Khosla Ventures Investing In Ethanol Case Study Solution


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Khosla Ventures Investing In Ethanol Case Study Solution

Background and Facts

Khosla Ventures Investing In Ethanol an office supplies retailer for small as well as moderate sized businesses has actually just recently been involved in preparing for a merging with its competitor Home Deport, which has actually impacted efficiency levels in departmentswith the elderly supervisor associated with legal complications put forth by the government Trade Payment. With the Advertising and marketing Head putting forward the information of his departure from the firm in one year, Jeannie Lewis, the current head of operations has actually been asked to take the role in the future. With challenges in the kind of a prospective social adjustment as well as reduced worker morale, the organization requires a total reengineering effort at the advertising and marketing department.

Issue Declaration
Porter's 5 Forces Analysis
The potential social adjustment at the advertising and marketing division of Khosla Ventures Investing In Ethanol is increasing unpredictability in the workplace leading to different difficulties for the Jeannie Lewis that would certainly be changing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant duty in impacting strategic decisions given that Stapes Inc. needed to desert its strategies of combining with Workplace Deport after the Federal Profession Payment's intervention while doing so. Offered the truth that the store has a global presence with branches in UK, USA, Canada and also Germany, political consider each of these countries might have the ability to impact performance or calculated goals. Federal Profession Payment's antitrust fit versus the merging occupied beneficial time of the organization's senior administration suggesting that 'political' factors can have major ramifications for a global service.

Economic Factors: Financial factors such as the appearance of local business in the global scenario suggest that Khosla Ventures Investing In Ethanol is growing in a setting where there is prospective development of companies. Along with this, truth that shop customers are mostly trying to find workplace materials for home offices suggests that the marketplace has an increasing trend of business owners and home organisations.

Social factors: Social trends in the economic climate reveal that customers are searching for benefit as well as appealing costs. Marketing research shows how the client for Khosla Ventures Investing In Ethanol lacks awareness about discovering solutions which can supply a combination of ease as well as affordable.

Technical factors: Modern technology plays an important role in Khosla Ventures Investing In Ethanol's service method specifically as the organization is piloting Technology facilities which would supply innovation sales and support in the form of memory upgrades, peripheral setups. (Recap of PEST in appendix 2).

OB Issues as well as Symptoms.

Several underlying Business Habits problems can be seen in Khosla Ventures Investing In Ethanol's case as highlighted in this area.

Concerns regarding cultural modification: There is uneasiness concerning a social change that would take place once Todd Krasnow leaves from his setting as the Exec Vice Head Of State of Advertising And Marketing with the majority of the personnel currently showing unhappiness over this potential move. This predicted change has produced tension in the work environment which has actually been paired with the previous stress of preparing the company for a prospective merger with House Deport.
Pest Analysis
Difficult Job Atmosphere for Newcomers: There is scarcity of personnel that can match the stressful environment of a hectic company. Not only does this bring about trouble in discovering the appropriate people, it puts stress and anxiety on brand-new hires as can not hold up against the speed and stress that the company expects them to bear.

Twin Coverage Lines: Beginners find this organizational society troublesome and tough to manage especially as populated line connections are suggested to be weaker as a whole and objective setup as well as efficiency analysis is still done by the strong line manager. This suggests that newcomers could shed clarity regarding their particular duties and goals specifically as dotted line reporting does not maintain them in direct interaction with the strong line managers.

Animosity From Cross Departmental Hiring: Krasnow's decision to make Lewis his follower instead of Bridget Coles although it had actually been guessed that the last would take Krasnow's placement came as a strike to her morale. Lewis might have been capable and ideal for the job yet the reality that Kransnow's separation would certainly make Coles a straight report to Lewis might have been the factor for Coles' resignation from services.

