Donna Karan International Inc Case Study Solution


Home >> Harvard >> Donna Karan International Inc >>

Donna Karan International Inc Case Study Solution

Background and Facts

Donna Karan International Inc an office products retailer for small and medium sized businesses has lately been associated with planning for a merger with its competitor Home Deport, which has actually influenced performance levels in departmentswith the senior supervisor involved in lawful complications presented by the federal Trade Payment. With the Advertising Head putting forward the information of his departure from the firm in one year, Jeannie Lewis, the current head of procedures has actually been asked to take the duty in the future. With difficulties in the kind of a prospective social adjustment as well as reduced employee spirits, the company is in need of a total reengineering effort at the advertising and marketing division.

Issue Declaration
Porter's 5 Forces Analysis
The prospective cultural adjustment at the marketing department of Donna Karan International Inc is raising unpredictability in the workplace leading to different obstacles for the Jeannie Lewis who would be replacing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant function in affecting strategic choices given that Stapes Inc. had to desert its plans of combining with Workplace Deport after the Federal Profession Payment's intervention in the process. Offered the fact that the store has a worldwide existence with branches in UK, UNITED STATES, Canada and Germany, political factors in each of these countries might have the ability to influence efficiency or strategic objectives. Federal Profession Compensation's antitrust suit versus the merger took up important time of the company's elderly management suggesting that 'political' factors can have significant ramifications for an international organisation.

Economic Factors: Financial factors such as the emergence of small businesses in the international circumstance suggest that Donna Karan International Inc is thriving in an atmosphere where there is prospective growth of organisations. Fact that shop consumers are mostly looking for workplace supplies for residence offices recommends that the market has a rising pattern of business owners as well as house based organisations.

Social factors: Social patterns in the economy reveal that customers are seeking benefit along with eye-catching rates. Market research shows how the consumer for Donna Karan International Inc lacks understanding about finding solutions which can provide a combination of convenience and low costs.

Technological factors: Modern technology plays a crucial duty in Donna Karan International Inc's business strategy specifically as the organization is piloting Innovation centers which would certainly provide innovation sales and also support in the type of memory upgrades, outer setups. (Summary of BUG in appendix 2).

OB Issues as well as Symptoms.

Numerous underlying Business Behavior problems can be seen in Donna Karan International Inc's case as highlighted in this area.

Worries concerning cultural modification: There is apprehension regarding a social adjustment that would certainly happen as soon as Todd Krasnow leaves from his placement as the Exec Vice President of Advertising And Marketing with a lot of the staff members already showing discontent over this prospective step. This predicted adjustment has created stress and anxiety in the workplace which has been combined with the previous tension of preparing the company for a possible merging with Home Deport.
Pest Analysis
Difficult Job Setting for Newcomers: There is lack of employees that can match the stressful environment of a busy organization. Not just does this cause problem in locating the appropriate people, it places tension on brand-new hires as can not stand up to the rate and pressure that the organization anticipates them to bear.

Dual Coverage Lines: Beginners discover this organizational society troublesome as well as difficult to deal with specifically as dotted line partnerships are suggested to be weaker in general and also objective setup and performance assessment is still done by the solid line manager. This suggests that novices could lose quality concerning their corresponding roles and objectives particularly as dotted line coverage does not maintain them in straight communication with the solid line supervisors.

Resentment From Cross Departmental Hiring: Krasnow's choice to make Lewis his successor instead of Bridget Coles even though it had been speculated that the last would take Krasnow's position came as a strike to her spirits. Lewis may have been qualified and also ideal for the task yet the reality that Kransnow's separation would make Coles a straight record to Lewis may have been the factor for Coles' resignation from services.

Fear & Work Insecurity: Fear as well as insecurity can be recognized as two major worries that Lewis would be managing especially as the merger has actually currently be cancelled and two elderly execs of the advertising department would certainly be leaving. The entire obligation of the division would certainly be dropping on Lewis's shoulders that would certainly not just supervise of brining about a social change but would certainly also have to prove herself in her brand-new function.

Incompatible Management Style of Leader: Lewis's administration style as well as its conflict with the marketing department's function can likewise be seen as an OB obstacle particularly as she has actually been used to taking care of issues in the operations department where workers are educated to concentrate on processes and get them. The marketing division on the various other hand can be seen as a group of people that are utilized to being supported by Krasnow that concentrated much more on output than procedures.

Interdepartmental Arguments: Interdepartmental differences between 3 divisions, marketing, merchandizing and also procedures specifically over the allowance of the marketing mix can be identified as an additional OB problem. Although the advertising and marketing department does not share the very same vision as the various other 2 divisions pertaining to the aloocation of the advertising and marketing mix twoards promotions as well as advertsing, the merchandizing and also operations departments do not agree over the advertising mix allocation amongst one another either.

Disintegration in Marketing Division: Fragmentation in between the advertising and marketing departments can be identified as one more OB concern which might need more focus. The reality that the advertising and marketing areas in the marketing department are separated is preventing both departments from obtaining from each other's experience and competence. Assimilation of marketing with merchandising and also procedures would certainly become harder if the advertising department itself is degenerated which can be another possible OB worry.

