Enron Gas Services Case Study Analysis


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Enron Gas Services Case Study Solution

Background and Facts

Enron Gas Services a workplace materials merchant for small and medium sized companies has actually recently been associated with preparing for a merger with its rival Residence Deport, which has actually impacted effectiveness levels in departmentswith the senior supervisor involved in lawful complications presented by the federal Trade Payment. With the Advertising and marketing Head advancing the news of his departure from the company in one year, Jeannie Lewis, the current head of operations has been asked to take the duty in the future. With difficulties in the type of a potential social change as well as reduced employee spirits, the organization requires a full reengineering effort at the advertising and marketing division.

Issue Declaration
Porter's 5 Forces Analysis
The possible cultural modification at the advertising division of Enron Gas Services is increasing uncertainty in the working environment resulting in various obstacles for the Jeannie Lewis who would certainly be replacing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant function in affecting critical decisions since Stapes Inc. needed to abandon its strategies of combining with Office Deport after the Federal Profession Compensation's intervention at the same time. Provided the reality that the shop has a worldwide existence with branches in UK, UNITED STATES, Canada and also Germany, political factors in each of these countries might have the ability to influence performance or strategic goals. Federal Trade Commission's antitrust fit against the merger occupied beneficial time of the company's elderly management recommending that 'political' factors can have major effects for a worldwide service.

Economic Factors: Economic factors such as the appearance of small companies in the worldwide circumstance recommend that Enron Gas Services is growing in an atmosphere where there is prospective growth of businesses. Fact that shop customers are mainly looking for workplace supplies for residence workplaces recommends that the market has a rising fad of business owners and home based companies.

Social factors: Social patterns in the economy reveal that consumers are seeking ease along with attractive costs. Marketing research demonstrates how the client for Enron Gas Services does not have awareness regarding locating services which can supply a mix of convenience and also affordable.

Technological factors: Innovation plays an essential role in Enron Gas Services's business strategy especially as the organization is piloting Modern technology centers which would offer innovation sales and also assistance in the kind of memory upgrades, peripheral setups. (Recap of PARASITE in appendix 2).

OB Issues and also Effects.

Several underlying Organizational Behavior concerns can be seen in Enron Gas Services's case as highlighted in this area.

Uneasiness concerning social change: There is concern concerning a social adjustment that would certainly take place when Todd Krasnow leaves from his position as the Executive Vice Head Of State of Marketing with most of the employee already showing unhappiness over this prospective action. This anticipated change has developed stress and anxiety in the work environment which has been coupled with the past stress and anxiety of preparing the firm for a prospective merging with Home Deport.
Pest Analysis
Demanding Job Environment for Newcomers: There is scarcity of personnel that can match the difficult atmosphere of a busy organization. Not just does this bring about difficulty in locating the ideal people, it places anxiety on brand-new hires as can not endure the rate and pressure that the organization expects them to birth.

Double Reporting Lines: Newbies locate this business society troublesome as well as challenging to deal with particularly as populated line relationships are implied to be weaker generally as well as objective setting and also performance evaluation is still done by the solid line manager. This implies that novices could lose clearness concerning their respective duties as well as objectives specifically as dotted line reporting does not keep them in straight communication with the strong line supervisors.

Resentment From Cross Departmental Hiring: Krasnow's choice to make Lewis his successor instead of Bridget Coles although it had actually been speculated that the latter would certainly take Krasnow's placement came as a blow to her spirits. Lewis might have been capable and also suitable for the job yet the fact that Kransnow's departure would certainly make Coles a straight record to Lewis may have been the reason for Coles' resignation from services.

Concern & Job Instability: Anxiety and instability can be recognized as 2 significant problems that Lewis would certainly be dealing with specifically as the merger has actually now be cancelled as well as 2 elderly executives of the advertising and marketing department would certainly be leaving. The entire responsibility of the division would certainly be falling on Lewis's shoulders that would not just be in charge of brining concerning a social modification yet would certainly also need to confirm herself in her brand-new role.

