Enron Gas Services Case Study Help


Home >> Harvard >> Enron Gas Services >>

Enron Gas Services Case Study Help

Background and Facts

Enron Gas Services a workplace products retailer for little and moderate sized businesses has just recently been involved in planning for a merging with its rival Residence Deport, which has influenced effectiveness degrees in departmentswith the senior supervisor associated with legal difficulties put forth by the federal Profession Payment. With the Advertising and marketing Head advancing the information of his separation from the business in one year, Jeannie Lewis, the existing head of procedures has been asked to take the function in the future. With difficulties in the type of a possible cultural adjustment and reduced worker morale, the company wants a full reengineering effort at the advertising and marketing department.

Problem Statement

The potential social modification at the advertising division of Enron Gas Services is enhancing uncertainty in the workplace resulting in numerous 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 major function in affecting critical choices because Stapes Inc. needed to desert its plans of merging with Office Deport after the Federal Profession Payment's intervention in the process. Provided the truth that the shop has a global presence with branches in UK, UNITED STATES, Canada and Germany, political factors in each of these countries might have the ability to influence performance or strategic goals. Federal Profession Payment's antitrust fit versus the merger occupied useful time of the company's senior management suggesting that 'political' factors can have serious implications for a global business.

Economic Factors: Economic factors such as the introduction of small businesses in the worldwide situation recommend that Enron Gas Services is flourishing in an environment where there is potential growth of businesses. In addition to this, truth that shop customers are mainly trying to find workplace materials for office recommends that the market has an increasing pattern of entrepreneurs and also home organisations.

Social factors: Social patterns in the economic climate reveal that customers are looking for benefit along with appealing costs. Marketing research shows how the consumer for Enron Gas Services lacks recognition regarding discovering options which can use a combination of comfort as well as affordable.

Technical factors: Technology plays an essential duty in Enron Gas Services's company technique especially as the company is piloting Modern technology centers which would use innovation sales and assistance in the kind of memory upgrades, outer installments. (Summary of BUG in appendix 2).

OB Issues and Manifestations.

Numerous underlying Organizational Habits issues can be seen in Enron Gas Services's case as highlighted in this section.

Uneasiness about social modification: There is apprehension concerning a cultural change that would certainly occur as soon as Todd Krasnow leaves from his placement as the Executive Vice Head Of State of Advertising with the majority of the team member currently showing unhappiness over this prospective action. This expected adjustment has produced stress and anxiety in the work environment which has actually been combined with the past anxiety of preparing the firm for a potential merger with Home Deport.

Demanding Job Environment for Newcomers: There is lack of employees that can match the stressful setting of a hectic company. Not just does this cause trouble in locating the right individuals, it places stress and anxiety on brand-new hires as can not withstand the speed and also stress that the company anticipates them to bear.

Double Reporting Lines: Beginners find this organizational culture difficult and tough to handle specifically as dotted line partnerships are suggested to be weak in general and also objective setup as well as performance analysis is still done by the strong line manager. This indicates that beginners might shed clearness regarding their respective functions and also purposes specifically as dotted line coverage does not maintain them in direct communication with the solid line supervisors.

Bitterness From Cross Departmental Hiring: Krasnow's choice to make Lewis his successor rather than Bridget Coles even though it had actually been speculated that the latter would take Krasnow's position came as a blow to her spirits. Lewis may have been capable and also ideal for the job but the fact 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 Insecurity: Concern as well as instability can be determined as two significant issues that Lewis would certainly be managing particularly as the merging has actually currently be terminated and 2 elderly executives of the advertising division would be leaving. The whole responsibility of the department would be falling on Lewis's shoulders who would certainly not simply be in charge of brining regarding a social modification however would certainly likewise need to verify herself in her brand-new duty.

Incompatible Administration Design of Leader: Lewis's management design as well as its incompatibility with the marketing department's duty can also be seen as an OB difficulty specifically as she has actually been utilized to taking care of problems in the procedures department where employees are taught to concentrate on procedures and obtain them. The marketing division on the other hand can be seen as a team of individuals that are used to being supported by Krasnow that concentrated extra on outcome than processes.

Interdepartmental Arguments: Interdepartmental arguments between three divisions, marketing, merchandizing and operations respectively over the allotment of the advertising mix can be determined as one more OB problem. The marketing department does not share the exact same vision as the other two departments regarding the aloocation of the advertising and marketing mix twoards promotions as well as advertsing, the merchandizing as well as operations divisions do not concur over the advertising and marketing mix allowance amongst one another either.

Disintegration in Advertising And Marketing Department: Fragmentation in between the marketing and advertising divisions can be identified as another OB concern which might need additional focus. The fact that the marketing and advertising areas in the advertising department are separated is protecting against both divisions from acquiring from each other's experience and also proficiency. Integration of advertising and marketing with merchandising and procedures would certainly come to be harder if the marketing department itself is disintegrated which can be another possible OB problem.

