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Enron Collapse Case Study Help

Background and Facts

Enron Collapse an office supplies seller for little as well as medium sized businesses has just recently been associated with preparing for a merger with its competitor Home Deport, which has influenced efficiency levels in departmentswith the senior supervisor associated with lawful complications presented by the federal Trade Commission. With the Advertising Head putting forward the information of his departure from the firm in one year, Jeannie Lewis, the existing head of procedures has been asked to take the role in the future. With difficulties in the kind of a prospective cultural modification and low worker spirits, the company is in need of a complete reengineering initiative at the marketing department.

Problem Declaration
Porter's 5 Forces Analysis
The potential social change at the advertising and marketing department of Enron Collapse is raising uncertainty in the working environment bring about various 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 affecting tactical choices given that Stapes Inc. needed to desert its plans of merging with Workplace Deport after the Federal Profession Compensation's treatment while doing so. Given the reality that the store has an international presence with branches in UK, U.S.A., Canada as well as Germany, political consider each of these countries may be able to influence performance or strategic objectives. Federal Trade Commission's antitrust fit against the merger took up valuable time of the company's elderly management recommending that 'political' factors can have significant implications for a worldwide company.

Economic Factors: Financial factors such as the emergence of small companies in the global scenario suggest that Enron Collapse is flourishing in a setting where there is potential growth of companies. In addition to this, reality that store consumers are mainly looking for workplace materials for office recommends that the marketplace has a climbing pattern of business owners and online companies.

Social factors: Social patterns in the economy show that customers are looking for comfort as well as appealing costs. Marketing research demonstrates how the customer for Enron Collapse does not have awareness concerning finding options which can use a combination of convenience as well as inexpensive.

Technical factors: Innovation plays an essential duty in Enron Collapse's organisation method specifically as the organization is piloting Modern technology centers which would use technology sales and support in the type of memory upgrades, peripheral setups. (Recap of BUG in appendix 2).

OB Issues and also Effects.

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

Uneasiness about cultural modification: There is concern about a social change that would certainly take place once Todd Krasnow leaves from his setting as the Exec Vice Head Of State of Advertising And Marketing with most of the employee already showing unhappiness over this possible action. This predicted modification has actually created anxiety in the work environment which has actually been combined with the previous stress of preparing the firm for a potential merger with House Deport.
Pest Analysis
Stressful Task Atmosphere for Newcomers: There is shortage of employees that can match the difficult setting of a fast-paced company. Not only does this lead to trouble in locating the appropriate people, it places stress on brand-new hires as can not hold up against the rate and stress that the company anticipates them to birth.

Dual Coverage Lines: Novices discover this organizational culture difficult as well as difficult to manage particularly as populated line connections are meant to be weak generally as well as objective setting as well as efficiency assessment is still done by the solid line manager. This suggests that newbies could lose clearness concerning their particular roles as well as objectives especially as dotted line reporting does not maintain them in direct interaction with the strong line managers.

Bitterness From Cross Departmental Hiring: Krasnow's decision to make Lewis his follower instead of Bridget Coles although it had been hypothesized that the latter would take Krasnow's setting came as a blow to her morale. Lewis may have been capable and also appropriate for the work but the fact that Kransnow's departure would make Coles a straight record to Lewis might have been the reason for Coles' resignation from solutions.

Concern & Task Instability: Concern and also instability can be determined as 2 significant issues that Lewis would certainly be taking care of especially as the merging has now be terminated as well as two senior executives of the advertising and marketing division would be leaving. The whole responsibility of the department would certainly be falling on Lewis's shoulders that would certainly not just be in charge of brining about a cultural modification but would also need to verify herself in her new role.

Incompatible Administration Design of Leader: Lewis's administration design and also its conflict with the marketing department's role can likewise be viewed as an OB challenge specifically as she has actually been utilized to managing issues in the procedures division where workers are shown to concentrate on procedures as well as obtain them right. The advertising department on the other hand can be seen as a group of individuals who are made use of to being supported by Krasnow that focused much more on outcome than processes.

Interdepartmental Arguments: Interdepartmental differences in between 3 departments, advertising, merchandizing as well as procedures specifically over the appropriation of the advertising and marketing mix can be identified as one more OB problem. Although the advertising and marketing department does not share the same vision as the various other 2 departments concerning the aloocation of the advertising and marketing mix twoards promos and also advertsing, the merchandizing and procedures divisions do not agree over the advertising and marketing mix allocation among one another either.

Fragmentation in Advertising And Marketing Division: Fragmentation in between the advertising and marketing divisions can be recognized as an additional OB concern which might require further focus. The truth that the marketing and advertising sections in the advertising department are disconnected is protecting against both departments from obtaining from each various other's experience as well as proficiency. Assimilation of advertising with retailing and also procedures would certainly come to be harder if the advertising and marketing division itself is disintegrated which can be another possible OB concern.

Enron Collapse Analysis

Various concepts have actually been utilized to describe the situations to get additional quality about the circumstance available.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Theory X, many supervisors think that staffs are easy and careless, have little aspiration as well as withstand adjustment. The situation at Enron Collapse is not entirely following Concept X, it can be seen that new hires are discovering this setting rather demanding which might ultimately lead to a better disposition of the management in the direction of Theory X. Even while assessing Lewis's administration design, theory X might have been ideal in the procedures department to some degree but the Advertising and marketing division would certainly call for reliance on Concept Y in order to get the creativity and also originality from the teams.

Tuckman's Synergy Theory: As far as Lewis's concern concerning bringing consistency in between the advertising and marketing and advertising and marketing department is worried, this would initially lead to contrast as gone over by Bruce Tuckman in his 'Team effort Theory'. By incorporating the advertising as well as advertising department's job, there may be the same first separate which could lead to the second stage of 'storming' where the groups test one an additional.

