Indonesia Attracting Foreign Investment Case Study Analysis


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Background and Facts

Indonesia Attracting Foreign Investment an office materials store for tiny and moderate sized businesses has recently been associated with preparing for a merger with its rival Home Deport, which has affected performance levels in departmentswith the senior manager involved in lawful complications put forth by the government Trade Payment. With the Advertising Head putting forward the news of his separation from the company in one year, Jeannie Lewis, the existing head of procedures has been asked to take the function in the near future. With challenges in the type of a prospective social modification as well as low employee spirits, the organization is in need of a full reengineering effort at the advertising and marketing division.

Trouble Declaration
Porter's 5 Forces Analysis
The potential social modification at the advertising department of Indonesia Attracting Foreign Investment is enhancing uncertainty in the working environment resulting in different obstacles for the Jeannie Lewis that would be changing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a major duty in affecting critical choices because Stapes Inc. had to abandon its strategies of combining with Workplace Deport after the Federal Trade Compensation's intervention while doing so. Provided the truth that the shop has a global existence with branches in UK, UNITED STATES, Canada and Germany, political factors in each of these countries might have the ability to affect performance or tactical objectives. Federal Profession Commission's antitrust match versus the merging took up beneficial time of the organization's elderly administration suggesting that 'political' factors can have serious ramifications for a worldwide organisation.

Economic Factors: Financial factors such as the appearance of local business in the international scenario recommend that Indonesia Attracting Foreign Investment is flourishing in a setting where there is possible development of services. Reality that shop consumers are primarily looking for workplace supplies for home workplaces recommends that the market has an increasing trend of entrepreneurs and house based services.

Social factors: Social fads in the economy reveal that consumers are seeking comfort along with attractive prices. Marketing research shows how the client for Indonesia Attracting Foreign Investment lacks understanding regarding locating solutions which can provide a combination of ease as well as low costs.

Technical factors: Technology plays an important role in Indonesia Attracting Foreign Investment's service strategy especially as the company is piloting Modern technology centers which would certainly provide modern technology sales as well as assistance in the type of memory upgrades, peripheral setups. (Recap of BUG in appendix 2).

OB Issues and Manifestations.

A number of underlying Organizational Actions issues can be seen in Indonesia Attracting Foreign Investment's case as highlighted in this section.

Uneasiness regarding cultural change: There is concern regarding a social change that would occur once Todd Krasnow leaves from his setting as the Exec Vice Head Of State of Advertising with a lot of the staff members already revealing discontent over this prospective move. This anticipated modification has developed stress in the workplace which has been coupled with the past stress of preparing the company for a prospective merger with Residence Deport.
Pest Analysis
Demanding Work Setting for Newcomers: There is lack of personnel that can match the demanding atmosphere of a hectic company. Not only does this lead to problem in locating the appropriate people, it places stress on brand-new hires as can not withstand the speed and also stress that the organization anticipates them to bear.

Double Reporting Lines: Novices find this organizational culture troublesome and challenging to cope with especially as populated line partnerships are indicated to be weak generally as well as unbiased setup and performance assessment is still done by the strong line supervisor. This implies that novices could shed clarity concerning their particular functions and purposes especially as populated line reporting does not keep them in direct interaction with the strong line supervisors.

Animosity From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower rather than Bridget Coles despite the fact that it had actually been speculated that the latter would take Krasnow's position came as a strike to her morale. Lewis may have been capable and also suitable for the task yet the truth that Kransnow's separation would certainly make Coles a direct report to Lewis may have been the factor for Coles' resignation from solutions.

Fear & Task Insecurity: Concern as well as insecurity can be determined as two major problems that Lewis would be managing especially as the merging has actually now be cancelled as well as two senior executives of the advertising and marketing department would certainly be leaving. The whole obligation of the division would be dropping on Lewis's shoulders that would certainly not just be in charge of brining regarding a cultural adjustment however would also need to prove herself in her new duty.

Incompatible Administration Style of Leader: Lewis's monitoring style and its conflict with the advertising department's duty can likewise be seen as an OB obstacle particularly as she has actually been made use of to taking care of concerns in the operations division where workers are shown to focus on procedures and also obtain them right. The marketing division on the other hand can be viewed as a team of people that are used to being supported by Krasnow who concentrated extra on result than processes.

Interdepartmental Arguments: Interdepartmental disputes in between 3 divisions, advertising, merchandizing and also procedures respectively over the allocation of the marketing mix can be recognized as an additional OB worry. The advertising department does not share the very same vision as the various other two divisions concerning the aloocation of the advertising mix twoards promotions as well as advertsing, the merchandizing as well as procedures divisions do not agree over the advertising mix allowance among one another either.

Disintegration in Advertising Department: Disintegration in between the marketing and advertising divisions can be recognized as an additional OB concern which might require further interest. The truth that the marketing and advertising areas in the advertising department are separated is stopping both departments from gaining from each various other's experience and also competence. Assimilation of advertising with merchandising and also procedures would certainly come to be more difficult if the marketing division itself is broken down which can be an additional possible OB issue.

