Enron Gas Services Case Study Solution


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Enron Gas Services Case Study Solution

Background and Facts

Enron Gas Services an office materials merchant for little as well as medium sized services has actually just recently been associated with planning for a merging with its rival Residence Deport, which has influenced efficiency levels in departmentswith the senior manager involved in legal complications put forth by the government Trade Compensation. With the Advertising and marketing Head putting forward the news of his separation from the firm in one year, Jeannie Lewis, the present head of operations has been asked to take the duty in the future. With challenges in the type of a possible social adjustment and also low staff member morale, the organization wants a full reengineering effort at the advertising department.

Trouble Declaration
Porter's 5 Forces Analysis
The possible cultural adjustment at the advertising division of Enron Gas Services is increasing unpredictability in the workplace causing numerous challenges for the Jeannie Lewis that would certainly be replacing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant function in impacting critical choices because Stapes Inc. needed to desert its plans of combining with Workplace Deport after the Federal Profession Compensation's treatment while doing so. Provided the reality that the shop has an international visibility with branches in UK, UNITED STATES, Canada as well as Germany, political consider each of these countries may have the ability to impact efficiency or strategic objectives. Federal Profession Commission's antitrust match against the merging occupied beneficial time of the company's senior monitoring recommending that 'political' factors can have serious ramifications for a global business.

Economic Factors: Financial factors such as the emergence of small companies in the worldwide circumstance suggest that Enron Gas Services is growing in an environment where there is prospective growth of services. Along with this, truth that store clients are primarily trying to find office products for home offices suggests that the marketplace has a climbing pattern of business owners and also online organisations.

Social factors: Social patterns in the economic situation reveal that customers are seeking convenience along with appealing rates. Marketing research demonstrates how the client for Enron Gas Services does not have understanding regarding discovering options which can offer a combination of benefit as well as low costs.

Technical factors: Modern technology plays an important function in Enron Gas Services's company strategy particularly as the organization is piloting Modern technology facilities which would certainly offer modern technology sales and support in the kind of memory upgrades, outer setups. (Summary of PEST in appendix 2).

OB Issues and also Symptoms.

Several underlying Business Habits problems can be seen in Enron Gas Services's case as highlighted in this area.

Worries about cultural change: There is concern concerning a social change that would happen when Todd Krasnow leaves from his placement as the Exec Vice President of Advertising And Marketing with the majority of the team member already showing discontent over this prospective action. This predicted modification has actually developed stress and anxiety in the work environment which has actually been combined with the past anxiety of preparing the company for a prospective merger with Home Deport.
Pest Analysis
Difficult Work Environment for Newcomers: There is lack of employees that can match the difficult atmosphere of a fast-paced company. Not only does this bring about problem in finding the ideal individuals, it places anxiety on new hires as can not withstand the rate and also stress that the organization anticipates them to bear.

Twin Reporting Lines: Novices discover this organizational society troublesome as well as hard to cope with especially as dotted line relationships are meant to be weak in general and objective setting and efficiency examination is still done by the solid line manager. This implies that novices can shed quality about their particular roles and also objectives specifically as populated line reporting does not keep them in direct interaction with the strong line managers.

Animosity From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower rather than Bridget Coles although it had been guessed that the last would take Krasnow's position came as an impact to her spirits. Lewis might have been qualified and also ideal for the work but the reality that Kransnow's separation would certainly make Coles a straight record to Lewis may have been the reason for Coles' resignation from services.

Fear & Job Instability: Concern and instability can be recognized as two major issues that Lewis would certainly be handling specifically as the merger has now be terminated and also two senior executives of the marketing division would be leaving. The entire obligation of the department would be falling on Lewis's shoulders that would not simply be in charge of brining concerning a cultural modification but would certainly likewise have to verify herself in her brand-new function.

Incompatible Monitoring Style of Leader: Lewis's administration style as well as its conflict with the advertising department's role can additionally be seen as an OB difficulty specifically as she has been made use of to taking care of issues in the procedures division where employees are taught to concentrate on processes and also obtain them right. The advertising division on the other hand can be seen as a team of individuals who are utilized to being nurtured by Krasnow who concentrated extra on result than procedures.