Donna Karan International Inc Analysis

Numerous theories have actually been made use of to discuss the scenarios to obtain further clearness about the situation handy.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, the majority of supervisors believe that juniors are easy as well as careless, have little passion and stand up to adjustment. The tough variation of this theory highlighted coercion, limited controls, dangers and also punishments. Gradually it produces reduced efficiency, subtle sabotage as well as competition (Offer, 2003). Although the scenario at Donna Karan International Inc is not completely complying with Theory X, it can be seen that new hires are discovering this atmosphere instead demanding which may at some point bring about a higher disposition of the management towards Concept X. Based on McGregor's advocated sight, which he called Theory Y, the important job of the management is to arrange business problems to make sure that individuals can attain their own objectives best by directing their initiatives towards organizational rewards. If people find no satisfaction in their work, the monitoring would have little choice but to depend on concept X and also outside control (Deal, 2003). Even while examining Lewis's administration design, theory X might have been suitable in the procedures department to some extent but the Advertising and marketing division would call for reliance on Concept Y in order to get the creative thinking and also creativity from the teams.

Tuckman's Synergy Theory: As far as Lewis's concern regarding bringing consistency in between the marketing and advertising department is concerned, this would initially lead to clash as reviewed by Bruce Tuckman in his 'Teamwork Theory'. By combining the marketing and advertising and marketing department's work, there may be the very same first separate which might lead to the second stage of 'storming' where the teams challenge one an additional.

When individuals are offered with adjustment, they go into phase one and also so there might be feelings like sadness, uncertainty, irritation, temper, anxiety, rejection as well as disorientation.The circumstance at the marketing division of Donna Karan International Inc is similar so Lewis can obtain comfortable with the suggestion that it is not amazing habits. It is throughout this stage that Lewis will have to give assistance to the division so that they can locate a sense of direction. It can be seen just how Krasnow has actually already made this change easier by making Lewis get included in the division a year before his actual departure.
Vrio Analysis
Abraham Maslow in his Theory of 'Needs Power structure' (appendix 5) has goes over the importance of 'security needs as being a reduced level requirement of a human for setting off motivation. As seen in the pyramid shared in appendix 3, we can see exactly how 'the requirement to really feel safe and also out of risk' is at the 2nd degree of demands. Before a staff member can be made to establish emotionally, he needs to have his 'Physiological 'as well as 'Security' needs fulfilled.

SWOT Analysis for Donna Karan International Inc Case Study

Ramification of Analysis.

The OB analysis has actually taken a look at numerous concepts to understand exactly how to manage the current scenario handy. The complying with 3 options have actually been proposed to aid Lewis deal with the business challenges in the marketing department. Each of these options has actually been recommended for easing the change needed to bring the advertising department in accordance with the demands of the marketplace and for making the social adjustment that would certainly adhere to when the existing leader leaves.

Combination of marketing and advertising features. Separating Adverting as well as Manufacturing functions. Integration of Advertising with Workflow.

Analysis of Alternatives.

Integration of Marketing & Advertising And Marketing Functions: The in-house advertising and marketing company of Donna Karan International Inc is already toughness for the organization in regards to conserving up on overheads associated with marketing and also promo. Because no new employment has actually been done after Bridget Cole's departure with the coverage line being directly appointed to Krasnow for the advertising and marketing feature, this is a beneficial possibility for integrating the marketing and advertising features. Judith Shapiro that has actually earlier been spoken with by Lewis throughout the earlier merger days has expertise in business-to-business advertising together with firm and retail advertising and marketing experience. Once Krasnow leaves, Lewis can work with Shapiro as an EVP for advertising to handle both marketing and advertising functions.

The benefit of this technique is that it will certainly integrate both functions while reducing the need for hiring an extra resource for advertising. Lewis would be heading the advertising and marketing department and in any kind of case her replacement would be needed for the existing role that she is performing. The disadvantage of this option is that outside hiring may bring about animosity from interior employees who might be considering the setting of EVP after Lewis takes over Krasnow's position.

Separating Adverting as well as Production: Offered the affordable pressures and high top quality job required from the advertising agency, it is advised that Lewis needs to allow the manufacturing system to be a different feature from the marketing system. Given that a lot of advertising companies had these two functions as separate devices, it makes more feeling to comply with the standard.

Combination of Advertising And Marketing with Workflows: Given that Lewis is already taking care of the marketing and procedures divisions all at once; it makes feeling to integrate the 2 functions since she has been effectively taking care of both ends. The fact that Lewis has to adapt her monitoring design for the marketing division suggests that these 2 divisions would be culturally diverse.


An analysis of the 3 alternatives indicates that assimilation of advertising as well as operations would certainly not be a possible step due to the substantial differences between the 2 departments despite the reality that presently Lewis is taking care of both. While separation of the manufacturing feature might have been a positive step for the advertising and marketing department, the truth that it would certainly indicate putting a third feature under Lewis's wing means this need to be stayed clear of.

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

Marketing and advertising functions would be merged.

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

Production function will remain component of marketing under marketing feature.

Lewis will divide herself from procedures.

An autonomous leadership design with employee empowerment will be utilized in advertising division.

Open door plan as well as focus on cross department interaction will certainly be aimed at eliminating disharmony.

Backup plan.

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