Fear & Task Insecurity: Concern as well as insecurity can be determined as 2 major issues that Lewis would certainly be handling specifically as the merging has actually now be terminated and 2 elderly execs of the advertising and marketing division would certainly be leaving. The whole responsibility of the department would be falling on Lewis's shoulders who would not simply be in charge of brining regarding a cultural change but would likewise have to prove herself in her brand-new duty.

Inappropriate Monitoring Style of Leader: Lewis's management design and its incompatibility with the advertising and marketing division's duty can likewise be viewed as an OB obstacle specifically as she has actually been made use of to taking care of problems in the operations division where workers are educated to concentrate on procedures as well as get them right. The advertising division on the other hand can be viewed as a group of people who are used to being supported by Krasnow who focused more on outcome than processes.

Interdepartmental Disputes: Interdepartmental differences between three divisions, marketing, merchandizing and also operations specifically over the allocation of the advertising mix can be recognized as an additional OB problem. The advertising division does not share the very same vision as the various other two departments pertaining to the aloocation of the advertising and marketing mix twoards promotions as well as advertsing, the merchandizing and operations divisions do not agree over the advertising mix appropriation amongst one an additional either.

Fragmentation in Advertising And Marketing Division: Fragmentation in between the marketing and advertising divisions can be identified as an additional OB issue which might require further interest. The truth that the marketing and advertising sections in the advertising division are separated is protecting against both departments from obtaining from each other's experience and also experience. Assimilation of marketing with retailing and also operations would come to be more difficult if the marketing division itself is disintegrated which can be one more potential OB worry.

Khosla Ventures Investing In Ethanol Analysis

Different concepts have been utilized to explain the situations to get additional clarity about the circumstance at hand.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, many supervisors think that juniors are passive and also careless, have little aspiration as well as withstand change. The difficult variation of this theory stressed coercion, limited controls, hazards as well as punishments. In time it produces low productivity, subtle sabotage as well as rivalry (Deal, 2003). The situation at Khosla Ventures Investing In Ethanol is not totally following Theory X, it can be seen that new hires are locating this environment instead stressful which might eventually lead to a greater disposition of the administration in the direction of Theory X. As per McGregor's promoted view, which he called Theory Y, the necessary job of the monitoring is to organize organizational problems to ensure that individuals can achieve their own goals best by guiding their initiatives in the direction of business benefits. If people discover no satisfaction in their job, the monitoring would certainly have little selection but to depend on theory X as well as exterior control (Deal, 2003). Even while analyzing Lewis's management style, theory X may have appropriated in the procedures department to some extent yet the Advertising department would need reliance on Theory Y in order to get the creative thinking as well as creativity from the teams.

Tuckman's Synergy Theory: As far as Lewis's concern about bringing harmony in between the advertising and marketing department is concerned, this would at first result in contrast as talked about by Bruce Tuckman in his 'Synergy Theory'. (Tuckman, 1965). Based on Tuckman's theory shown in appendix 3, during the first phase of team development, people may not bond, as they are hectic discovering their location in the group. By combining the advertising and marketing division's work, there may coincide first separate which could bring about the 2nd phase of 'storming' where the groups challenge one another. It is just during the third phase or 'norming' when they would come together to share concepts before the group can bring around synergy in the fourth phase 'performing'.

When people are offered with modification, they enter stage one as well as so there may be emotions like sadness, uncertainty, stress, anger, worry, rejection as well as disorientation.The situation at the marketing division of Khosla Ventures Investing In Ethanol is similar so Lewis can get comfy with the idea that it is not remarkable actions. It is during this stage that Lewis will have to provide advice to the division so that they can find a feeling of instructions. It can be seen exactly how Krasnow has actually already made this transition easier by making Lewis get included in the division a year prior to his actual separation.
Vrio Analysis
Abraham Maslow in his Concept of 'Needs Hierarchy' (appendix 5) has reviews the importance of 'security needs as being a lower degree demand of a human for activating inspiration. As seen in the pyramid shared in appendix 3, we can see just how 'the requirement to really feel safe and secure as well as out of threat' is at the second degree of requirements. Before an employee can be made to create psychologically, he needs to have his 'Physical 'as well as 'Safety and security' needs met.