Interdepartmental Disagreements: Interdepartmental disputes between three divisions, advertising and marketing, merchandizing as well as operations specifically over the allowance of the marketing mix can be identified as another OB issue. The advertising division does not share the very same vision as the various other 2 divisions pertaining to the aloocation of the marketing mix twoards promos and advertsing, the merchandizing as well as procedures divisions do not concur over the marketing mix allotment amongst one an additional either.

Fragmentation in Marketing Department: Disintegration in between the marketing and advertising departments can be identified as one more OB problem which might need additional focus. The fact that the marketing and advertising sections in the advertising department are disconnected is stopping both divisions from getting from each various other's experience and also knowledge. Combination of marketing with retailing and procedures would certainly end up being more difficult if the advertising division itself is disintegrated which can be another prospective OB issue.

Enron Gas Services Analysis

Different theories have actually been made use of to discuss the circumstances to get further clarity concerning the situation available.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Theory X, most supervisors believe that staffs are passive and also careless, have little ambition and also withstand change. The tough variation of this concept emphasized coercion, tight controls, risks and penalties. Over time it produces reduced productivity, refined sabotage and competition (Offer, 2003). The circumstance at Enron Gas Services is not totally complying with Concept X, it can be seen that new hires are discovering this environment rather difficult which may at some point lead to a greater inclination of the administration in the direction of Concept X. According to McGregor's promoted sight, which he called Concept Y, the vital task of the administration is to arrange business problems to ensure that individuals can attain their very own goals best by routing their efforts in the direction of business rewards. If people locate no fulfillment in their job, the management would certainly have little selection yet to rely on theory X and exterior control (Deal, 2003). Also while evaluating Lewis's management design, theory X may have been suitable in the procedures department to some extent but the Advertising department would certainly require dependence on Theory Y so as to get the creative thinking and also creativity from the groups.

Tuckman's Synergy Concept: As for Lewis's problem about bringing consistency between the marketing and advertising department is concerned, this would at first cause clash as reviewed by Bruce Tuckman in his 'Synergy Theory'. (Tuckman, 1965). According to Tuckman's concept shown in appendix 3, throughout the initial phase of group development, individuals may not bond, as they are active discovering their area in the team. By integrating the advertising and marketing division's work, there may coincide preliminary disconnect which might result in the 2nd stage of 'storming' where the teams test each other. It is just during the 3rd stage or 'norming' when they would certainly come with each other to share suggestions before the group can bring about synergy in the 4th phase 'performing'.

Bridges' Change Design: Based On William Bridge's concept (appendix 4), people are fairly awkward with change, which is evident by the circumstance at Enron Gas Services The scenario can be viewed as a regular course of life if is studied based on Bridge's theory where he describes that people undergo three stages of change when they experience change. 'Closing, losing and Letting go', The Neutral Area as well as 'The New Starting' (Bridges, 2004). When individuals are presented with modification, they go into phase one therefore there may be emotions like unhappiness, uncertainty, frustration, temper, worry, rejection and also disorientation.The circumstance at the advertising and marketing division of Enron Gas Services is similar so Lewis can obtain comfortable with the concept that it is not remarkable habits. In the 2nd phase, there might be a need to link the void in between the brand-new and old society so Lewis may have to face this experience as soon as Krasnow leaves. There may be reduced morale as well as reduced productivity at this stage which need to not be taken as a problem. It is during this stage that Lewis will certainly need to offer guidance to the department to make sure that they can locate a sense of direction. It can be seen how Krasnow has actually currently made this shift much easier by making Lewis obtain involved in the division a year prior to his actual departure. As per Bridges' Design, stage three will certainly cause openness to learning, High power and also dedication as people will welcome the change (Bridges, 2004).
Vrio Analysis
Abraham Maslow in his Concept of 'Requirements Pecking order' (appendix 5) has discusses the importance of 'security needs as being a reduced degree requirement of a human for triggering inspiration. As seen in the pyramid shared in appendix 3, we can see just how 'the need to feel safe and also out of threat' is at the second level of demands. Before a staff member can be made to create psychologically, he needs to have his 'Physical 'and 'Safety' requires met.

