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Donna Karan International Inc Case Study Analysis

CASE SOLUTION

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Donna Karan International Inc Case Study Analysis

Background and Facts

Donna Karan International Inc an office supplies retailer for tiny as well as moderate sized organisations has recently been associated with planning for a merger with its rival Residence Deport, which has actually influenced performance levels in departmentswith the elderly manager involved in legal difficulties put forth by the federal Trade Payment. With the Advertising Head putting forward the information of his separation from the company in one year, Jeannie Lewis, the present head of procedures has been asked to take the duty in the near future. With difficulties in the kind of a potential cultural adjustment and also reduced worker morale, the company wants a total reengineering effort at the marketing department.

Trouble Statement
Porter's 5 Forces Analysis
The potential social modification at the advertising division of Donna Karan International Inc is boosting uncertainty in the working environment causing various obstacles 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 role in affecting strategic decisions since Stapes Inc. needed to abandon its plans of combining with Office Deport after the Federal Trade Payment's intervention at the same time. Provided the reality that the store has an international visibility with branches in UK, USA, Canada and Germany, political consider each of these countries may have the ability to influence performance 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 significant ramifications for an international organisation.

Economic Factors: Economic factors such as the introduction of local business in the international circumstance recommend that Donna Karan International Inc is thriving in an atmosphere where there is prospective growth of companies. In addition to this, reality that shop consumers are mostly looking for workplace products for office suggests that the market has a rising pattern of entrepreneurs and home services.

Social factors: Social fads in the economic climate show that consumers are trying to find convenience as well as eye-catching costs. Market research shows how the consumer for Donna Karan International Inc lacks recognition concerning finding options which can offer a mix of comfort as well as affordable.

Technological factors: Technology plays an important duty in Donna Karan International Inc's organisation technique specifically as the company is piloting Innovation facilities which would certainly supply innovation sales as well as assistance in the form of memory upgrades, peripheral setups. (Summary of INSECT in appendix 2).

OB Issues and also Manifestations.

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

Apprehensions regarding cultural adjustment: There is worry about a social adjustment that would certainly occur as soon as Todd Krasnow leaves from his placement as the Exec Vice Head Of State of Marketing with a lot of the team member currently showing unhappiness over this possible step. This anticipated modification has actually produced tension in the workplace which has actually been coupled with the past tension of preparing the company for a prospective merging with House Deport.
Pest Analysis
Demanding Task Setting for Newcomers: There is scarcity of personnel that can match the stressful setting of a busy organization. Not just does this lead to trouble in finding the appropriate people, it puts stress and anxiety on new hires as can not stand up to the rate as well as stress that the company anticipates them to birth.

Dual Reporting Lines: Beginners locate this business society difficult and also challenging to cope with specifically as dotted line relationships are suggested to be weaker generally as well as objective setting and efficiency assessment is still done by the strong line manager. This means that novices can shed clarity regarding their corresponding roles and also goals specifically as populated line coverage does not keep them in straight interaction with the solid line managers.

Bitterness From Cross Departmental Hiring: Krasnow's choice to make Lewis his successor rather than Bridget Coles even though it had been hypothesized that the latter would certainly take Krasnow's placement came as an impact to her morale. Lewis may have been qualified as well as proper for the work but the reality that Kransnow's departure would certainly make Coles a direct report to Lewis might have been the reason for Coles' resignation from services.

Concern & Work Instability: Fear and also instability can be identified as two significant issues that Lewis would certainly be dealing with specifically as the merging has actually currently be cancelled and 2 senior execs of the advertising division would certainly be leaving. The entire responsibility of the division would certainly be falling on Lewis's shoulders who would not just be in charge of brining about a cultural change yet would also need to prove herself in her brand-new duty.

Incompatible Monitoring Design of Leader: Lewis's administration style and also its conflict with the marketing division's function can likewise be seen as an OB obstacle specifically as she has been used to dealing with problems in the procedures division where personnel are shown to focus on procedures as well as get them right. The advertising and marketing division on the other hand can be seen as a team of people who are made use of to being supported by Krasnow who concentrated much more on result than processes.

Interdepartmental Disagreements: Interdepartmental arguments in between 3 departments, advertising, merchandizing and also procedures respectively over the allowance of the advertising mix can be determined as one more OB worry. Although the advertising and marketing department does not share the exact same vision as the various other 2 departments relating to the aloocation of the advertising and marketing mix twoards promos as well as advertsing, the merchandizing and procedures divisions do not concur over the advertising mix allotment among each other either.

Disintegration in Marketing Department: Disintegration in between the advertising and marketing departments can be determined as another OB problem which can need additional interest. The fact that the advertising and marketing sections in the advertising and marketing division are separated is avoiding both divisions from getting from each other's experience and expertise. Assimilation of advertising and marketing with merchandising as well as procedures would end up being more difficult if the advertising and marketing division itself is disintegrated which can be an additional prospective OB problem.

Donna Karan International Inc Analysis

Various theories have actually been utilized to discuss the conditions to get additional quality concerning the circumstance at hand.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Concept X, many managers think that subordinates are passive and also careless, have little aspiration as well as stand up to change. The scenario at Donna Karan International Inc is not totally complying with Theory X, it can be seen that new hires are locating this atmosphere rather difficult which might at some point lead to a greater inclination of the management in the direction of Concept X. Also while examining Lewis's management style, theory X may have been ideal in the procedures division to some level but the Advertising division would certainly call for dependence on Theory Y in order to get the creative thinking and also creativity from the groups.