SWOT Analysis for Khosla Ventures Investing In Ethanol Case Study

Effects of Analysis.

The OB analysis has actually checked out different concepts to recognize just how to cope with the present circumstance available. The following 3 alternatives have been recommended to aid Lewis take care of the organizational challenges in the marketing division. Each of these options has been suggested for reducing the change required to bring the marketing department in line with the demands of the market and also for making the social modification that would certainly comply with as soon as the present leader leaves.

Combination of marketing and advertising features. Separating Adverting and Manufacturing features. Combination of Advertising And Marketing with Operations.

Examination of Alternatives.

Combination of Marketing & Marketing Functions: The in-house advertising agency of Khosla Ventures Investing In Ethanol is already toughness for the company in terms of conserving up on expenses associated with marketing and promotion. Because no new recruitment has been done after Bridget Cole's departure with the reporting line being straight assigned to Krasnow for the advertising and marketing function, this is a favorable possibility for integrating the marketing and advertising features. Judith Shapiro that has actually earlier been spoken with by Lewis throughout the earlier merger days has proficiency in business-to-business advertising and marketing along with agency as well as retail marketing experience. Once Krasnow leaves, Lewis can employ Shapiro as an EVP for advertising to deal with both advertising and marketing functions.

The benefit of this technique is that it will incorporate the two features while minimizing the demand for hiring an extra resource for advertising. Lewis would be heading the advertising and marketing department and also in any type of case her replacement would be needed for the existing duty that she is performing. The disadvantage of this choice is that outside hiring might cause resentment from internal workers that might be looking at the placement of EVP after Lewis takes control of Krasnow's placement.

Separating Adverting and also Production: Given the affordable pressures and also high top quality job called for from the advertising agency, it is advised that Lewis should allow the production system to be a separate feature from the advertising unit. Considering that most advertising agencies had these 2 functions as different units, it makes more feeling to comply with the standard.

Assimilation of Advertising And Marketing with Operations: Because Lewis is currently dealing with the advertising and marketing and also procedures divisions all at once; it makes sense to incorporate both functions since she has been successfully dealing with both ends. The fact that both divisions already have significant distinctions over allotment of resources recommends that this combination may be able to bring about consistency especially as Lewis would be heading both ends.However there are numerous downsides of this action specifically as it would certainly place too much concern over Lewis's shoulders. The fact that Lewis needs to adjust her monitoring design for the marketing division suggests that these two divisions would be culturally varied. Lewis may not be able to use one type of leadership style to both divisions which can result in inadequacy in either one of the two functions.


An assessment of the three alternatives indicates that assimilation of advertising and marketing as well as procedures would certainly not be a viable move due to the vast differences in between both divisions although that presently Lewis is handling both. While splitting up of the production function may have been a favorable action for the advertising and marketing division, the truth that it would certainly suggest placing a 3rd feature under Lewis's wing suggests this ought to be avoided too. The integration of the advertising division is the best option in terms of obtaining the ideal results from the division. An action plan for this option is reviewed below.

Activity Plan.
Lewis will take control of the role of EVP Advertising and marketing after Krasnow leaves.

Marketing and advertising functions would be merged.

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

Manufacturing function will certainly continue to be part of advertising under marketing function.

Lewis will certainly divide herself from procedures.

An autonomous leadership style with staff member empowerment will certainly be utilized in marketing department.

Open door plan and also emphasis on cross departmental communication will be targeted at removing discord.

Contingency plan.

If the combination does not work out as planned, a backup strategy would follow which would certainly separate the production feature from the marketing function to reduce the lots on the SVP of marketing and advertising. In case Judith Shapiro does not get hired, Lewis will be heading the marketing department without an SVP. In that case the production feature will most definitely be separated by putting it under an SVP production.