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


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

Background and Facts

Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc B an office supplies retailer for tiny and moderate sized organisations has actually recently been involved in planning for a merger with its rival House Deport, which has actually influenced efficiency degrees in departmentswith the senior supervisor involved in legal problems presented by the government Profession Payment. With the Advertising Head advancing the news of his departure from the company in one year, Jeannie Lewis, the existing head of operations has been asked to take the role in the future. With obstacles in the type of a possible social adjustment as well as low employee morale, the company is in need of a complete reengineering effort at the marketing division.

Trouble Declaration
Porter's 5 Forces Analysis
The potential cultural change at the advertising and marketing division of Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc B is raising uncertainty in the working environment bring about numerous difficulties for the Jeannie Lewis who would be replacing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a major duty in impacting strategic choices since Stapes Inc. needed to desert its plans of merging with Office Deport after the Federal Trade Compensation's intervention in the process. Offered the fact that the shop has a global visibility with branches in UK, U.S.A., Canada and also Germany, political factors in each of these countries might be able to influence efficiency or calculated objectives. Federal Profession Payment's antitrust suit against the merging used up valuable time of the organization's senior management recommending that 'political' factors can have severe effects for an international organisation.

Economic Factors: Financial factors such as the appearance of small businesses in the global situation recommend that Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc B is prospering in a setting where there is possible development of services. In addition to this, truth that store consumers are mostly searching for workplace supplies for office suggests that the market has a climbing trend of entrepreneurs and home companies.

Social factors: Social patterns in the economic climate show that clients are seeking ease as well as eye-catching rates. Marketing research shows how the customer for Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc B does not have awareness about finding solutions which can supply a mix of benefit and also inexpensive.

Technological factors: Modern technology plays an important role in Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc B's business method particularly as the organization is piloting Innovation centers which would offer modern technology sales as well as support in the form of memory upgrades, peripheral installations. (Summary of INSECT in appendix 2).

OB Issues and also Symptoms.

Numerous underlying Organizational Behavior issues can be seen in Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc B's case as highlighted in this section.

Apprehensions about cultural modification: There is worry regarding a cultural change that would certainly happen when Todd Krasnow leaves from his setting as the Exec Vice Head Of State of Advertising with a lot of the team member currently revealing unhappiness over this potential relocation. This expected adjustment has developed stress in the workplace which has been coupled with the previous anxiety of preparing the firm for a potential merging with Residence Deport.
Pest Analysis
Demanding Job Environment for Newcomers: There is shortage of workers that can match the stressful atmosphere of a hectic organization. Not only does this cause problem in finding the ideal people, it puts anxiety on new hires as can not hold up against the rate and stress that the company anticipates them to bear.

Dual Coverage Lines: Novices locate this business society troublesome as well as hard to handle particularly as dotted line partnerships are implied to be weaker as a whole and objective setting and also performance analysis is still done by the solid line supervisor. This suggests that newbies might shed clearness concerning their respective roles and objectives particularly as populated line reporting does not keep them in direct communication with the strong line supervisors.

Animosity From Cross Departmental Hiring: Krasnow's choice to make Lewis his successor rather than Bridget Coles even though it had been speculated that the last would certainly take Krasnow's placement came as a blow to her spirits. Lewis might have been capable and also proper for the job but the fact that Kransnow's departure would certainly make Coles a direct report to Lewis might have been the reason for Coles' resignation from solutions.

Worry & Work Insecurity: Worry and instability can be identified as 2 major worries that Lewis would be managing specifically as the merging has actually now be terminated and also 2 elderly executives of the marketing division would certainly be leaving. The whole duty of the division would certainly be dropping on Lewis's shoulders that would certainly not just supervise of brining concerning a cultural modification yet would certainly also have to confirm herself in her brand-new role.

Incompatible Management Style of Leader: Lewis's monitoring style as well as its conflict with the advertising division's function can also be viewed as an OB difficulty particularly as she has actually been used to handling concerns in the procedures department where workers are shown to focus on procedures and also obtain them right. The advertising and marketing division on the various other hand can be seen as a team of people that are made use of to being nurtured by Krasnow that focused much more on output than processes.

Interdepartmental Differences: Interdepartmental disagreements in between 3 departments, advertising and marketing, merchandizing and also operations specifically over the allowance of the advertising and marketing mix can be recognized as an additional OB issue. Although the advertising and marketing department does not share the very same vision as the other two departments concerning the aloocation of the advertising and marketing mix twoards promotions and advertsing, the merchandizing and operations divisions do not concur over the advertising and marketing mix allotment amongst each other either.

Disintegration in Advertising Department: Fragmentation between the advertising and marketing divisions can be determined as an additional OB concern which might require additional attention. The truth that the advertising and marketing sections in the marketing division are detached is preventing both departments from gaining from each various other's experience as well as knowledge. Assimilation of advertising with merchandising as well as procedures would become harder if the marketing division itself is disintegrated which can be an additional prospective OB issue.

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

Numerous concepts have been made use of to describe the situations to get additional clarity about the situation at hand.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Theory X, a lot of managers think that subordinates are passive and also careless, have little aspiration and also withstand adjustment. The circumstance at Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc B is not entirely following Concept X, it can be seen that new hires are locating this atmosphere rather difficult which might ultimately lead to a higher inclination of the monitoring in the direction of Theory X. Even while examining Lewis's monitoring design, theory X might have been appropriate in the operations department to some level yet the Advertising division would call for reliance on Theory Y in order to get the creativity as well as creativity from the teams.

