Freeport Indonesia Case Study Analysis


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Freeport Indonesia Case Study Analysis

Background and Facts

Freeport Indonesia a workplace products store for little as well as medium sized businesses has actually just recently been associated with preparing for a merging with its rival Residence Deport, which has impacted effectiveness levels in departmentswith the elderly supervisor associated with legal difficulties put forth by the federal Trade Payment. With the Advertising Head advancing the news of his departure from the firm in one year, Jeannie Lewis, the current head of procedures has actually been asked to take the role in the future. With obstacles in the form of a possible cultural change and reduced staff member spirits, the organization needs a full reengineering initiative at the advertising division.

Problem Declaration
Porter's 5 Forces Analysis
The possible social adjustment at the advertising and marketing division of Freeport Indonesia is enhancing unpredictability in the workplace causing numerous difficulties for the Jeannie Lewis that would be replacing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a major duty in affecting tactical choices considering that Stapes Inc. had to abandon its plans of combining with Workplace Deport after the Federal Trade Commission's intervention while doing so. Offered the fact that the shop has a worldwide existence with branches in UK, USA, Canada and also Germany, political consider each of these nations may have the ability to impact efficiency or strategic goals. Federal Trade Compensation's antitrust suit versus the merger occupied useful time of the company's senior administration recommending that 'political' factors can have serious ramifications for a worldwide service.

Economic Factors: Financial factors such as the introduction of small businesses in the international situation suggest that Freeport Indonesia is growing in an environment where there is potential development of businesses. Truth that shop consumers are mostly looking for office supplies for home offices suggests that the market has a rising trend of entrepreneurs as well as house based companies.

Social factors: Social fads in the economic climate reveal that consumers are seeking comfort as well as attractive costs. Marketing research demonstrates how the consumer for Freeport Indonesia does not have understanding concerning finding remedies which can use a combination of benefit and low costs.

Technical factors: Innovation plays an important role in Freeport Indonesia's business method especially as the company is piloting Innovation centers which would certainly use innovation sales as well as support in the kind of memory upgrades, peripheral installments. (Recap of BUG in appendix 2).

OB Issues and also Manifestations.

A number of underlying Business Habits issues can be seen in Freeport Indonesia's case as highlighted in this area.

Uneasiness about social change: There is concern concerning a social change that would certainly occur when Todd Krasnow leaves from his placement as the Exec Vice President of Advertising And Marketing with most of the personnel currently revealing discontent over this possible relocation. This predicted modification has created stress and anxiety in the office which has actually been paired with the past stress of preparing the company for a possible merger with Residence Deport.
Pest Analysis
Difficult Job Environment for Newcomers: There is lack of employees that can match the stressful setting of a fast-paced organization. Not only does this cause problem in discovering the right people, it places anxiety on new hires as can not hold up against the rate and also pressure that the organization anticipates them to birth.

Dual Coverage Lines: Novices find this business culture difficult as well as challenging to handle particularly as populated line relationships are suggested to be weak generally and unbiased setting and performance analysis is still done by the solid line manager. This means that newcomers could lose clearness about their respective duties as well as objectives particularly as populated line coverage does not maintain them in straight communication with the solid line managers.

Animosity From Cross Departmental Hiring: Krasnow's decision to make Lewis his follower instead of Bridget Coles even though it had been hypothesized that the latter would take Krasnow's placement came as a strike to her spirits. Lewis may have been capable as well as appropriate for the job but the truth that Kransnow's departure would make Coles a direct record to Lewis might have been the reason for Coles' resignation from services.

Concern & Work Insecurity: Fear and insecurity can be recognized as 2 significant issues that Lewis would be dealing with specifically as the merging has actually currently be terminated and two elderly execs of the advertising and marketing division would certainly be leaving. The entire responsibility of the division would be falling on Lewis's shoulders who would not just supervise of brining about a social change but would likewise have to verify herself in her brand-new role.

Incompatible Management Style of Leader: Lewis's administration style as well as its incompatibility with the advertising and marketing department's function can likewise be seen as an OB difficulty especially as she has actually been made use of to dealing with concerns in the procedures department where personnel are taught to focus on processes as well as obtain them. The marketing division on the other hand can be seen as a group of individuals who are used to being supported by Krasnow who concentrated much more on outcome than procedures.

Interdepartmental Differences: Interdepartmental arguments in between three departments, advertising and marketing, merchandizing and procedures specifically over the appropriation of the marketing mix can be identified as another OB worry. The advertising and marketing division does not share the very same vision as the other two departments regarding the aloocation of the advertising and marketing mix twoards promotions as well as advertsing, the merchandizing and operations divisions do not concur over the marketing mix allowance among one an additional either.

Disintegration in Marketing Department: Fragmentation in between the advertising and marketing departments can be identified as one more OB issue which could need more interest. The fact that the marketing and advertising sections in the marketing department are disconnected is stopping both departments from obtaining from each various other's experience and also know-how. Combination of advertising and marketing with retailing as well as operations would end up being more difficult if the marketing division itself is degenerated which can be an additional possible OB problem.

