Farallon Capital Management Risk Arbitrage A Case Study Solution


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Farallon Capital Management Risk Arbitrage A Case Study Solution

Background and Facts

Farallon Capital Management Risk Arbitrage A a workplace products seller for little and also medium sized businesses has just recently been involved in planning for a merger with its competitor House Deport, which has impacted effectiveness degrees in departmentswith the senior manager involved in legal problems presented by the government Profession Payment. With the Marketing Head putting forward the news of his separation from the business in one year, Jeannie Lewis, the present head of procedures has been asked to take the function in the future. With obstacles in the kind of a possible social adjustment and also low worker morale, the company requires a total reengineering initiative at the marketing department.

Trouble Declaration
Porter's 5 Forces Analysis
The potential cultural change at the marketing division of Farallon Capital Management Risk Arbitrage A is boosting uncertainty in the workplace leading to different 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 duty in impacting tactical choices because Stapes Inc. needed to abandon its plans of merging with Workplace Deport after the Federal Profession Payment's treatment in the process. Provided the truth that the shop has a global presence with branches in UK, U.S.A., Canada as well as Germany, political consider each of these countries may be able to impact performance or calculated objectives. Federal Trade Payment's antitrust fit against the merging occupied valuable time of the company's elderly monitoring suggesting that 'political' factors can have major implications for an international service.

Economic Factors: Financial factors such as the appearance of small companies in the international situation recommend that Farallon Capital Management Risk Arbitrage A is prospering in an atmosphere where there is potential growth of businesses. Reality that shop clients are mainly looking for workplace products for house workplaces recommends that the market has a rising fad of entrepreneurs as well as residence based organisations.

Social factors: Social patterns in the economic situation reveal that clients are trying to find ease as well as eye-catching costs. Marketing research shows how the consumer for Farallon Capital Management Risk Arbitrage A lacks understanding regarding discovering options which can use a combination of comfort as well as affordable.

Technological factors: Technology plays a vital role in Farallon Capital Management Risk Arbitrage A's business strategy especially as the organization is piloting Technology facilities which would supply technology sales and support in the form of memory upgrades, outer setups. (Summary of PARASITE in appendix 2).

OB Issues and Manifestations.

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

Concerns about social change: There is apprehension about a social change that would certainly take place when Todd Krasnow leaves from his position as the Exec Vice Head Of State of Advertising And Marketing with most of the team member currently showing discontent over this possible action. This predicted adjustment has developed tension in the work environment which has been coupled with the previous stress of preparing the company for a potential merger with House Deport.
Pest Analysis
Demanding Job Atmosphere for Newcomers: There is scarcity of employees that can match the demanding atmosphere of a fast-paced organization. Not just does this lead to problem in discovering the right individuals, it puts stress and anxiety on brand-new hires as can not hold up against the pace and also pressure that the company anticipates them to bear.

Twin Coverage Lines: Newcomers find this business society difficult as well as difficult to deal with specifically as dotted line partnerships are indicated to be weak as a whole and objective setting as well as performance evaluation is still done by the solid line manager. This indicates that newcomers could lose clarity regarding their respective functions and also purposes particularly as populated line reporting does not keep them in straight interaction with the solid line managers.

Animosity From Cross Departmental Hiring: Krasnow's decision to make Lewis his follower as opposed to Bridget Coles despite the fact that it had been guessed that the last would take Krasnow's position came as a strike to her morale. Lewis might have been qualified and appropriate for the job yet the fact that Kransnow's separation would make Coles a direct report to Lewis may have been the reason for Coles' resignation from services.

Concern & Job Insecurity: Worry as well as instability can be determined as two major problems that Lewis would certainly be dealing with particularly as the merging has now be terminated and also two elderly executives of the marketing department would certainly be leaving. The entire obligation of the department would certainly be dropping on Lewis's shoulders that would not just supervise of brining regarding a cultural adjustment however would certainly likewise need to verify herself in her new role.

Incompatible Monitoring Style of Leader: Lewis's administration design as well as its conflict with the marketing division's duty can likewise be seen as an OB challenge specifically as she has been made use of to taking care of issues in the operations department where workers are taught to focus on processes as well as obtain them. The advertising 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 outcome than processes.

Interdepartmental Differences: Interdepartmental disagreements in between 3 divisions, marketing, merchandizing and also procedures respectively over the allowance of the advertising mix can be recognized as another OB issue. Although the marketing department does not share the same vision as the various other 2 departments concerning the aloocation of the marketing mix twoards promotions and advertsing, the merchandizing as well as operations departments do not concur over the marketing mix appropriation among each other either.

Disintegration in Advertising Department: Fragmentation between the advertising and marketing divisions can be identified as one more OB issue which could need more attention. The reality that the advertising and marketing areas in the advertising and marketing department are detached is protecting against both departments from obtaining from each various other's experience as well as proficiency. Assimilation of advertising with retailing and procedures would end up being harder if the advertising and marketing division itself is broken down which can be another potential OB concern.