Indonesia Attracting Foreign Investment Analysis

Numerous concepts have been utilized to clarify the circumstances to get more quality concerning the situation at hand.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Concept X, most managers believe that juniors are passive as well as lazy, have little ambition and also resist adjustment. The tough variation of this concept highlighted browbeating, limited controls, dangers and also penalties. In time it produces low productivity, refined sabotage as well as rivalry (Offer, 2003). Although the scenario at Indonesia Attracting Foreign Investment is not completely complying with Concept X, it can be seen that new hires are finding this environment instead stressful which might eventually result in a better disposition of the administration towards Concept X. According to McGregor's advocated sight, which he called Concept Y, the crucial task of the monitoring is to arrange business conditions to ensure that individuals can accomplish their own goals best by directing their efforts towards organizational benefits. If individuals locate no satisfaction in their work, the management would have little choice yet to depend on concept X and exterior control (Bargain, 2003). Even while evaluating Lewis's administration style, concept X may have appropriated in the operations division somewhat however the Advertising division would need reliance on Concept Y to get the creative thinking and originality from the groups.

Tuckman's Synergy Theory: As far as Lewis's worry regarding bringing consistency in between the marketing and marketing division is concerned, this would originally lead to clash as talked about by Bruce Tuckman in his 'Synergy Theory'. By incorporating the advertising as well as marketing department's job, there may be the exact same preliminary separate which can lead to the second stage of 'storming' where the groups challenge one another.

When individuals are offered with modification, they go into phase one as well as so there might be emotions like sadness, unpredictability, irritation, temper, worry, rejection and disorientation.The circumstance at the advertising and marketing division of Indonesia Attracting Foreign Investment is similar so Lewis can get comfortable with the suggestion that it is not remarkable habits. It is during this stage that Lewis will certainly have to give assistance to the division so that they can discover a feeling of direction. It can be seen how Krasnow has actually already made this change simpler by making Lewis obtain included in the division a year before his actual departure.
Vrio Analysis
Abraham Maslow in his Concept of 'Needs Power structure' (appendix 5) has goes over the relevance of 'safety and security needs as being a lower level demand of a human for activating inspiration. As seen in the pyramid shared in appendix 3, we can see exactly how 'the need to feel secure and also out of danger' is at the 2nd degree of needs. Before an employee can be made to establish psychologically, he needs to have his 'Physical 'as well as 'Safety' needs met.

SWOT Analysis for Indonesia Attracting Foreign Investment Case Study

Effects of Analysis.

The OB analysis has checked out various concepts to understand exactly how to deal with the current scenario at hand. The adhering to 3 options have actually been proposed to help Lewis handle the business obstacles in the advertising division. Each of these choices has actually been suggested for alleviating the shift required to bring the advertising department according to the needs of the marketplace as well as for making the social adjustment that would certainly adhere to when the existing leader leaves.

Combination of marketing and advertising functions. Separating Adverting and also Production features. Assimilation of Advertising And Marketing with Workflow.

Evaluation of Alternatives.

Integration of Advertising And Marketing & Advertising And Marketing Functions: The internal advertising and marketing company of Indonesia Attracting Foreign Investment is already strength for the company in terms of saving up on overheads connected to marketing and promo. Since no brand-new recruitment has been done after Bridget Cole's departure with the coverage line being straight appointed to Krasnow for the marketing function, this is a desirable opportunity for incorporating the marketing and advertising features. Judith Shapiro who has earlier been spoken with by Lewis throughout the earlier merger days has expertise in business-to-business marketing together with agency as well as retail advertising and marketing experience. As soon as Krasnow leaves, Lewis can employ Shapiro as an EVP for advertising and marketing to take care of both advertising and marketing functions.

The benefit of this strategy is that it will integrate the two functions while minimizing the demand for employing an additional resource for advertising and marketing. Lewis would be heading the advertising division and in any kind of case her replacement would certainly be required for the existing role that she is executing. The downside of this option is that outside hiring may cause resentment from interior workers that may be considering the position of EVP after Lewis takes over Krasnow's placement.

Separating Adverting and Manufacturing: Provided the competitive pressures and high quality job called for from the marketing firm, it is recommended that Lewis ought to permit the production device to be a different function from the advertising and marketing unit. Considering that many advertising and marketing agencies had these two features as separate units, it makes more sense to adhere to the norm.

Integration of Advertising And Marketing with Workflows: Considering that Lewis is already taking care of the advertising as well as operations departments at the same time; it makes feeling to incorporate the two features since she has been effectively taking treatment of both ends. The fact that Lewis has to adapt her management style for the advertising division suggests that these two divisions would be culturally varied.


An assessment of the three options shows that assimilation of advertising and marketing as well as procedures would not be a viable step due to the huge differences between the two departments despite the reality that currently Lewis is managing both. While separation of the production function might have been a favorable action for the advertising and marketing division, the truth that it would imply putting a third feature under Lewis's wing means this need to be stayed clear of.

Action Strategy.
Lewis will certainly take over the function of EVP Advertising after Krasnow leaves.

Marketing and advertising functions would certainly be merged.

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

Production function will stay part of advertising and marketing under advertising function.

Lewis will certainly separate herself from operations.

An autonomous management style with employee empowerment will be used in marketing division.

Open up door plan as well as emphasis on cross department communication will certainly be aimed at eliminating discord.

Backup plan.

If the integration does not exercise as intended, a contingency plan would adhere to which would separate the manufacturing function from the marketing function to reduce the load on the SVP of advertising and marketing. In case Judith Shapiro does not get worked with, Lewis will certainly be heading the advertising and marketing division without an SVP. Because case the manufacturing function will definitely be divided by placing it under an SVP production.