SWOT Analysis for Enron Gas Services Case Study

Effects of Analysis.

The OB analysis has looked at different concepts to recognize just how to cope with the existing situation handy. The adhering to three choices have actually been recommended to assist Lewis deal with the business challenges in the marketing department. Each of these choices has been recommended for alleviating the shift needed to bring the advertising division in accordance with the demands of the market and for making the social change that would certainly comply with as soon as the existing leader leaves.

Combination of advertising and marketing functions. Separating Adverting and also Manufacturing features. Combination of Advertising with Operations.

Evaluation of Alternatives.

Assimilation of Advertising And Marketing & Marketing Functions: The internal advertising and marketing company of Enron Gas Services is already strength for the company in terms of conserving up on overheads associated with advertising and promotion. Since no new recruitment has been done after Bridget Cole's separation with the reporting line being directly designated to Krasnow for the marketing feature, this is a favorable chance for integrating the marketing and advertising functions. Judith Shapiro who has earlier been spoken with by Lewis throughout the earlier merger days has experience in business-to-business advertising in addition to firm and also retail advertising and marketing experience. When Krasnow leaves, Lewis can hire Shapiro as an EVP for marketing to deal with both advertising and marketing features.

The advantage of this approach is that it will certainly incorporate both functions while reducing the need for hiring an added resource for marketing. Lewis would be heading the advertising and marketing department and in any case her substitute would certainly be needed for the existing function that she is executing. The drawback of this alternative is that exterior hiring may produce bitterness from inner workers who might be considering the position of EVP after Lewis takes control of Krasnow's position.

Dividing Adverting and Production: Provided the affordable stress and also high top quality work needed from the advertising and marketing company, it is recommended that Lewis ought to enable the manufacturing unit to be a different function from the marketing unit. Given that a lot of advertising and marketing companies had these two functions as separate devices, it makes even more feeling to adhere to the standard.

Integration of Advertising And Marketing with Operations: Considering that Lewis is already dealing with the marketing and procedures departments at the same time; it makes sense to incorporate both functions given that she has been effectively looking after both ends. The fact that both divisions already have significant distinctions over allotment of sources suggests that this combination may have the ability to bring about consistency specifically as Lewis would certainly be heading both ends.However there are various downsides of this step especially as it would certainly put too much concern over Lewis's shoulders. The fact that Lewis has to adapt her monitoring design for the marketing division recommends that these two departments would certainly be culturally diverse. In addition to this, Lewis might not have the ability to use one type of management style to both divisions which might lead to inefficiency in either one of the two features.


An evaluation of the 3 choices suggests that assimilation of marketing as well as procedures would certainly not be a practical step as a result of the vast distinctions between both divisions despite the fact that presently Lewis is managing both. While splitting up of the manufacturing feature might have been a positive move for the marketing department, the truth that it would mean positioning a 3rd feature under Lewis's wing means this need to be avoided. The integration of the advertising and marketing division is the most effective choice in terms of getting the optimum results from the department. An activity prepare for this choice is reviewed listed below.

Activity Strategy.
Lewis will take over the duty of EVP Advertising after Krasnow leaves.

Marketing and advertising functions would be merged.

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

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

Lewis will certainly separate herself from operations.

An autonomous leadership style with employee empowerment will certainly be utilized in advertising and marketing department.

Open door policy as well as emphasis on cross departmental communication will certainly be aimed at removing disharmony.

Backup plan.

If the integration does not exercise as intended, a backup strategy would adhere to which would separate the manufacturing function from the advertising and marketing feature to reduce the lots on the SVP of marketing and advertising. In case Judith Shapiro does not obtain hired, Lewis will certainly be heading the marketing division without an SVP. In that case the manufacturing function will certainly be divided by positioning it under an SVP production.