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Honest Tea Case Study Solution

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Honest Tea Case Study Solution

Background and Facts

Honest Tea a workplace supplies seller for tiny as well as moderate sized companies has recently been involved in preparing for a merger with its rival House Deport, which has impacted performance levels in departmentswith the senior manager involved in legal difficulties presented by the government Trade Compensation. With the Advertising and marketing Head putting forward the information of his departure from the company in one year, Jeannie Lewis, the present head of procedures has actually been asked to take the role in the future. With challenges in the form of a possible cultural change as well as low employee morale, the organization wants a total reengineering initiative at the advertising and marketing division.

Problem Statement
Porter's 5 Forces Analysis
The prospective cultural modification at the marketing division of Honest Tea is raising unpredictability in the workplace resulting in different obstacles for the Jeannie Lewis who would be changing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a major function in affecting critical choices given that Stapes Inc. needed to abandon its plans of merging with Office Deport after the Federal Profession Payment's treatment while doing so. Offered the fact that the store has a worldwide presence with branches in UK, U.S.A., Canada and also Germany, political factors in each of these nations might have the ability to affect efficiency or tactical objectives. Federal Trade Commission's antitrust suit versus the merging took up useful time of the organization's elderly management recommending that 'political' factors can have serious implications for a global business.

Economic Factors: Financial factors such as the development of small companies in the global circumstance recommend that Honest Tea is thriving in an environment where there is potential development of companies. In addition to this, reality that store consumers are primarily looking for workplace products for home offices recommends that the market has an increasing trend of entrepreneurs and also home based services.

Social factors: Social trends in the economic situation show that clients are seeking comfort as well as eye-catching prices. Market research demonstrates how the client for Honest Tea lacks understanding about discovering services which can provide a combination of benefit as well as inexpensive.

Technical factors: Innovation plays an important role in Honest Tea's organisation method especially as the organization is piloting Technology centers which would certainly offer modern technology sales as well as support in the form of memory upgrades, outer setups. (Summary of BUG in appendix 2).

OB Issues and also Manifestations.

A number of underlying Business Habits problems can be seen in Honest Tea's case as highlighted in this area.

Apprehensions regarding social adjustment: There is apprehension regarding a social modification that would certainly happen as soon as Todd Krasnow leaves from his position as the Exec Vice Head Of State of Advertising with most of the staff members currently revealing discontent over this potential move. This predicted change has produced stress in the office which has been coupled with the previous stress and anxiety of preparing the company for a prospective merger with Residence Deport.
Pest Analysis
Difficult Task Setting for Newcomers: There is lack of workers that can match the stressful setting of a fast-paced organization. Not just does this lead to trouble in discovering the ideal individuals, it places tension on brand-new hires as can not endure the rate as well as stress that the organization expects them to bear.

Double Reporting Lines: Novices find this business culture cumbersome and tough to handle especially as populated line partnerships are suggested to be weak generally and also objective setup and also efficiency examination is still done by the strong line manager. This indicates that newbies might lose quality concerning their respective functions and goals specifically as populated line reporting does not maintain them in direct communication with the solid line supervisors.

Animosity From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower as opposed to Bridget Coles despite the fact that it had been speculated that the latter would certainly take Krasnow's setting came as a strike to her morale. Lewis might have been qualified as well as proper for the job however the reality that Kransnow's departure would certainly make Coles a direct report to Lewis might have been the reason for Coles' resignation from services.

Worry & Work Instability: Concern as well as insecurity can be determined as two major worries that Lewis would be handling especially as the merger has actually currently be cancelled and also two senior execs of the marketing division would certainly be leaving. The entire responsibility of the division would certainly be dropping on Lewis's shoulders that would certainly not just supervise of brining concerning a social change however would also need to confirm herself in her new role.

Inappropriate Management Style of Leader: Lewis's management style as well as its conflict with the advertising department's duty can likewise be seen as an OB obstacle specifically as she has been utilized to dealing with problems in the procedures department where personnel are educated to concentrate on procedures and also obtain them. The advertising and marketing division on the other hand can be viewed as a group of individuals who are used to being nurtured by Krasnow that focused more on result than processes.

Interdepartmental Differences: Interdepartmental disputes between three departments, marketing, merchandizing as well as procedures specifically over the allocation of the marketing mix can be identified as an additional OB worry. The advertising and marketing division does not share the exact same vision as the various other 2 departments regarding the aloocation of the advertising mix twoards promotions and also advertsing, the merchandizing as well as procedures departments do not concur over the advertising and marketing mix allotment amongst one an additional either.

Fragmentation in Advertising And Marketing Division: Fragmentation in between the marketing and advertising divisions can be recognized as one more OB issue which could need additional interest. The fact that the advertising and marketing areas in the marketing department are detached is preventing both divisions from obtaining from each other's experience and also experience. Assimilation of marketing with merchandising as well as operations would become harder if the marketing division itself is degenerated which can be another prospective OB issue.

Honest Tea Analysis

Different theories have been used to explain the circumstances to obtain more clarity regarding the circumstance at hand.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, most supervisors think that subordinates are passive and lazy, have little passion as well as stand up to adjustment. The situation at Honest Tea is not completely adhering to Concept X, it can be seen that brand-new hires are finding this setting rather stressful which might ultimately lead to a better disposition of the monitoring towards Theory X. Even while evaluating Lewis's management style, theory X may have been ideal in the operations department to some level but the Marketing department would certainly need reliance on Theory Y in order to obtain the imagination and creativity from the groups.