Tuckman's Team effort Theory: Regarding Lewis's worry concerning bringing harmony in between the advertising and marketing department is worried, this would at first cause conflict as gone over by Bruce Tuckman in his 'Team effort Theory'. (Tuckman, 1965). According to Tuckman's concept shown in appendix 3, during the preliminary stage of team advancement, individuals may not bond, as they are hectic locating their location in the group. By incorporating the marketing and advertising department's job, there might coincide preliminary separate which could cause the 2nd phase of 'storming' where the groups challenge each other. It is just during the 3rd stage or 'norming' when they would certainly come with each other to share suggestions prior to the group can bring about synergy in the fourth phase 'executing'.

Bridges' Change Design: According To William Bridge's theory (appendix 4), individuals are rather unpleasant with adjustment, which is evident by the situation at Donna Karan International Inc The situation can be seen as a normal program of life if is examined according to Bridge's theory where he discusses that individuals undergo 3 phases of shift when they experience change. 'Ending, losing and Releasing', The Neutral Zone and 'The New Beginning' (Bridges, 2004). When individuals exist with adjustment, they enter phase one and so there might be emotions like unhappiness, unpredictability, aggravation, temper, fear, denial as well as disorientation.The circumstance at the advertising division of Donna Karan International Inc is comparable so Lewis can obtain comfortable with the idea that it is not extraordinary habits. In the second phase, there may be a requirement to bridge the gap between the new and old society so Lewis may have to encounter this experience once Krasnow leaves. There might be low spirits as well as reduced efficiency at this phase which need to not be taken as a trouble. It is throughout this phase that Lewis will have to offer guidance to the division to make sure that they can find a sense of direction. It can be seen exactly how Krasnow has actually currently made this transition much easier by making Lewis get associated with the division a year prior to his actual departure. Based on Bridges' Version, stage three will produce visibility to understanding, High power and dedication as individuals will certainly embrace the change (Bridges, 2004).
Vrio Analysis
Abraham Maslow in his Theory of 'Requirements Hierarchy' (appendix 5) has reviews the significance of 'safety and security needs as being a reduced level demand of a human for activating inspiration. As seen in the pyramid shared in appendix 3, we can see how 'the need to feel secure as well as out of risk' is at the second level of requirements. Before a worker can be made to develop emotionally, he needs to have his 'Physical 'and also 'Safety and security' needs met.

SWOT Analysis for Donna Karan International Inc Case Study



Effects of Analysis.

The OB analysis has taken a look at numerous theories to comprehend exactly how to handle the current scenario available. The complying with three options have been suggested to aid Lewis take care of the organizational obstacles 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 needs of the marketplace and also for making the cultural modification that would adhere to once the current leader leaves.

Assimilation of advertising and marketing functions. Dividing Adverting and Manufacturing functions. Integration of Advertising with Procedures.

Evaluation of Alternatives.

Judith Shapiro who has earlier been spoken with by Lewis during the earlier merging days has know-how in business-to-business advertising and marketing along with firm and also retail advertising and marketing experience. When Krasnow leaves, Lewis can employ Shapiro as an EVP for advertising to deal with both marketing and also advertising functions.

The benefit of this strategy is that it will certainly incorporate the two functions while lowering the demand for working with an extra source for advertising. Lewis would be heading the advertising and marketing department as well as in any kind of case her substitute would certainly be required for the present duty that she is executing. The disadvantage of this option is that outside hiring might bring about bitterness from inner workers who may be looking at the position of EVP after Lewis takes control of Krasnow's placement.

Separating Adverting and also Manufacturing: Given the competitive stress and also top quality work called for from the advertising agency, it is recommended that Lewis ought to allow the manufacturing device to be a separate function from the advertising device. Given that the majority of advertising agencies had these two features as different systems, it makes more feeling to follow the norm. Both functions might be able to concentrate on their core turns on more effectively. Nonetheless, the downside of this method would be that extra prices would need to be borne for setting up different manufacturing features. Along with this, a production head may have to be hired which can raise expenses for the organization.

Assimilation of Advertising with Workflows: Considering that Lewis is currently taking care of the advertising and also procedures divisions all at once; it makes feeling to incorporate the 2 functions considering that she has actually been efficiently taking treatment of both ends. The truth that Lewis has to adapt her administration design for the marketing division suggests that these two divisions would certainly be culturally varied.

Recommendation.



An analysis of the three alternatives suggests that integration of advertising and marketing and also operations would not be a feasible relocation due to the substantial differences between the 2 departments in spite of the fact that presently Lewis is managing both. While separation of the production function may have been a desirable relocation for the advertising and marketing department, the reality that it would indicate positioning a third feature under Lewis's wing means this must be stayed clear of.

Action Plan.
Recommendation
Lewis will take control of the function of EVP Marketing after Krasnow leaves.

Advertising and Marketing functions would certainly be merged.

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

Manufacturing feature will stay part of marketing under marketing feature.

Lewis will divide herself from operations.

An autonomous leadership design with staff member empowerment will certainly be utilized in marketing department.

Open door policy and focus on cross departmental communication will be aimed at getting rid of dissonance.

Backup strategy.

If the assimilation does not work out as planned, a contingency strategy would certainly follow which would separate the manufacturing feature from the advertising function to lower the load on the SVP of advertising and marketing. In case Judith Shapiro does not get worked with, Lewis will be heading the advertising and marketing department without an SVP. Because case the production feature will certainly be separated by placing it under an SVP production.