Menu

Farallon Capital Management Risk Arbitrage A Case Study Analysis

CASE STUDY

Home >> Harvard >> Farallon Capital Management Risk Arbitrage A >>

Farallon Capital Management Risk Arbitrage A Case Study Analysis

Background and Facts

Farallon Capital Management Risk Arbitrage A an office materials seller for little as well as moderate sized companies has actually just recently been associated with planning for a merging with its competitor Residence Deport, which has influenced effectiveness levels in departmentswith the elderly supervisor associated with lawful complications presented by the government Trade Compensation. With the Advertising Head advancing the information of his separation from the firm in one year, Jeannie Lewis, the current head of procedures has been asked to take the duty in the near future. With challenges in the type of a prospective social adjustment as well as reduced worker morale, the company requires a complete reengineering effort at the marketing division.

Problem Declaration
Porter's 5 Forces Analysis
The prospective cultural adjustment at the advertising and marketing department of Farallon Capital Management Risk Arbitrage A is raising uncertainty in the workplace resulting in numerous challenges 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 major function in affecting strategic choices since Stapes Inc. had to abandon its plans of merging with Workplace Deport after the Federal Trade Compensation's treatment at the same time. Given the truth that the store has a worldwide visibility with branches in UK, UNITED STATES, Canada as well as Germany, political consider each of these countries may be able to impact performance or tactical objectives. Federal Profession Commission's antitrust match versus the merging occupied beneficial time of the organization's senior monitoring suggesting that 'political' factors can have major effects for a worldwide organisation.

Economic Factors: Economic factors such as the emergence of small companies in the worldwide circumstance recommend that Farallon Capital Management Risk Arbitrage A is flourishing in an atmosphere where there is possible development of services. In addition to this, truth that store customers are mostly looking for workplace materials for home offices suggests that the market has a rising trend of entrepreneurs as well as online services.

Social factors: Social fads in the economy show that consumers are trying to find convenience along with eye-catching rates. Market research shows how the consumer for Farallon Capital Management Risk Arbitrage A lacks understanding concerning finding solutions which can provide a mix of convenience and also inexpensive.

Technological factors: Modern technology plays an essential role in Farallon Capital Management Risk Arbitrage A's service technique specifically as the company is piloting Technology facilities which would certainly supply modern technology sales as well as support in the kind of memory upgrades, outer installments. (Recap of BUG in appendix 2).

OB Issues and also Symptoms.

A number of underlying Organizational Habits issues can be seen in Farallon Capital Management Risk Arbitrage A's case as highlighted in this area.

Apprehensions concerning social adjustment: There is apprehension concerning a social modification that would take place when Todd Krasnow leaves from his setting as the Exec Vice Head Of State of Advertising with the majority of the staff members already revealing discontent over this possible step. This expected adjustment has actually produced tension in the workplace which has actually been paired with the previous stress and anxiety of preparing the company for a potential merger with House Deport.
Pest Analysis
Demanding Task Setting for Newcomers: There is shortage of employees that can match the stressful atmosphere of a hectic company. Not just does this result in difficulty in finding the right people, it puts anxiety on brand-new hires as can not stand up to the pace and also stress that the organization expects them to bear.

Double Reporting Lines: Novices locate this business society troublesome as well as hard to handle especially as dotted line relationships are implied to be weak in general as well as unbiased setting as well as performance assessment is still done by the solid line supervisor. This means that newcomers can shed clarity about their corresponding roles and purposes particularly as populated line coverage does not maintain them in straight communication with the solid line supervisors.

Bitterness From Cross Departmental Hiring: Krasnow's decision to make Lewis his successor instead of Bridget Coles even though it had been speculated that the last would take Krasnow's placement came as a blow to her morale. Lewis may have been qualified as well as appropriate for the task but the fact that Kransnow's departure would certainly make Coles a straight record to Lewis may have been the factor for Coles' resignation from solutions.

Anxiety & Work Instability: Anxiety and also instability can be identified as two major issues that Lewis would certainly be dealing with particularly as the merger has currently be terminated and two senior executives of the advertising and marketing division would certainly be leaving. The entire obligation of the department would certainly be dropping on Lewis's shoulders who would certainly not simply be in charge of brining regarding a cultural change but would also need to verify herself in her brand-new function.

Inappropriate Monitoring Design of Leader: Lewis's administration style as well as its conflict with the marketing division's role can likewise be seen as an OB challenge specifically as she has actually been used to managing concerns in the operations division where workers are instructed to focus on procedures and also obtain them. The advertising and marketing division on the other hand can be seen as a team of people who are made use of to being nurtured by Krasnow who focused a lot more on output than procedures.

Interdepartmental Arguments: Interdepartmental differences between 3 departments, marketing, merchandizing and operations respectively over the allotment of the advertising and marketing mix can be identified as an additional OB issue. Although the advertising and marketing department does not share the exact same vision as the various other 2 departments relating to the aloocation of the advertising and marketing mix twoards promos and also advertsing, the merchandizing and also procedures departments do not concur over the advertising mix allotment amongst one another either.

Disintegration in Advertising Division: Disintegration in between the marketing and advertising divisions can be identified as an additional OB concern which might need additional interest. The fact that the marketing and advertising sections in the advertising department are separated is stopping both departments from getting from each various other's experience and also competence. Integration of advertising and marketing with retailing as well as procedures would certainly become harder if the marketing department itself is disintegrated which can be one more potential OB problem.