Incompatible Management Style of Leader: Lewis's management design and its incompatibility with the advertising and marketing department's role can also be seen as an OB challenge specifically as she has actually been made use of to handling problems in the procedures department where workers are educated to focus on procedures and get them. The marketing division on the various other hand can be seen as a team of individuals that are made use of to being nurtured by Krasnow that concentrated more on result than processes.

Interdepartmental Arguments: Interdepartmental arguments between 3 departments, advertising and marketing, merchandizing as well as operations respectively over the allocation of the advertising and marketing mix can be determined as another OB issue. Although the advertising and marketing division does not share the very same vision as the various other 2 divisions concerning the aloocation of the marketing mix twoards promotions as well as advertsing, the merchandizing and procedures divisions do not agree over the marketing mix allotment amongst each other either.

Disintegration in Advertising And Marketing Division: Disintegration between the advertising and marketing departments can be recognized as another OB concern which could need more interest. The fact that the marketing and advertising sections in the advertising division are detached is stopping both divisions from obtaining from each various other's experience and also knowledge. Combination of advertising with retailing and also procedures would certainly come to be harder if the advertising and marketing department itself is broken down which can be an additional prospective OB problem.

Enron Gas Services Analysis

Various concepts have been utilized to explain the situations to obtain additional quality concerning the circumstance available.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, many managers believe that subordinates are passive as well as careless, have little aspiration and resist adjustment. The tough version of this theory stressed coercion, limited controls, risks as well as penalties. Gradually it generates reduced productivity, subtle sabotage as well as rivalry (Offer, 2003). The situation at Enron Gas Services is not entirely following Concept X, it can be seen that new hires are locating this setting rather stressful which might eventually lead to a better disposition of the administration towards Theory X. According to McGregor's advocated sight, which he called Theory Y, the vital task of the management is to organize business problems to ensure that individuals can accomplish their own objectives best by routing their initiatives in the direction of business benefits. If individuals locate no contentment in their work, the management would have little selection but to rely on theory X and also exterior control (Offer, 2003). Also while assessing Lewis's administration style, concept X may have been suitable in the operations division to some extent but the Advertising and marketing department would require dependence on Concept Y so as to get the creative thinking as well as originality from the teams.

Tuckman's Teamwork Concept: As far as Lewis's problem concerning bringing harmony in between the advertising and marketing division is worried, this would at first lead to contrast as discussed by Bruce Tuckman in his 'Synergy Concept'. By incorporating the advertising and marketing and also advertising department's job, there may be the exact same first detach which can lead to the second stage of 'storming' where the groups challenge one an additional.

Bridges' Change Version: According To William Bridge's concept (appendix 4), people are fairly uneasy with change, which is noticeable by the situation at Enron Gas Services The situation can be viewed as a normal course of life if is researched as per Bridge's concept where he clarifies that people experience 3 stages of transition when they experience modification. 'Ending, shedding and also Releasing', The Neutral Area and also 'The New Beginning' (Bridges, 2004). When individuals are presented with change, they get in phase one therefore there might be emotions like unhappiness, unpredictability, stress, anger, worry, rejection and also disorientation.The circumstance at the advertising division of Enron Gas Services is comparable so Lewis can obtain comfortable with the concept that it is not amazing behavior. In the 2nd stage, there might be a need to link the void in between the brand-new as well as old culture so Lewis may have to encounter this ordeal once Krasnow leaves. There may be reduced spirits as well as reduced performance at this phase which must not be taken as a setback. It is during this stage that Lewis will need to offer support to the division to make sure that they can find an orientation. It can be seen just how Krasnow has actually already made this transition less complicated by making Lewis get involved in the division a year before his actual separation. As per Bridges' Version, phase three will certainly bring about openness to knowing, High energy and also dedication as individuals will certainly welcome the change (Bridges, 2004).
Vrio Analysis
Maslow's Need hierarchy: The OB issue related to instability at the work environment has actually been triggered first of all by the change in administration and also secondly by the truth that the merger will no more be started. Abraham Maslow in his Theory of 'Demands Power structure' (appendix 5) has reviews the importance of 'safety needs as being a lower level need of a human for causing inspiration. As seen in the pyramid shared in appendix 3, we can see how 'the need to really feel secure and also out of danger' goes to the 2nd degree of needs. Prior to a worker can be made to create emotionally, he requires to have his 'Physical 'and 'Security' requires satisfied. This shows that unless the workers are made to feel protected regarding their current work standing in Enron Gas Services they might not get to 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Enron Gas Services Case Study