Enron Gas Services Analysis

Various theories have actually been utilized to describe the circumstances to obtain more quality regarding the circumstance at hand.

McGregor's Concept X & Y: According to Douglas McGregor's Concept X, many supervisors think that subordinates are easy and careless, have little passion and stand up to adjustment. The situation at Enron Gas Services is not completely following Concept X, it can be seen that brand-new hires are locating this setting rather stressful which might at some point lead to a higher disposition of the administration in the direction of Theory X. Even while assessing Lewis's administration style, theory X might have been ideal in the operations division to some extent yet the Marketing division would certainly call for reliance on Concept Y in order to obtain the creative thinking and also originality from the groups.

Tuckman's Synergy Concept: As much as Lewis's worry about bringing consistency between the advertising and marketing and marketing division is concerned, this would originally lead to contrast as reviewed by Bruce Tuckman in his 'Synergy Concept'. By combining the advertising and also marketing division's work, there may be the same initial separate which can lead to the 2nd phase of 'storming' where the teams challenge one an additional.

When people are presented with modification, they enter stage one as well as so there may be emotions like despair, uncertainty, disappointment, anger, anxiety, denial and also disorientation.The scenario at the marketing division of Enron Gas Services is comparable so Lewis can get comfortable with the idea that it is not amazing habits. It is during this stage that Lewis will certainly have to provide advice 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 simpler by making Lewis obtain included in the division a year before his actual departure.

Abraham Maslow in his Concept of 'Demands Hierarchy' (appendix 5) has reviews the importance of 'safety requires as being a reduced degree requirement of a human for triggering inspiration. As seen in the pyramid shared in appendix 3, we can see how 'the demand to really feel protected and out of danger' is at the 2nd level of demands. Prior to a worker can be made to establish emotionally, he requires to have his 'Physical 'as well as 'Safety and security' requires fulfilled.

SWOT Analysis for Enron Gas Services Case Study

Ramification of Analysis.

The OB analysis has actually looked at different concepts to understand exactly how to handle the existing circumstance handy. The complying with 3 options have been suggested to help Lewis deal with the organizational obstacles in the advertising and marketing department. Each of these options has been suggested for easing the transition needed to bring the advertising department in accordance with the requirements of the marketplace and also for making the social change that would follow when the existing leader leaves.

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

Analysis of Alternatives.

Judith Shapiro who has earlier been spoken with by Lewis throughout the earlier merging days has knowledge in business-to-business advertising and marketing along with firm as well as retail marketing experience. When Krasnow leaves, Lewis can work with Shapiro as an EVP for marketing to handle both advertising as well as marketing functions.

The benefit of this method is that it will certainly incorporate both functions while minimizing the demand for working with an additional source for marketing. Lewis would certainly be heading the advertising department and in any case her replacement would certainly be required for the current function that she is doing. The drawback of this choice is that exterior hiring might produce animosity from inner personnel that might be considering the placement of EVP after Lewis takes control of Krasnow's setting.

Dividing Adverting and Production: Provided the affordable pressures as well as premium quality work needed from the advertising agency, it is recommended that Lewis must enable the production system to be a different function from the advertising unit. Because a lot of ad agency had these 2 functions as separate units, it makes even more sense to follow the standard. Both features may be able to concentrate on their core triggers extra successfully. The downside of this approach would certainly be that additional expenses would have to be birthed for setting up separate manufacturing features. Along with this, a production head might have to be hired which might enhance expenses for the company.

Integration of Advertising And Marketing with Procedures: Since Lewis is currently taking care of the advertising as well as procedures departments concurrently; it makes feeling to integrate the 2 features since she has actually been successfully taking treatment of both ends. The truth that Lewis has to adjust her management design for the advertising department suggests that these two divisions would certainly be culturally diverse.


An examination of the three choices shows that assimilation of advertising and marketing and also operations would not be a practical step due to the huge differences in between the 2 divisions despite the truth that presently Lewis is dealing with both. While splitting up of the manufacturing function may have been a desirable step for the advertising department, the reality that it would certainly imply placing a third function under Lewis's wing indicates this should be stayed clear of.

Action Strategy.

Lewis will take over the duty of EVP Advertising and marketing after Krasnow leaves.

Marketing and advertising functions would be merged.

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

Production feature will certainly remain component of marketing under advertising and marketing feature.

Lewis will separate herself from operations.

An autonomous leadership design with staff member empowerment will certainly be used in advertising and marketing department.

Open up door plan as well as focus on cross department interaction will certainly be focused on getting rid of disharmony.

Contingency plan.

If the assimilation does not exercise as planned, a contingency plan would comply with which would certainly separate the manufacturing feature from the advertising and marketing function to decrease the tons on the SVP of advertising and marketing. In case Judith Shapiro does not obtain hired, Lewis will be heading the advertising and marketing division without an SVP. Because case the manufacturing function will definitely be separated by positioning it under an SVP manufacturing.