Hong Kongs Financial Crisis 1997 98 Case Study Solution


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Hong Kongs Financial Crisis 1997 98 Case Study Solution

Background and Facts

Hong Kongs Financial Crisis 1997 98 a workplace products seller for tiny as well as moderate sized organisations has actually just recently been associated with preparing for a merging with its competitor Home Deport, which has actually impacted effectiveness levels in departmentswith the elderly manager associated with legal complications put forth by the government Trade Commission. With the Advertising and marketing Head putting forward the information of his separation from the company in one year, Jeannie Lewis, the current head of operations has been asked to take the role in the future. With challenges in the type of a prospective social change and low staff member spirits, the organization requires a total reengineering initiative at the marketing department.

Problem Declaration
Porter's 5 Forces Analysis
The potential cultural adjustment at the advertising and marketing department of Hong Kongs Financial Crisis 1997 98 is increasing uncertainty in the workplace causing numerous difficulties for the Jeannie Lewis that would certainly be changing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant function in impacting strategic choices given that Stapes Inc. had to desert its strategies of combining with Office Deport after the Federal Trade Payment's intervention while doing so. Provided the reality that the shop has an international visibility with branches in UK, UNITED STATES, Canada and also Germany, political factors in each of these countries may be able to impact performance or tactical goals. Federal Trade Payment's antitrust match versus the merger occupied valuable time of the organization's senior monitoring recommending that 'political' factors can have major ramifications for a global business.

Economic Factors: Financial factors such as the emergence of small businesses in the global situation recommend that Hong Kongs Financial Crisis 1997 98 is flourishing in an atmosphere where there is possible development of organisations. Fact that shop consumers are primarily looking for office supplies for house offices suggests that the market has an increasing trend of business owners as well as residence based services.

Social factors: Social fads in the economy show that consumers are seeking ease in addition to appealing rates. Market research shows how the consumer for Hong Kongs Financial Crisis 1997 98 does not have recognition about locating services which can offer a combination of convenience and also inexpensive.

Technological factors: Technology plays an important role in Hong Kongs Financial Crisis 1997 98's organisation approach particularly as the organization is piloting Modern technology centers which would use innovation sales as well as assistance in the type of memory upgrades, outer installments. (Recap of INSECT in appendix 2).

OB Issues as well as Effects.

A number of underlying Organizational Habits issues can be seen in Hong Kongs Financial Crisis 1997 98's case as highlighted in this section.

Worries concerning social adjustment: There is uneasiness concerning a social modification that would take place when Todd Krasnow leaves from his position as the Executive Vice President of Marketing with most of the employee already showing discontent over this possible move. This predicted modification has actually produced tension in the work environment which has been combined with the past anxiety of preparing the company for a prospective merger with House Deport.
Pest Analysis
Stressful Job Atmosphere for Newcomers: There is scarcity of employees that can match the demanding atmosphere of a hectic organization. Not only does this lead to problem in discovering the ideal people, it places stress and anxiety on new hires as can not endure the rate and also stress that the organization expects them to birth.

Twin Reporting Lines: Newbies locate this organizational society cumbersome and also hard to manage particularly as populated line connections are indicated to be weaker generally and also objective setup as well as performance assessment is still done by the solid line supervisor. This indicates that newbies could lose quality about their corresponding duties and goals particularly as dotted line coverage does not keep them in direct communication with the solid line supervisors.

Resentment From Cross Departmental Hiring: Krasnow's decision to make Lewis his follower rather than Bridget Coles although it had been speculated that the latter would certainly take Krasnow's placement came as a strike to her spirits. Lewis might have been capable and appropriate for the job but the fact that Kransnow's departure would make Coles a straight report to Lewis might have been the factor for Coles' resignation from services.

Worry & Task Instability: Concern and also insecurity can be identified as 2 major concerns that Lewis would certainly be managing particularly as the merger has actually now be terminated and 2 elderly executives of the advertising and marketing division would certainly be leaving. The whole responsibility of the division would be dropping on Lewis's shoulders who would not just supervise of brining regarding a cultural change however would certainly likewise need to prove herself in her brand-new duty.

Inappropriate Monitoring Style of Leader: Lewis's management design as well as its conflict with the advertising and marketing division's role can additionally be seen as an OB challenge especially as she has actually been used to managing issues in the procedures division where workers are educated to concentrate on processes as well as obtain them. The advertising and marketing division on the other hand can be viewed as a group of individuals that are made use of to being nurtured by Krasnow who focused more on outcome than processes.

Interdepartmental Arguments: Interdepartmental disagreements in between three divisions, marketing, merchandizing as well as procedures specifically over the allocation of the marketing mix can be determined as one more OB concern. The advertising and marketing division does not share the same vision as the various other two departments regarding the aloocation of the marketing mix twoards promos and advertsing, the merchandizing and operations divisions do not concur over the marketing mix allotment amongst one another either.

Fragmentation in Advertising Division: Fragmentation between the advertising and marketing departments can be recognized as another OB problem which could need further focus. The fact that the advertising and marketing sections in the advertising department are disconnected is protecting against both divisions from gaining from each various other's experience and also experience. Combination of marketing with retailing and also operations would come to be harder if the marketing department itself is degenerated which can be one more prospective OB worry.