Freeport Indonesia Analysis

Different concepts have actually been used to explain the scenarios to obtain further clarity concerning the scenario available.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Concept X, many supervisors believe that subordinates are passive and also lazy, have little aspiration and stand up to modification. The difficult version of this theory stressed coercion, limited controls, dangers as well as penalties. With time it produces low productivity, refined sabotage and competition (Deal, 2003). The situation at Freeport Indonesia is not entirely complying with Theory X, it can be seen that brand-new hires are finding this setting rather demanding which might at some point lead to a greater disposition of the administration in the direction of Theory X. Based on McGregor's advocated sight, which he called Concept Y, the crucial job of the administration is to prepare business conditions to make sure that individuals can attain their own goals best by directing their initiatives in the direction of business rewards. If people discover no contentment in their work, the monitoring would certainly have little selection however to count on theory X as well as outside control (Deal, 2003). Even while evaluating Lewis's management style, concept X might have been suitable in the operations division somewhat yet the Marketing department would certainly call for dependence on Theory Y to get the imagination as well as creativity from the teams.

Tuckman's Teamwork Theory: As far as Lewis's problem about bringing harmony in between the advertising and also advertising division is worried, this would originally lead to clash as discussed by Bruce Tuckman in his 'Team effort Concept'. By integrating the marketing and advertising division's job, there may be the very same preliminary detach which might lead to the 2nd stage of 'storming' where the groups test one another.

When people are provided with adjustment, they get in stage one and so there might be emotions like despair, uncertainty, irritation, rage, concern, denial and also disorientation.The scenario at the advertising department of Freeport Indonesia is similar so Lewis can obtain comfy with the concept that it is not phenomenal actions. It is throughout this stage that Lewis will certainly have to provide support to the department so that they can locate a sense of direction. It can be seen how Krasnow has actually already made this change much easier by making Lewis obtain involved in the division a year before his real separation.
Vrio Analysis
Abraham Maslow in his Theory of 'Needs Pecking order' (appendix 5) has goes over the value of 'safety requires as being a reduced degree need of a human for setting off inspiration. As seen in the pyramid shared in appendix 3, we can see exactly how 'the demand to really feel secure as well as out of danger' is at the 2nd degree of demands. Prior to a worker can be made to develop mentally, he needs to have his 'Physical 'and also 'Safety' needs satisfied.

SWOT Analysis for Freeport Indonesia Case Study

Implication of Analysis.

The OB analysis has looked at various theories to recognize exactly how to manage the present scenario handy. The adhering to 3 choices have been proposed to assist Lewis take care of the business difficulties in the advertising and marketing department. Each of these alternatives has actually been suggested for relieving the shift needed to bring the advertising and marketing division according to the demands of the marketplace and also for making the social adjustment that would certainly comply with as soon as the present leader leaves.

Combination of marketing and advertising features. Separating Adverting and also Manufacturing features. Assimilation of Marketing with Procedures.

Evaluation of Alternatives.

Assimilation of Advertising And Marketing & Advertising Functions: The in-house advertising and marketing agency of Freeport Indonesia is already stamina for the company in terms of saving up on overheads related to marketing and also promo. Given that no brand-new employment has actually been done after Bridget Cole's separation with the coverage line being directly assigned to Krasnow for the marketing feature, this is a desirable possibility for integrating the marketing and advertising features. Judith Shapiro that has actually earlier been interviewed by Lewis throughout the earlier merging days has know-how in business-to-business advertising together with agency and retail marketing experience. When Krasnow leaves, Lewis can work with Shapiro as an EVP for advertising to deal with both marketing and advertising features.

The benefit of this approach is that it will incorporate the two functions while decreasing the requirement for employing an extra source for advertising and marketing. Lewis would certainly be heading the marketing department and also in any case her substitute would certainly be required for the present duty that she is executing. The downside of this choice is that exterior hiring may produce resentment from interior workers that might be eying the placement of EVP after Lewis takes control of Krasnow's setting.

Separating Adverting and Manufacturing: Provided the competitive pressures and high top quality job needed from the marketing company, it is advised that Lewis ought to allow the manufacturing system to be a separate function from the advertising device. Because many advertising companies had these two features as different systems, it makes even more feeling to adhere to the norm.

Combination of Advertising And Marketing with Workflows: Given that Lewis is currently taking treatment of the marketing and also operations departments all at once; it makes sense to integrate the 2 functions given that she has been efficiently taking care of both ends. The fact that Lewis has to adjust her monitoring design for the marketing department recommends that these 2 departments would certainly be culturally varied.


An examination of the 3 choices indicates that assimilation of advertising as well as procedures would certainly not be a feasible step as a result of the vast distinctions between both divisions despite the fact that presently Lewis is taking care of both. While separation of the manufacturing feature might have been a favorable move for the advertising and marketing division, the fact that it would indicate positioning a third function under Lewis's wing suggests this should be prevented too. The combination of the advertising and marketing department is the very best choice in regards to obtaining the optimum arise from the division. An activity prepare for this option is talked about listed below.

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

Marketing and advertising features would certainly be combined.

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

Manufacturing feature will stay part of advertising and marketing under advertising and marketing function.

Lewis will certainly separate herself from operations.

A democratic management design with staff member empowerment will certainly be used in advertising division.

Open up door policy and also emphasis on cross department interaction will certainly be targeted at getting rid of dissonance.

Backup plan.

If the assimilation does not work out as planned, a contingency strategy would adhere to which would divide the production function from the marketing feature to lower the lots on the SVP of marketing and advertising. In case Judith Shapiro does not obtain employed, Lewis will certainly be heading the marketing department without an SVP. In that case the manufacturing feature will certainly be divided by placing it under an SVP production.