in the pyramid shared in appendix 3, we can see just how 'the need to really feel secure and also out of risk' is at the 2nd level of requirements. Before a staff member can be made to establish psychologically, he needs to have his 'Physiological 'as well as 'Security' needs satisfied.

SWOT Analysis for Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc A Case Study

Ramification of Analysis.

The OB analysis has taken a look at numerous concepts to understand how to deal with the current circumstance at hand. The following 3 options have actually been proposed to aid Lewis manage the organizational difficulties in the advertising division. Each of these options has actually been recommended for relieving the change needed to bring the advertising division in accordance with the demands of the marketplace and for making the social change that would certainly comply with when the current leader leaves.

Integration of marketing and advertising functions. Separating Adverting and also Manufacturing features. Integration of Advertising with Operations.

Analysis of Alternatives.

Integration of Advertising And Marketing & Marketing Functions: The in-house advertising agency of Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc A is already stamina for the company in terms of conserving up on expenses related to marketing and also promotion. Because no new employment has actually been done after Bridget Cole's departure with the reporting line being directly assigned to Krasnow for the advertising function, this is a beneficial possibility for incorporating the marketing and advertising features. Judith Shapiro that has actually earlier been talked to by Lewis during the earlier merger days has proficiency in business-to-business advertising in addition to agency and retail advertising experience. Once Krasnow leaves, Lewis can hire Shapiro as an EVP for advertising to handle both marketing and advertising features.

The advantage of this technique is that it will integrate both features while reducing the need for employing an additional source for marketing. In addition to this, Lewis would be heading the advertising division and regardless her replacement would be required for the existing function that she is doing. The drawback of this alternative is that exterior hiring might cause bitterness from inner personnel that might be eying the setting of EVP after Lewis takes control of Krasnow's placement.

Separating Adverting as well as Manufacturing: Offered the competitive pressures as well as high quality work called for from the advertising agency, it is advised that Lewis must allow the manufacturing device to be a different feature from the marketing device. Given that a lot of advertising agencies had these 2 functions as separate devices, it makes even more sense to follow the standard. Both functions might be able to focus on their core triggers a lot more effectively. Nonetheless, the disadvantage of this method would certainly be that additional expenses would certainly have to be borne for establishing separate production features. A production head might have to be employed which could raise expenses for the organization.

Integration of Advertising with Procedures: Considering that Lewis is currently dealing with the marketing as well as operations divisions at the same time; it makes sense to integrate the two functions considering that she has actually been successfully looking after both ends. The reality that both divisions currently have significant differences over allowance of resources recommends that this integration might be able to cause consistency specifically as Lewis would certainly be heading both ends.However there are various drawbacks of this relocation specifically as it would certainly place too much concern over Lewis's shoulders. The fact that Lewis has to adjust her administration design for the marketing division recommends that these 2 divisions would be culturally diverse. In addition to this, Lewis might not be able to use one type of leadership style to both divisions which can lead to inefficiency in either among both functions.


An assessment of the three alternatives shows that integration of advertising and marketing and operations would certainly not be a viable action as a result of the substantial differences between the two divisions although that presently Lewis is managing both. While splitting up of the manufacturing feature may have been a favorable step for the advertising and marketing division, the fact that it would imply positioning a third function under Lewis's wing indicates this need to be avoided. The assimilation of the advertising and marketing department is the most effective option in regards to obtaining the optimum results from the department. An activity prepare for this option is gone over below.

Action Strategy.
Lewis will take control of the function of EVP Advertising and marketing after Krasnow leaves.

Advertising and Marketing features would certainly be merged.

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

Manufacturing feature will stay component of marketing under marketing function.

Lewis will separate herself from operations.

A democratic leadership design with employee empowerment will certainly be used in advertising division.

Open door policy as well as focus on cross department communication will certainly be aimed at eliminating dissonance.

Backup plan.

If the assimilation does not work out as intended, a contingency plan would certainly adhere to which would certainly divide the production feature from the advertising and marketing feature to lower the load on the SVP of marketing and advertising. In case Judith Shapiro does not get worked with, Lewis will be heading the advertising department without an SVP. Because case the manufacturing feature will definitely be separated by putting it under an SVP production.