Hong Kongs Financial Crisis 1997 98 Analysis

Various theories have been used to describe the scenarios to get additional clearness regarding the scenario at hand.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Theory X, a lot of managers believe that juniors are easy as well as lazy, have little ambition as well as stand up to adjustment. The difficult version of this concept stressed coercion, tight controls, dangers and punishments. Gradually it generates reduced efficiency, refined sabotage as well as rivalry (Offer, 2003). The scenario at Hong Kongs Financial Crisis 1997 98 is not completely complying with Concept X, it can be seen that new hires are locating this environment instead stressful which might at some point lead to a better disposition of the management towards Concept X. Based on McGregor's advocated sight, which he called Concept Y, the crucial task of the management is to prepare business conditions to ensure that people can accomplish their own goals best by routing their initiatives towards business incentives. If individuals discover no satisfaction in their work, the administration would certainly have little option however to rely upon concept X and also exterior control (Deal, 2003). Even while assessing Lewis's management design, concept X may have been suitable in the procedures department to some extent however the Advertising and marketing department would require reliance on Concept Y so as to get the creativity and also originality from the teams.

Tuckman's Team effort Theory: As for Lewis's issue about bringing consistency in between the marketing and advertising department is concerned, this would at first bring about clash as discussed by Bruce Tuckman in his 'Teamwork Concept'. (Tuckman, 1965). Based on Tuckman's concept shown in appendix 3, during the preliminary stage of team development, people might not bond, as they are active locating their area in the group. By incorporating the marketing and advertising department's work, there might coincide preliminary separate which could bring about the 2nd stage of 'storming' where the groups test each other. Nonetheless, it is just during the third phase or 'norming' when they would certainly collaborate to share concepts prior to the group can bring about harmony in the fourth stage 'performing'.

When individuals are offered with change, they enter stage one as well as so there might be emotions like despair, unpredictability, frustration, rage, anxiety, denial and disorientation.The situation at the advertising and marketing department of Hong Kongs Financial Crisis 1997 98 is similar so Lewis can obtain comfortable with the idea that it is not extraordinary actions. It is throughout this phase that Lewis will certainly have to provide guidance to the division so that they can locate a feeling of direction. It can be seen exactly how Krasnow has currently made this transition less complicated by making Lewis obtain included in the division a year before his real separation.
Vrio Analysis
Abraham Maslow in his Concept of 'Needs Hierarchy' (appendix 5) has talks about the significance of 'safety and security requires as being a lower level need of a human for setting off inspiration. As seen in the pyramid shared in appendix 3, we can see just how 'the requirement to really feel protected and also out of danger' is at the 2nd degree of requirements. Prior to a worker can be made to create psychologically, he requires to have his 'Physiological 'and also 'Safety and security' requires met.

SWOT Analysis for Hong Kongs Financial Crisis 1997 98 Case Study

Ramification of Analysis.

The OB analysis has looked at numerous concepts to understand just how to handle the present situation available. The following 3 choices have actually been suggested to aid Lewis manage the organizational challenges in the marketing department. Each of these choices has actually been recommended for alleviating the transition needed to bring the advertising and marketing department in accordance with the demands of the marketplace and for making the cultural change that would certainly follow as soon as the existing leader leaves.

Assimilation of advertising and marketing functions. Dividing Adverting and Production features. Assimilation of Marketing with Workflow.

Assessment of Alternatives.

Assimilation of Advertising And Marketing & Advertising Functions: The in-house marketing firm of Hong Kongs Financial Crisis 1997 98 is currently strength for the organization in terms of saving up on expenses connected to marketing and also promotion. Since no new recruitment has actually been done after Bridget Cole's departure with the reporting line being directly designated to Krasnow for the marketing function, this is a beneficial chance for incorporating the advertising and marketing features. Judith Shapiro that has actually earlier been talked to by Lewis throughout the earlier merger days has knowledge in business-to-business advertising along with agency as well as retail advertising experience. Once Krasnow leaves, Lewis can hire Shapiro as an EVP for advertising and marketing to take care of both marketing and advertising functions.

The benefit of this approach is that it will integrate the two features while lowering the need for working with an additional source for marketing. Lewis would be heading the marketing division as well as in any kind of case her replacement would be needed for the present duty that she is executing. The drawback of this option is that exterior hiring might produce bitterness from inner employees that may be looking at the setting of EVP after Lewis takes control of Krasnow's setting.

Separating Adverting and also Manufacturing: Given the competitive stress and also high quality work required from the advertising and marketing firm, it is suggested that Lewis should permit the production unit to be a separate feature from the marketing unit. Since a lot of advertising firms had these two functions as different units, it makes even more feeling to comply with the standard.

Assimilation of Marketing with Operations: Because Lewis is currently taking care of the marketing and also operations divisions concurrently; it makes feeling to integrate the 2 functions considering that she has actually been effectively taking treatment of both ends. The truth that Lewis has to adjust her monitoring design for the marketing department suggests that these two departments would be culturally diverse.


An examination of the 3 choices suggests that integration of advertising and marketing and also operations would certainly not be a viable move due to the vast differences in between both divisions although that presently Lewis is dealing with both. While splitting up of the production function might have been a desirable relocation for the marketing division, the truth that it would indicate putting a third feature under Lewis's wing indicates this must be avoided also. The integration of the advertising and marketing department is the best alternative in regards to getting the optimum arise from the division. An activity prepare for this choice is discussed below.

Activity Plan.
Lewis will take over the role of EVP Marketing after Krasnow leaves.

Marketing and advertising functions would certainly be combined.

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

Production feature will continue to be component of advertising and marketing under advertising and marketing feature.

Lewis will certainly divide herself from procedures.

A democratic management style with employee empowerment will be used in advertising department.

Open up door plan and also focus on cross departmental communication will be aimed at eliminating discord.

Backup strategy.

If the assimilation does not work out as prepared, a contingency plan would follow which would certainly separate the manufacturing function from the advertising feature to lower the lots on the SVP of advertising and marketing. In case Judith Shapiro does not obtain employed, Lewis will certainly be heading the advertising department without an SVP. In that case the manufacturing feature will definitely be separated by positioning it under an SVP production.