Bridges' Change Design: As per William Bridge's theory (appendix 4), individuals are rather uncomfortable with change, which is evident by the situation at Enron Collapse The scenario can be seen as a normal course of life if is researched based on Bridge's theory where he discusses that individuals experience 3 stages of transition when they experience adjustment. 'Ending, shedding as well as Releasing', The Neutral Area and 'The New Starting' (Bridges, 2004). When individuals exist with modification, they enter stage one and so there may be feelings like despair, unpredictability, disappointment, anger, worry, rejection and disorientation.The scenario at the advertising division of Enron Collapse is similar so Lewis can get comfortable with the suggestion that it is not amazing behavior. In the 2nd stage, there might be a requirement to link the void between the new and also old society so Lewis might have to encounter this experience as soon as Krasnow leaves. There may be reduced spirits and also low performance at this phase which ought to not be taken as a problem. It is during this stage that Lewis will need to offer support to the division so that they can discover an orientation. It can be seen exactly how Krasnow has currently made this change easier by making Lewis obtain associated with the department a year prior to his real separation. According to Bridges' Design, stage 3 will certainly produce visibility to learning, High power as well as commitment as individuals will accept the adjustment (Bridges, 2004).
Vrio Analysis
Maslow's Need hierarchy: The OB issue pertaining to instability at the work environment has been triggered to start with by the modification in monitoring and secondly by the truth that the merging will certainly no more be initiated. Abraham Maslow in his Theory of 'Needs Pecking order' (appendix 5) has reviews the significance of 'security needs as being a lower level requirement of a human for causing inspiration. As seen in the pyramid shared in appendix 3, we can see exactly how 'the requirement to really feel safe and secure and untouched' goes to the second degree of demands. Prior to an employee can be made to create psychologically, he requires to have his 'Physical 'and also 'Safety and security' requires fulfilled. This suggests that unless the employees are made to feel safe concerning their current employment condition in Enron Collapse they may not reach 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Enron Collapse Case Study

Implication of Analysis.

The OB analysis has looked at different concepts to understand just how to handle the present circumstance available. The complying with three alternatives have been proposed to assist Lewis deal with the organizational challenges in the advertising and marketing department. Each of these alternatives has actually been proposed for easing the shift required to bring the advertising department in line with the needs of the market and also for making the social change that would certainly adhere to as soon as the existing leader leaves.

Combination of marketing and advertising features. Separating Adverting as well as Production features. Assimilation of Advertising And Marketing with Procedures.

Assessment of Alternatives.

Judith Shapiro who has actually earlier been talked to by Lewis during the earlier merger days has knowledge in business-to-business advertising along with company and retail advertising and marketing experience. Once Krasnow leaves, Lewis can employ Shapiro as an EVP for advertising and marketing to deal with both marketing and advertising and marketing functions.

The advantage of this technique is that it will integrate both features while reducing the requirement for employing an extra resource for advertising and marketing. Lewis would certainly be heading the advertising division and in any case her replacement would be required for the current duty that she is performing. The disadvantage of this alternative is that outside hiring might cause bitterness from inner employees that may be considering the placement of EVP after Lewis takes over Krasnow's position.

Dividing Adverting and also Manufacturing: Given the competitive pressures as well as premium quality work required from the ad agency, it is advised that Lewis must enable the manufacturing device to be a separate function from the advertising and marketing system. Because most ad agency had these two functions as separate systems, it makes more feeling to adhere to the standard. In addition to this, both features may have the ability to concentrate on their core turns on a lot more successfully. The downside of this strategy would certainly be that added expenses would have to be birthed for establishing up separate production features. Along with this, a production head may have to be worked with which might increase overheads for the company.

Integration of Marketing with Procedures: Because Lewis is already caring for the advertising and also procedures departments simultaneously; it makes good sense to integrate both features because she has been successfully caring for both ends. The truth that the two divisions currently have significant differences over allocation of sources recommends that this assimilation might have the ability to cause consistency especially as Lewis would be heading both ends.However there are different disadvantages of this move especially as it would certainly place excessive concern over Lewis's shoulders. The truth that Lewis needs to adapt her monitoring style for the advertising division suggests that these two divisions would be culturally diverse. In addition to this, Lewis might not be able to apply one kind of management style to both divisions which might result in inefficiency in either among the two functions.


An examination of the three options suggests that integration of marketing as well as procedures would certainly not be a feasible relocation because of the large differences in between both divisions despite the fact that currently Lewis is dealing with both. While splitting up of the manufacturing feature may have been a positive relocation for the advertising and marketing division, the fact that it would imply placing a 3rd feature under Lewis's wing indicates this should be avoided. The integration of the advertising division is the very best choice in regards to obtaining the optimal results from the division. An activity plan for this choice is reviewed below.

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

Marketing and advertising functions would certainly be merged.

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

Production function will certainly stay component of marketing under marketing feature.

Lewis will certainly divide herself from procedures.

A democratic management design with employee empowerment will certainly be made use of in advertising and marketing division.

Open door plan as well as emphasis on cross departmental communication will certainly be targeted at eliminating discord.

Backup plan.

If the assimilation does not work out as planned, a backup plan would certainly adhere to which would certainly divide the manufacturing function from the marketing feature to lower the lots on the SVP of advertising and marketing. In case Judith Shapiro does not obtain worked with, Lewis will certainly be heading the advertising division without an SVP. Because case the manufacturing feature will certainly be separated by putting it under an SVP production.