Menu

Enron Collapse Case Study Solution

CASE HELP

Home >> Harvard >> Enron Collapse >>

Enron Collapse Case Study Analysis

Background and Facts

Enron Collapse an office products seller for little as well as medium sized businesses has actually recently been associated with planning for a merging with its competitor House Deport, which has affected performance levels in departmentswith the elderly supervisor involved in legal difficulties put forth by the federal Profession Payment. With the Marketing Head putting forward the news of his departure from the company in one year, Jeannie Lewis, the current head of procedures has been asked to take the function in the future. With obstacles in the type of a prospective cultural modification as well as reduced staff member spirits, the company wants a total reengineering effort at the advertising and marketing division.

Issue Statement
Porter's 5 Forces Analysis
The prospective social change at the advertising and marketing division of Enron Collapse is boosting unpredictability in the workplace leading to numerous difficulties for the Jeannie Lewis that would certainly be changing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant function in impacting critical decisions because Stapes Inc. needed to abandon its strategies of combining with Workplace Deport after the Federal Trade Payment's treatment at the same time. Provided the fact that the shop has a worldwide visibility with branches in UK, U.S.A., Canada and Germany, political factors in each of these countries may have the ability to affect efficiency or critical objectives. Federal Trade Compensation's antitrust fit against the merger used up important time of the company's elderly administration suggesting that 'political' factors can have serious effects for a global organisation.

Economic Factors: Financial factors such as the appearance of small businesses in the international circumstance recommend that Enron Collapse is growing in an environment where there is prospective growth of businesses. Along with this, reality that store consumers are primarily searching for office materials for office suggests that the marketplace has an increasing trend of business owners and also home based businesses.

Social factors: Social trends in the economic climate reveal that clients are trying to find comfort in addition to attractive prices. Market research demonstrates how the consumer for Enron Collapse lacks awareness concerning finding options which can provide a mix of convenience and low costs.

Technological factors: Technology plays an essential function in Enron Collapse's business method especially as the organization is piloting Technology centers which would certainly supply innovation sales and support in the kind of memory upgrades, peripheral installations. (Recap of PARASITE in appendix 2).

OB Issues as well as Effects.

A number of underlying Business Habits concerns can be seen in Enron Collapse's case as highlighted in this section.

Worries regarding social adjustment: There is concern about a cultural modification that would happen once Todd Krasnow leaves from his position as the Executive Vice President of Advertising And Marketing with most of the personnel already revealing unhappiness over this prospective relocation. This expected change has created anxiety in the work environment which has actually been coupled with the previous anxiety of preparing the firm for a potential merging with Home Deport.
Pest Analysis
Stressful Work Environment for Newcomers: There is shortage of employees that can match the difficult setting of a hectic company. Not just does this result in trouble in discovering the best people, it places stress and anxiety on brand-new hires as can not endure the rate and stress that the organization anticipates them to birth.

Dual Reporting Lines: Newbies find this business culture troublesome as well as hard to handle especially as populated line connections are indicated to be weaker as a whole and also objective setup and efficiency evaluation is still done by the solid line supervisor. This means that newbies could lose clearness about their respective roles and also goals especially as populated line reporting does not keep them in straight communication with the strong line supervisors.

Animosity From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower instead of Bridget Coles despite the fact that it had actually been guessed that the latter would certainly take Krasnow's placement came as a strike to her morale. Lewis may have been qualified and proper for the task yet the fact that Kransnow's departure would make Coles a direct report to Lewis may have been the reason for Coles' resignation from services.

Worry & Work Instability: Worry as well as insecurity can be recognized as 2 major worries that Lewis would certainly be dealing with particularly as the merger has actually now be terminated and also two senior executives of the advertising and marketing division would certainly be leaving. The whole obligation of the division would certainly be dropping on Lewis's shoulders who would not just be in charge of brining about a cultural modification however would certainly additionally have to confirm herself in her brand-new role.