Farallon Capital Management Risk Arbitrage A Analysis

Different theories have been utilized to clarify the circumstances to obtain additional quality concerning the situation at hand.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Concept X, most managers think that subordinates are passive and also careless, have little aspiration and resist change. The circumstance at Farallon Capital Management Risk Arbitrage A is not totally following Theory X, it can be seen that new hires are finding this setting instead stressful which may ultimately lead to a higher inclination of the administration in the direction of Theory X. Also while examining Lewis's administration design, concept X may have been ideal in the procedures division to some extent yet the Marketing division would certainly call for reliance on Theory Y in order to obtain the creativity as well as creativity from the teams.

Tuckman's Team effort Concept: As much as Lewis's issue regarding bringing harmony in between the marketing and also marketing division is concerned, this would at first lead to contrast as discussed by Bruce Tuckman in his 'Team effort Theory'. By incorporating the advertising as well as advertising and marketing department's job, there may be the exact same initial disconnect which could lead to the second phase of 'storming' where the teams challenge one an additional.

When people are presented with change, they enter stage one and so there might be emotions like despair, uncertainty, disappointment, temper, fear, rejection as well as disorientation.The situation at the advertising division of Farallon Capital Management Risk Arbitrage A is comparable so Lewis can get comfortable with the idea that it is not phenomenal actions. It is throughout this stage that Lewis will have to offer assistance to the division so that they can discover a sense of instructions. It can be seen how Krasnow has already made this change much easier by making Lewis obtain included in the department a year prior to his real departure.
Vrio Analysis
Maslow's Need pecking order: The OB concern pertaining to insecurity at the work environment has been set off to start with by the change in administration as well as secondly by the truth that the merging will certainly no more be started. Abraham Maslow in his Theory of 'Requirements Hierarchy' (appendix 5) has discusses the significance of 'protection requires as being a reduced level need 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 also safe' is at the second level of demands. Prior to an employee can be made to create emotionally, he requires to have his 'Physical 'as well as 'Safety and security' needs fulfilled. This shows that unless the employees are made to feel safe regarding their current employment condition in Farallon Capital Management Risk Arbitrage A they may not get to 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Farallon Capital Management Risk Arbitrage A Case Study

Effects of Analysis.

The OB analysis has checked out various theories to comprehend how to manage the existing situation handy. The adhering to three choices have been suggested to assist Lewis manage the organizational difficulties in the advertising and marketing department. Each of these choices has been suggested for easing the shift needed to bring the advertising department in accordance with the requirements of the market as well as for making the social adjustment that would adhere to as soon as the current leader leaves.

Integration of marketing and advertising functions. Separating Adverting and Manufacturing functions. Combination of Advertising And Marketing with Workflow.

Assessment of Alternatives.

Judith Shapiro that has actually earlier been spoken with by Lewis throughout the earlier merger days has proficiency in business-to-business marketing along with agency and retail marketing experience. As soon as Krasnow leaves, Lewis can employ Shapiro as an EVP for advertising and marketing to deal with both advertising as well as advertising features.

The advantage of this technique is that it will incorporate the two features while lowering the need for employing an added resource for advertising. Lewis would be heading the advertising and marketing department and in any kind of case her substitute would be required for the current role that she is doing. The disadvantage of this alternative is that external hiring might produce animosity from inner personnel that may be looking at the position of EVP after Lewis takes over Krasnow's placement.

Dividing Adverting as well as Manufacturing: Given the competitive pressures and also high quality work required from the advertising and marketing firm, it is advised that Lewis must permit the manufacturing system to be a separate feature from the advertising system. Given that most advertising and marketing companies had these 2 features as separate units, it makes more feeling to comply with the norm.

Assimilation of Advertising with Procedures: Given that Lewis is currently dealing with the advertising and operations departments concurrently; it makes sense to integrate both functions because she has actually been successfully caring for both ends. The reality that both departments already have significant differences over allocation of resources recommends that this assimilation may have the ability to cause consistency especially as Lewis would be heading both ends.However there are various disadvantages of this action specifically as it would certainly put too much burden over Lewis's shoulders. The truth that Lewis has to adapt her monitoring design for the marketing department recommends that these 2 divisions would be culturally varied. Along with this, Lewis might not have the ability to use one type of leadership style to both divisions which might cause ineffectiveness in either among the two functions.


An analysis of the three options shows that assimilation of advertising and marketing and also procedures would certainly not be a feasible action as a result of the huge distinctions between both departments although that presently Lewis is managing both. While splitting up of the manufacturing feature may have been a beneficial move for the marketing department, the reality that it would indicate positioning a third feature under Lewis's wing implies this should be prevented. The integration of the advertising and marketing department is the very best alternative in regards to getting the optimum results from the division. An activity plan for this alternative is discussed listed below.

Action Strategy.
Lewis will take control of the role of EVP Advertising and marketing after Krasnow leaves.

Advertising and Marketing functions would certainly be merged.

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

Manufacturing feature will certainly remain part of advertising and marketing under advertising function.

Lewis will certainly divide herself from procedures.

A democratic management style with staff member empowerment will be made use of in advertising division.

Open door policy and also focus on cross department communication will be targeted at eliminating disharmony.

Backup strategy.

If the combination does not exercise as intended, a backup plan would certainly follow which would certainly divide the production function from the marketing feature to lower the tons on the SVP of marketing and advertising. In case Judith Shapiro does not obtain employed, Lewis will certainly be heading the advertising and marketing division without an SVP. In that case the production feature will most definitely be separated by putting it under an SVP manufacturing.