Farallon Capital Management Risk Arbitrage A Analysis

Various concepts have been used to clarify the circumstances to get additional quality concerning the scenario handy.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Concept X, many managers think that subordinates are easy and also lazy, have little aspiration and withstand adjustment. The scenario at Farallon Capital Management Risk Arbitrage A is not entirely adhering to Concept X, it can be seen that brand-new hires are locating this setting instead difficult which might at some point lead to a greater disposition of the monitoring towards Theory X. Also while assessing Lewis's administration style, concept X may have been appropriate in the operations department to some degree but the Marketing department would call for dependence on Theory Y in order to get the creativity as well as creativity from the groups.

Tuckman's Synergy Concept: As much as Lewis's issue about bringing consistency in between the marketing and also marketing division is worried, this would originally lead to clash as discussed by Bruce Tuckman in his 'Team effort Theory'. By integrating the marketing as well as advertising department's job, there may be the same first disconnect which can lead to the 2nd stage of 'storming' where the groups challenge one an additional.

When people are presented with change, they enter stage one and also so there might be emotions like unhappiness, uncertainty, irritation, anger, concern, denial and also disorientation.The circumstance at the advertising and marketing department of Farallon Capital Management Risk Arbitrage A is similar so Lewis can get comfortable with the concept that it is not amazing actions. It is during this stage that Lewis will certainly have to give support to the department so that they can locate a sense of direction. It can be seen how Krasnow has currently made this transition easier by making Lewis get included in the department a year before his actual departure.
Vrio Analysis
Maslow's Need pecking order: The OB problem pertaining to insecurity at the work environment has actually been triggered first of all by the adjustment in monitoring as well as secondly by the fact that the merging will no longer be started. Abraham Maslow in his Concept of 'Demands Hierarchy' (appendix 5) has goes over the value of 'safety requires as being a reduced level requirement of a human for causing inspiration. As seen in the pyramid shared in appendix 3, we can see how 'the demand to feel safe as well as out of danger' is at the second level of requirements. Prior to a staff member can be made to establish emotionally, he needs to have his 'Physical 'and 'Security' requires met. This indicates that unless the employees are made to feel safe and secure concerning their present employment status in Farallon Capital Management Risk Arbitrage A they might not reach 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Farallon Capital Management Risk Arbitrage A Case Study



Ramification of Analysis.

The OB analysis has taken a look at different concepts to comprehend just how to deal with the present scenario at hand. The following 3 choices have actually been recommended to help Lewis manage the business difficulties in the advertising department. Each of these alternatives has been proposed for alleviating the change required to bring the marketing division according to the needs of the marketplace as well as for making the cultural modification that would certainly comply with when the current leader leaves.

Integration of marketing and advertising features. Dividing Adverting as well as Production features. Integration of Advertising And Marketing with Workflow.

Assessment of Alternatives.

Judith Shapiro who has actually earlier been interviewed by Lewis throughout the earlier merger days has expertise in business-to-business advertising and marketing along with firm as well as retail advertising and marketing experience. When Krasnow leaves, Lewis can employ Shapiro as an EVP for advertising and marketing to deal with both advertising as well as marketing functions.

The advantage of this method is that it will certainly integrate both functions while decreasing the requirement for working with an extra resource for advertising and marketing. Along with this, Lewis would certainly be heading the advertising and marketing division and in any case her replacement would certainly be needed for the existing role that she is doing. The negative aspect of this choice is that external hiring might cause bitterness from internal personnel that might be eying the placement of EVP after Lewis takes control of Krasnow's setting.

Dividing Adverting and also Production: Provided the competitive pressures and top quality job called for from the ad agency, it is advised that Lewis needs to enable the production system to be a separate feature from the advertising and marketing unit. Given that most advertising agencies had these 2 features as different systems, it makes even more feeling to comply with the standard. In addition to this, both features may be able to concentrate on their core triggers a lot more successfully. The negative aspect of this approach would certainly be that additional prices would certainly have to be birthed for setting up separate production functions. A manufacturing head might have to be employed which could increase overheads for the organization.

Combination of Advertising And Marketing with Operations: Given that Lewis is already taking care of the advertising and marketing and operations departments all at once; it makes feeling to incorporate the 2 functions since she has been efficiently taking care of both ends. The truth that Lewis has to adjust her administration style for the advertising and marketing division recommends that these two divisions would certainly be culturally varied.

Suggestion.



An evaluation of the three choices shows that integration of advertising and marketing and also procedures would not be a practical step due to the vast differences between the two departments regardless of the reality that presently Lewis is handling both. While splitting up of the production feature might have been a desirable step for the advertising and marketing department, the reality that it would mean placing a 3rd feature under Lewis's wing means this should be avoided.

Activity Plan.
Recommendation
Lewis will certainly take over the role of EVP Advertising and marketing after Krasnow leaves.

Advertising and Marketing functions would be combined.

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

Production feature will remain part of advertising and marketing under advertising and marketing feature.

Lewis will separate herself from operations.

An autonomous leadership style with worker empowerment will certainly be used in advertising and marketing division.

Open up door policy and also focus on cross department communication will be aimed at getting rid of dissonance.

Contingency strategy.

If the integration does not exercise as planned, a contingency plan would certainly adhere to which would certainly divide the production 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 worked with, Lewis will be heading the marketing department without an SVP. Because case the manufacturing feature will absolutely be separated by positioning it under an SVP production.