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Diamond Energy Resources Case Study Solution

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Background and Facts

Diamond Energy Resources an office materials retailer for little and medium sized organisations has actually recently been involved in planning for a merging with its competitor House Deport, which has actually influenced performance degrees in departmentswith the elderly manager involved in lawful difficulties put forth by the federal Trade Commission. With the Advertising Head putting forward the news of his departure from the company 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 type of a possible social change as well as reduced employee morale, the company is in need of a complete reengineering initiative at the advertising department.

Problem Statement
Porter's 5 Forces Analysis
The potential social modification at the advertising and marketing division of Diamond Energy Resources is increasing uncertainty in the working environment resulting in various obstacles for the Jeannie Lewis who would certainly be replacing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a major function in affecting strategic choices since Stapes Inc. needed to abandon its plans of combining with Workplace Deport after the Federal Trade Compensation's intervention at the same time. Provided the fact that the store has a global existence with branches in UK, USA, Canada and also Germany, political factors in each of these countries may have the ability to affect efficiency or critical goals. Federal Trade Commission's antitrust match against the merger took up valuable time of the organization's senior management recommending that 'political' factors can have severe implications for a global business.

Economic Factors: Financial factors such as the introduction of local business in the global scenario recommend that Diamond Energy Resources is prospering in a setting where there is prospective development of services. Fact that store consumers are primarily looking for office supplies for home offices suggests that the market has a rising fad of entrepreneurs and home based services.

Social factors: Social trends in the economic climate show that consumers are searching for benefit along with appealing costs. Marketing research shows how the consumer for Diamond Energy Resources lacks awareness regarding finding solutions which can provide a mix of comfort as well as inexpensive.

Technological factors: Modern technology plays a crucial duty in Diamond Energy Resources's service technique particularly as the organization is piloting Modern technology centers which would use modern technology sales as well as assistance in the type of memory upgrades, peripheral setups. (Summary of BUG in appendix 2).

OB Issues and Effects.

A number of underlying Organizational Behavior concerns can be seen in Diamond Energy Resources's case as highlighted in this area.

Concerns regarding cultural adjustment: There is apprehension concerning a cultural adjustment that would take place when Todd Krasnow leaves from his placement as the Executive Vice Head Of State of Advertising And Marketing with the majority of the staff members currently revealing unhappiness over this prospective step. This expected adjustment has actually developed stress in the workplace which has been paired with the past anxiety of preparing the company for a prospective merger with House Deport.
Pest Analysis
Difficult Work Atmosphere for Newcomers: There is lack of personnel that can match the stressful environment of a hectic company. Not just does this bring about trouble in locating the best individuals, it puts anxiety on brand-new hires as can not withstand the rate and pressure that the company anticipates them to birth.

Dual Reporting Lines: Beginners locate this business society difficult and also hard to cope with especially as populated line relationships are indicated to be weaker generally as well as objective setting as well as efficiency analysis is still done by the strong line supervisor. This suggests that novices can shed quality regarding their corresponding roles as well as goals particularly as populated line coverage does not keep them in straight communication with the solid line managers.

Bitterness From Cross Departmental Hiring: Krasnow's decision to make Lewis his follower rather than Bridget Coles despite the fact that it had actually been guessed that the latter would take Krasnow's setting came as a blow to her spirits. Lewis may have been qualified and ideal for the job yet the reality that Kransnow's departure would make Coles a direct report to Lewis may have been the reason for Coles' resignation from solutions.

Anxiety & Task Insecurity: Anxiety as well as instability can be determined as 2 significant problems that Lewis would be taking care of particularly as the merger has actually currently be cancelled and also two senior executives of the advertising department would be leaving. The entire duty of the department would be falling on Lewis's shoulders that would not simply be in charge of brining concerning a cultural modification but would certainly additionally need to confirm herself in her brand-new function.

Inappropriate Management Style of Leader: Lewis's monitoring design as well as its incompatibility with the advertising division's role can also be seen as an OB difficulty specifically as she has been used to taking care of problems in the procedures division where personnel are taught to focus on procedures and get them. The advertising division on the various other hand can be viewed as a team of individuals who are utilized to being nurtured by Krasnow who concentrated more on output than processes.

Interdepartmental Differences: Interdepartmental disputes in between 3 divisions, advertising and marketing, merchandizing as well as procedures respectively over the allowance of the marketing mix can be recognized as one more OB concern. Although the advertising and marketing division does not share the exact same vision as the various other two divisions pertaining to the aloocation of the advertising mix twoards promos as well as advertsing, the merchandizing and also operations departments do not agree over the marketing mix appropriation amongst one another either.

Disintegration in Advertising Department: Disintegration in between the advertising and marketing divisions can be determined as one more OB issue which could need additional interest. The truth that the advertising and marketing sections in the advertising and marketing department are detached is protecting against both divisions from acquiring from each other's experience and experience. Combination of advertising and marketing with retailing and also procedures would certainly come to be harder if the advertising and marketing department itself is degenerated which can be one more potential OB issue.

Diamond Energy Resources Analysis

Various concepts have actually been made use of to discuss the circumstances to obtain more clearness about the situation handy.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, the majority of supervisors think that juniors are passive and careless, have little ambition as well as stand up to change. The circumstance at Diamond Energy Resources is not entirely following Theory X, it can be seen that new hires are discovering this environment rather stressful which may at some point lead to a better disposition of the monitoring towards Theory X. Even while analyzing Lewis's management style, theory X might have been ideal in the procedures department to some level however the Advertising and marketing division would certainly need reliance on Concept Y in order to get the creativity and creativity from the groups.