Incompatible Monitoring Design of Leader: Lewis's administration design and its conflict with the advertising and marketing department's function can likewise be seen as an OB obstacle specifically as she has actually been utilized to dealing with problems in the operations department where personnel are instructed to concentrate on processes and obtain them. The advertising division on the other hand can be viewed as a team of individuals that are utilized to being nurtured by Krasnow that focused extra on result than processes.

Interdepartmental Arguments: Interdepartmental disagreements between 3 departments, advertising and marketing, merchandizing and operations respectively over the allocation of the marketing mix can be recognized as one more OB concern. Although the advertising and marketing division does not share the very same vision as the various other two departments concerning the aloocation of the advertising and marketing mix twoards promos as well as advertsing, the merchandizing and operations divisions do not agree over the advertising mix allocation among one another either.

Disintegration in Advertising And Marketing Division: Fragmentation in between the marketing and advertising departments can be recognized as one more OB concern which can need more attention. The reality that the marketing and advertising areas in the advertising division are disconnected is stopping both departments from getting from each other's experience and also experience. Assimilation of marketing with retailing and also procedures would end up being harder if the marketing department itself is disintegrated which can be an additional possible OB worry.

Enron Collapse Analysis

Different theories have actually been made use of to describe the circumstances to get more clarity regarding the circumstance available.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Theory X, a lot of supervisors think that subordinates are passive and also lazy, have little aspiration and stand up to change. The circumstance at Enron Collapse is not totally complying with Theory X, it can be seen that brand-new hires are locating this environment rather difficult which may eventually lead to a better inclination of the management in the direction of Theory X. Also while analyzing Lewis's administration design, theory X may have been suitable in the operations department to some extent yet the Advertising department would require reliance on Theory Y in order to obtain the imagination and creativity from the teams.

Tuckman's Synergy Theory: As far as Lewis's concern about bringing consistency in between the marketing and advertising department is concerned, this would originally lead to contrast as reviewed by Bruce Tuckman in his 'Teamwork Concept'. (Tuckman, 1965). As per Tuckman's concept shown in appendix 3, during the first phase of team growth, people may not bond, as they are hectic locating their place in the team. By incorporating the marketing and advertising department's job, there may be the same first disconnect which could result in the second stage of 'storming' where the teams challenge one another. Nevertheless, it is only during the third phase or 'norming' when they would certainly collaborate to share concepts before the team can cause synergy in the 4th phase 'performing'.

Bridges' Transition Model: According To William Bridge's theory (appendix 4), individuals are rather awkward with change, which is evident by the circumstance at Enron Collapse The situation can be viewed as a normal course of life if is researched as per Bridge's theory where he discusses that people experience 3 phases of shift when they experience modification. 'Ending, shedding and also Releasing', The Neutral Zone as well as 'The New Beginning' (Bridges, 2004). When people exist with adjustment, they get in phase one therefore there might be emotions like unhappiness, unpredictability, frustration, temper, fear, denial and disorientation.The circumstance at the advertising division of Enron Collapse is similar so Lewis can get comfortable with the suggestion that it is not remarkable behavior. In the second stage, there might be a demand to connect the space in between the brand-new and also old society so Lewis might have to encounter this challenge once Krasnow leaves. There may be reduced spirits as well as reduced efficiency at this phase which need to not be taken as an obstacle. It is during this stage that Lewis will need to provide advice to the division to ensure that they can discover a sense of direction. It can be seen how Krasnow has currently made this shift less complicated by making Lewis obtain associated with the department a year before his real departure. According to Bridges' Version, phase 3 will certainly produce openness to knowing, High energy as well as commitment as individuals will accept the adjustment (Bridges, 2004).
Vrio Analysis
Maslow's Need hierarchy: The OB issue pertaining to insecurity at the work environment has actually been activated firstly by the adjustment in management and second of all by the truth that the merging will certainly no more be launched. Abraham Maslow in his Theory of 'Requirements Power structure' (appendix 5) has goes over the value of 'security needs as being a reduced level requirement of a human for activating inspiration. As seen in the pyramid cooperated appendix 3, we can see exactly how 'the need to feel safe and untouched' goes to the second degree of requirements. Prior to a worker can be made to create psychologically, he needs to have his 'Physical 'and also 'Security' requires satisfied. This shows that unless the personnel are made to really feel protected about their present employment status in Enron Collapse they may not reach 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Enron Collapse Case Study



Ramification of Analysis.