Tuckman's Teamwork Theory: As far as Lewis's concern about bringing consistency between the marketing and advertising division is worried, this would at first bring about conflict as reviewed by Bruce Tuckman in his 'Synergy Theory'. (Tuckman, 1965). Based on Tuckman's concept displayed in appendix 3, throughout the initial stage of team development, people may not bond, as they are hectic discovering their location in the group. By combining the marketing and advertising division's job, there may coincide preliminary separate which might lead to the second phase of 'storming' where the groups challenge one another. Nonetheless, it is just during the 3rd phase or 'norming' when they would certainly collaborate to share suggestions before the team can cause harmony in the fourth stage 'carrying out'.

When individuals are provided with adjustment, they enter stage one and also so there may be feelings like despair, unpredictability, stress, rage, concern, rejection as well as disorientation.The circumstance at the marketing department of Honest Tea is similar so Lewis can get comfortable with the suggestion that it is not remarkable behavior. It is during this stage that Lewis will certainly have to provide guidance to the division so that they can locate a feeling of instructions. It can be seen just how Krasnow has already made this change simpler by making Lewis get entailed in the department a year before his real separation.
Vrio Analysis
Maslow's Demand power structure: The OB issue related to instability at the office has actually been triggered to start with by the modification in management and secondly by the reality that the merging will no more be initiated. Abraham Maslow in his Theory of 'Needs Hierarchy' (appendix 5) has discusses the value of 'security needs as being a lower level demand of a human for setting off inspiration. As seen in the pyramid shared in appendix 3, we can see exactly how 'the demand to feel safe and secure as well as untouched' is at the second level of demands. Before a worker can be made to develop emotionally, he requires to have his 'Physiological 'as well as 'Safety' needs fulfilled. This suggests that unless the personnel are made to feel safe and secure concerning their current work status in Honest Tea they may not reach 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Honest Tea Case Study



Ramification of Analysis.

The OB analysis has actually looked at numerous concepts to understand how to deal with the existing circumstance at hand. The following 3 options have been recommended to assist Lewis take care of the business difficulties in the advertising department. Each of these options has actually been recommended for reducing the change needed to bring the advertising department in line with the needs of the market as well as for making the cultural modification that would certainly follow once the current leader leaves.

Integration of marketing and advertising features. Separating Adverting and Manufacturing functions. Assimilation of Marketing with Procedures.

Examination of Alternatives.

Assimilation of Marketing & Advertising Functions: The in-house marketing firm of Honest Tea is currently stamina for the organization in terms of conserving up on expenses associated with marketing and promotion. Because no new recruitment has been done after Bridget Cole's separation with the coverage line being straight appointed to Krasnow for the advertising feature, this is a desirable opportunity for integrating the marketing and advertising features. Judith Shapiro that has earlier been interviewed by Lewis throughout the earlier merger days has expertise in business-to-business advertising along with company and also retail marketing experience. As soon as Krasnow leaves, Lewis can work with Shapiro as an EVP for marketing to handle both advertising and marketing features.

The advantage of this strategy is that it will integrate both functions while minimizing the requirement for hiring an added resource for advertising. Lewis would certainly be heading the advertising and marketing department as well as in any type of case her replacement would be required for the existing function that she is carrying out. The drawback of this option is that exterior hiring might bring about resentment from interior workers that might be eying the setting of EVP after Lewis takes control of Krasnow's placement.

Separating Adverting as well as Production: Given the competitive pressures and also high quality job needed from the advertising and marketing agency, it is suggested that Lewis must allow the manufacturing device to be a separate feature from the advertising unit. Considering that a lot of marketing companies had these two features as different systems, it makes more sense to comply with the norm.

Combination of Advertising with Operations: Considering that Lewis is currently dealing with the advertising and marketing as well as procedures divisions at the same time; it makes sense to integrate the two functions considering that she has been successfully dealing with both ends. The reality that both divisions already have major distinctions over allotment of resources suggests that this integration might have the ability to produce harmony particularly as Lewis would certainly be heading both ends.However there are various negative aspects of this step particularly as it would certainly put excessive problem over Lewis's shoulders. The fact that Lewis has to adjust her management design for the advertising division recommends that these 2 departments would certainly be culturally varied. Lewis may not be able to apply one type of leadership design to both departments which might result in inadequacy in either one of the two functions.

Suggestion.



An examination of the three alternatives suggests that combination of marketing and also operations would not be a feasible action due to the vast differences in between the two divisions despite the fact that presently Lewis is dealing with both. While splitting up of the production function might have been a favorable step for the advertising and marketing department, the reality that it would indicate putting a third function under Lewis's wing implies this ought to be stayed clear of.

Action Strategy.
Recommendation
Lewis will take control of the function of EVP Marketing after Krasnow leaves.

Marketing and advertising functions would be combined.

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

Production feature will remain part of marketing under marketing function.

Lewis will certainly divide herself from operations.

An autonomous leadership style with staff member empowerment will be used in advertising and marketing division.

Open up door policy and emphasis on cross department interaction will certainly be targeted at removing discord.

Contingency strategy.

If the combination does not exercise as planned, a backup plan would certainly comply with which would certainly separate the production function from the advertising and marketing function to lower the tons on the SVP of marketing and advertising. In case Judith Shapiro does not get hired, Lewis will be heading the advertising division without an SVP. In that case the production feature will most definitely be separated by positioning it under an SVP production.