Tuckman's Teamwork Theory: As far as Lewis's issue concerning bringing consistency between the marketing and advertising division is worried, this would initially cause clash as talked about by Bruce Tuckman in his 'Synergy Theory'. (Tuckman, 1965). Based on Tuckman's theory shown in appendix 3, during the preliminary stage of group advancement, individuals might not bond, as they are busy finding their place in the team. By integrating the advertising and marketing division's work, there might coincide preliminary detach which might lead to the second phase of 'storming' where the groups test one another. It is only during the third phase or 'norming' when they would certainly come with each other to share ideas before the group can bring about harmony in the fourth stage 'carrying out'.

Bridges' Transition Model: According To William Bridge's theory (appendix 4), individuals are rather uncomfortable with adjustment, which is evident by the scenario at Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc B The situation can be viewed as a normal program of life if is studied according to Bridge's theory where he explains that people undergo three phases of transition when they experience modification. 'Closing, shedding as well as Releasing', The Neutral Area and 'The New Starting' (Bridges, 2004). When people are presented with adjustment, they get in stage one and so there might be emotions like unhappiness, unpredictability, disappointment, rage, fear, denial and also disorientation.The situation at the advertising division of Deferred Taxes And The Valuation Allowance At Lucent Technologies Inc B is similar so Lewis can get comfortable with the suggestion that it is not amazing habits. In the second stage, there might be a demand to link the gap in between the brand-new as well as old culture so Lewis may have to encounter this challenge when Krasnow leaves. There might be reduced spirits and also reduced efficiency at this stage which must not be taken as a setback. It is during this phase that Lewis will have to provide support to the division to make sure that they can locate an orientation. It can be seen how Krasnow has actually already made this change much easier by making Lewis get involved in the division a year prior to his actual separation. According to Bridges' Design, phase three will bring about openness to knowing, High power as well as dedication as individuals will embrace the adjustment (Bridges, 2004).
Vrio Analysis
Abraham Maslow in his Concept of 'Requirements Pecking order' (appendix 5) has discusses the importance of 'safety requires as being a lower level need of a human for causing inspiration. As seen in the pyramid shared in appendix 3, we can see how 'the demand to really feel protected and out of danger' is at the 2nd level of demands. Prior to a staff member can be made to establish mentally, he needs to have his 'Physical 'and also 'Security' needs met.

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

Ramification of Analysis.

The OB analysis has actually looked at different theories to understand just how to manage the present scenario handy. The following three alternatives have actually been proposed to help Lewis deal with the organizational difficulties in the marketing department. Each of these alternatives has actually been proposed for relieving the transition needed to bring the advertising and marketing division according to the demands of the marketplace as well as for making the social change that would comply with when the present leader leaves.

Combination of marketing and advertising features. Separating Adverting and also Manufacturing features. Integration of Advertising And Marketing with Procedures.

Assessment of Alternatives.

Judith Shapiro who has actually earlier been interviewed by Lewis during the earlier merger days has proficiency in business-to-business advertising and marketing along with company as well as retail advertising experience. When Krasnow leaves, Lewis can hire Shapiro as an EVP for advertising and marketing to handle both advertising and marketing and also marketing functions.

The advantage of this technique is that it will certainly incorporate both features while decreasing the need for working with an extra source for advertising. Lewis would be heading the advertising and marketing department and in any case her replacement would certainly be required for the existing function that she is carrying out. The negative aspect of this choice is that external hiring might cause resentment from inner workers who may be looking at the placement of EVP after Lewis takes control of Krasnow's setting.

Separating Adverting and Production: Offered the affordable pressures and also high top quality work called for from the advertising and marketing agency, it is suggested that Lewis needs to enable the production system to be a separate feature from the marketing unit. Considering that a lot of advertising firms had these two functions as separate units, it makes even more feeling to adhere to the norm.

Combination of Advertising with Workflows: Since Lewis is already looking after the advertising and marketing and also operations divisions all at once; it makes good sense to integrate the two functions considering that she has been efficiently looking after both ends. The truth that the two departments already have significant differences over allowance of sources suggests that this assimilation may have the ability to produce consistency specifically as Lewis would certainly be heading both ends.However there are various drawbacks of this action specifically as it would place way too much burden over Lewis's shoulders. The truth that Lewis needs to adjust her monitoring design for the marketing division suggests that these 2 departments would be culturally varied. Along with this, Lewis might not have the ability to use one type of management style to both departments which could result in ineffectiveness in either one of both features.


An evaluation of the 3 choices shows that integration of advertising and marketing as well as procedures would not be a viable action because of the huge distinctions between the two departments although that presently Lewis is managing both. While splitting up of the manufacturing feature might have been a favorable move for the marketing division, the reality that it would certainly indicate positioning a 3rd function under Lewis's wing means this need to be prevented also. The assimilation of the marketing department is the most effective option in regards to getting the optimal results from the division. An activity prepare for this alternative is talked about below.

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

Marketing and advertising features would certainly be combined.

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

Production feature will certainly remain part of advertising and marketing under advertising and marketing function.

Lewis will separate herself from operations.

An autonomous leadership design with staff member empowerment will certainly be used in advertising and marketing division.

Open up door plan as well as emphasis on cross departmental communication will be focused on eliminating discord.

Backup strategy.

If the combination does not exercise as intended, a contingency strategy would certainly follow which would certainly separate the production feature from the advertising and marketing feature to reduce the tons on the SVP of advertising and marketing. In case Judith Shapiro does not obtain worked with, Lewis will be heading the marketing division without an SVP. In that case the production feature will definitely be divided by putting it under an SVP manufacturing.