The OB analysis has looked at different concepts to comprehend just how to manage the existing circumstance handy. The complying with three alternatives have actually been suggested to aid Lewis manage the business difficulties in the advertising and marketing division. Each of these alternatives has been suggested for reducing the transition required to bring the advertising department according to the demands of the market as well as for making the cultural modification that would comply with once the existing leader leaves.

Integration of marketing and advertising functions. Separating Adverting and Manufacturing functions. Assimilation of Advertising And Marketing with Workflow.

Assessment of Alternatives.

Integration of Advertising And Marketing & Advertising Functions: The in-house marketing agency of Enron Collapse is currently stamina for the organization in regards to saving up on overheads related to advertising and promotion. Given that no new employment has actually been done after Bridget Cole's separation with the coverage line being straight assigned to Krasnow for the advertising and marketing feature, this is a favorable opportunity for integrating the advertising and marketing features. Judith Shapiro that has earlier been spoken with by Lewis during the earlier merging days has know-how in business-to-business marketing along with firm and also retail advertising experience. As soon as Krasnow leaves, Lewis can employ Shapiro as an EVP for advertising and marketing to handle both advertising and marketing features.

The benefit of this approach is that it will incorporate the two features while decreasing the requirement for hiring an extra source for marketing. Lewis would be heading the advertising division and also in any kind of case her substitute would be required for the existing duty that she is performing. The disadvantage of this alternative is that exterior hiring may cause resentment from internal workers who might be looking at the setting of EVP after Lewis takes control of Krasnow's placement.

Dividing Adverting and Manufacturing: Provided the competitive pressures and high quality job called for from the marketing firm, it is advised that Lewis needs to enable the manufacturing unit to be a separate feature from the advertising and marketing system. Given that many advertising firms had these 2 features as different systems, it makes even more sense to adhere to the standard.

Assimilation of Marketing with Procedures: Since Lewis is already taking care of the advertising as well as procedures divisions simultaneously; it makes good sense to incorporate the two functions since she has been effectively dealing with both ends. The reality that both departments currently have major differences over allocation of resources recommends that this integration may have the ability to bring about harmony especially as Lewis would be heading both ends.However there are different downsides of this move specifically as it would place excessive concern over Lewis's shoulders. The fact that Lewis needs to adjust her monitoring style for the advertising and marketing department recommends that these 2 divisions would certainly be culturally varied. In addition to this, Lewis may not have the ability to use one sort of management design to both departments which can lead to inefficiency in either among the two features.

Suggestion.



An analysis of the 3 choices indicates that combination of advertising as well as operations would not be a possible action due to the substantial differences between the 2 divisions in spite of the reality that presently Lewis is handling both. While separation of the manufacturing function may have been a desirable step for the advertising and marketing division, the fact that it would certainly suggest putting a third feature under Lewis's wing suggests this ought to be stayed clear of.

Action Strategy.
Recommendation
Lewis will take control of the role of EVP Advertising after Krasnow leaves.

Advertising and Marketing features would certainly be combined.

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

Manufacturing feature will stay component of advertising under marketing feature.

Lewis will certainly separate herself from operations.

A democratic leadership design with staff member empowerment will be used in advertising and marketing department.

Open up door policy and also emphasis on cross departmental communication will certainly be focused on getting rid of disharmony.

Contingency plan.

If the assimilation does not exercise as intended, a contingency strategy would follow which would divide the manufacturing feature from the advertising function to decrease the lots on the SVP of marketing and advertising. In case Judith Shapiro does not obtain hired, Lewis will certainly be heading the advertising department without an SVP. Because case the production feature will certainly be separated by positioning it under an SVP production.