Tuckman's Team effort Theory: As far as Lewis's worry concerning bringing harmony between the marketing and advertising division is concerned, this would originally result in conflict as talked about by Bruce Tuckman in his 'Synergy Theory'. (Tuckman, 1965). As per Tuckman's theory displayed in appendix 3, throughout the first stage of team growth, individuals might not bond, as they are active discovering their area in the group. By combining the marketing and advertising department's work, there may be the same initial disconnect which could result in the 2nd stage of 'storming' where the teams challenge one another. However, it is just throughout the third stage or 'norming' when they would certainly come together to share ideas before the group can cause synergy in the fourth phase 'carrying out'.

Bridges' Change Version: Based On William Bridge's theory (appendix 4), individuals are quite uneasy with modification, which is evident by the situation at Diamond Energy Resources The circumstance can be viewed as a typical program of life if is examined according to Bridge's concept where he describes that individuals experience three stages of transition when they experience modification. 'Closing, losing and also Letting go', The Neutral Zone as well as 'The New Starting' (Bridges, 2004). When people are presented with modification, they get in stage one therefore there might be feelings like unhappiness, uncertainty, disappointment, anger, worry, rejection and also disorientation.The circumstance at the advertising department of Diamond Energy Resources is comparable so Lewis can get comfortable with the suggestion that it is not amazing habits. In the second stage, there may be a requirement to link the space in between the brand-new and old society so Lewis might need to encounter this challenge when Krasnow leaves. There might be low spirits as well as reduced efficiency at this phase which must not be taken as an obstacle. It is during this stage that Lewis will have to provide assistance to the department so that they can discover an orientation. It can be seen just how Krasnow has actually already made this transition much easier by making Lewis get involved in the division a year prior to his actual separation. As per Bridges' Model, phase 3 will produce visibility to discovering, High power and dedication as people will embrace the adjustment (Bridges, 2004).
Vrio Analysis
Abraham Maslow in his Theory of 'Needs Hierarchy' (appendix 5) has discusses the value of 'safety and security needs as being a reduced degree demand of a human for activating inspiration. As seen in the pyramid shared in appendix 3, we can see exactly how 'the need to really feel safe and secure as well as out of danger' is at the second level of needs. Before a staff member can be made to establish emotionally, he needs to have his 'Physiological 'as well as 'Safety' requires met.

SWOT Analysis for Diamond Energy Resources Case Study



Implication of Analysis.

The OB analysis has actually taken a look at different theories to comprehend exactly how to deal with the existing scenario available. The following 3 options have actually been suggested to aid Lewis take care of the business difficulties in the advertising division. Each of these choices has actually been proposed for alleviating the change required to bring the advertising and marketing department in line with the needs of the market as well as for making the cultural adjustment that would adhere to when the existing leader leaves.

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

Evaluation of Alternatives.

Judith Shapiro who has actually earlier been spoken with by Lewis throughout the earlier merging days has expertise in business-to-business advertising along with company as well as retail advertising and marketing experience. As soon as Krasnow leaves, Lewis can employ Shapiro as an EVP for advertising and marketing to deal with both marketing as well as marketing functions.

The benefit of this technique is that it will integrate the two functions while minimizing the need for hiring an extra source for advertising and marketing. Lewis would certainly be heading the advertising department as well as in any type of case her substitute would be needed for the current duty that she is executing. The negative aspect of this alternative is that external hiring may produce resentment from internal workers that may be looking at the placement of EVP after Lewis takes over Krasnow's position.

Dividing Adverting and Manufacturing: Provided the affordable stress as well as high quality job called for from the advertising and marketing firm, it is advised that Lewis must permit the manufacturing system to be a separate feature from the marketing system. Given that a lot of advertising firms had these two features as different units, it makes even more feeling to comply with the standard.

Combination of Advertising And Marketing with Procedures: Given that Lewis is already taking care of the marketing and also procedures departments all at once; it makes feeling to incorporate the 2 functions considering that she has actually been successfully taking care of both ends. The reality that Lewis has to adapt her management style for the advertising and marketing division recommends that these two departments would be culturally varied.

Recommendation.



An evaluation of the three alternatives shows that assimilation of advertising and also operations would certainly not be a possible step due to the substantial distinctions in between the two departments in spite of the fact that currently Lewis is managing both. While separation of the manufacturing function might have been a favorable relocation for the advertising and marketing division, the fact that it would indicate placing a 3rd function under Lewis's wing means this must be prevented.

Activity Plan.
Recommendation
Lewis will take over the function of EVP Marketing after Krasnow leaves.

Marketing and advertising functions would be merged.

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

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

Lewis will certainly divide herself from procedures.

A democratic leadership design with employee empowerment will certainly be utilized in advertising and marketing department.

Open door plan and focus on cross department communication will be targeted at eliminating disharmony.

Contingency strategy.

If the integration does not work out as intended, a backup plan would certainly follow which would divide the production feature from the advertising and marketing function to decrease the load on the SVP of marketing and advertising. In case Judith Shapiro does not obtain employed, Lewis will certainly be heading the marketing department without an SVP. Because case the manufacturing feature will definitely be divided by placing it under an SVP manufacturing.