Effects of Analysis.

The OB analysis has considered numerous theories to recognize just how to manage the present situation available. The adhering to 3 alternatives have been suggested to aid Lewis manage the organizational difficulties in the marketing department. Each of these choices has actually been recommended for easing the transition needed to bring the advertising department according to the requirements of the marketplace and also for making the cultural adjustment that would certainly follow once the present leader leaves.

Assimilation of marketing and advertising features. Separating Adverting and Production features. Integration of Marketing with Operations.

Analysis of Alternatives.

Judith Shapiro who has earlier been interviewed by Lewis during the earlier merger days has knowledge in business-to-business marketing along with agency and retail marketing experience. When Krasnow leaves, Lewis can employ Shapiro as an EVP for marketing to handle both marketing as well as advertising and marketing features.

The benefit of this technique is that it will certainly incorporate the two features while minimizing the need for hiring an added source for advertising. Along with this, Lewis would be heading the advertising department and also all the same her replacement would certainly be needed for the existing role that she is carrying out. The disadvantage of this choice is that outside hiring may cause bitterness from interior personnel that may be looking at the setting of EVP after Lewis takes over Krasnow's setting.

Separating Adverting and also Manufacturing: Given the affordable pressures and also high top quality job needed from the marketing firm, it is advised that Lewis ought to enable the production system to be a separate function from the marketing device. Given that the majority of advertising agencies had these 2 features as separate units, it makes even more feeling to follow the standard.

Combination of Marketing with Operations: Because Lewis is currently caring for the advertising as well as procedures departments simultaneously; it makes sense to integrate the two features given that she has been effectively taking care of both ends. The fact that the two divisions currently have major differences over allotment of resources suggests that this assimilation may be able to bring about harmony especially as Lewis would be heading both ends.However there are numerous negative aspects of this action especially as it would put excessive worry over Lewis's shoulders. The truth that Lewis needs to adjust her monitoring style for the advertising and marketing division recommends that these two departments would be culturally varied. Lewis may not be able to apply one kind of management design to both divisions which can result in ineffectiveness in either one of the 2 functions.


An evaluation of the 3 options shows that integration of marketing as well as operations would not be a viable move due to the large distinctions between both divisions despite the fact that presently Lewis is managing both. While splitting up of the manufacturing feature may have been a beneficial action for the marketing department, the truth that it would indicate positioning a 3rd function under Lewis's wing indicates this ought to be prevented also. The integration of the advertising department is the best option in regards to getting the optimal arise from the division. An action prepare for this alternative is discussed below.

Action Strategy.
Lewis will certainly take over the function of EVP Advertising after Krasnow leaves.

Advertising and Marketing features would be combined.

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

Manufacturing function will certainly continue to be component of advertising and marketing under marketing feature.

Lewis will separate herself from procedures.

A democratic leadership style with employee empowerment will certainly be made use of in marketing division.

Open up door policy and focus on cross department communication will certainly be focused on removing dissonance.

Backup strategy.

If the combination does not work out as planned, a contingency plan would certainly comply with which would divide the manufacturing function from the marketing function to reduce the tons 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. In that case the manufacturing function will certainly be separated by putting it under an SVP production.