Leasing Decision At Magnet Beauty Products Inc Case Study Solution


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Leasing Decision At Magnet Beauty Products Inc Case Study Help

Background and Facts

Leasing Decision At Magnet Beauty Products Inc a workplace supplies retailer for tiny and average sized companies has actually lately been involved in preparing for a merger with its competitor House Deport, which has actually affected performance degrees in departmentswith the senior supervisor involved in lawful issues presented by the government Trade Payment. With the Marketing Head advancing the news of his separation from the business in one year, Jeannie Lewis, the current head of operations has actually been asked to take the role in the near future. With challenges in the kind of a possible cultural modification and also low worker spirits, the company wants a complete reengineering initiative at the advertising department.

Trouble Declaration
Porter's 5 Forces Analysis
The prospective cultural modification at the advertising division of Leasing Decision At Magnet Beauty Products Inc is increasing uncertainty in the workplace leading to numerous challenges for the Jeannie Lewis who would certainly be replacing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a major role in influencing strategic choices because Stapes Inc. had to desert its plans of combining with Office Deport after the Federal Trade Commission's intervention in the process. Offered the truth that the shop has a worldwide presence with branches in UK, U.S.A., Canada and also Germany, political consider each of these countries may be able to affect efficiency or strategic goals. Federal Profession Payment's antitrust suit versus the merger took up important time of the company's senior administration suggesting that 'political' factors can have major ramifications for an international company.

Economic Factors: Financial factors such as the development of small businesses in the worldwide situation suggest that Leasing Decision At Magnet Beauty Products Inc is prospering in an atmosphere where there is possible growth of organisations. Fact that shop consumers are mainly looking for workplace products for home workplaces suggests that the market has an increasing trend of entrepreneurs and also house based businesses.

Social factors: Social trends in the economic situation show that consumers are searching for comfort along with attractive prices. Market research demonstrates how the customer for Leasing Decision At Magnet Beauty Products Inc lacks understanding regarding finding services which can supply a mix of comfort and affordable.

Technical factors: Modern technology plays an important duty in Leasing Decision At Magnet Beauty Products Inc's company technique especially as the organization is piloting Technology centers which would supply modern technology sales as well as assistance in the type of memory upgrades, peripheral installments. (Summary of INSECT in appendix 2).

OB Issues and also Symptoms.

Several underlying Organizational Actions issues can be seen in Leasing Decision At Magnet Beauty Products Inc's case as highlighted in this area.

Worries about social change: There is concern regarding a cultural adjustment that would take place as soon as Todd Krasnow leaves from his position as the Executive Vice Head Of State of Advertising with most of the staff members currently showing discontent over this potential action. This anticipated adjustment has produced tension in the office which has actually been combined with the past anxiety of preparing the company for a potential merging with Home Deport.
Pest Analysis
Difficult Job Environment for Newcomers: There is shortage of employees that can match the demanding atmosphere of a fast-paced company. Not only does this result in trouble in finding the ideal people, it places stress on new hires as can not hold up against the pace as well as stress that the company anticipates them to bear.

Twin Coverage Lines: Newbies find this organizational society difficult and hard to deal with specifically as populated line partnerships are indicated to be weaker in general and unbiased setting and also performance examination is still done by the solid line supervisor. This suggests that newcomers can lose quality concerning their particular functions and also purposes specifically as dotted line reporting does not keep them in direct communication with the strong line managers.

Bitterness From Cross Departmental Hiring: Krasnow's decision to make Lewis his successor instead of Bridget Coles although it had actually been hypothesized that the last would certainly take Krasnow's placement came as a blow to her spirits. Lewis may have been qualified and appropriate for the job yet the reality that Kransnow's separation would make Coles a direct record to Lewis might have been the factor for Coles' resignation from solutions.

Fear & Task Instability: Concern and also insecurity can be determined as two significant problems that Lewis would be taking care of specifically as the merging has currently be cancelled and two elderly executives of the advertising division would certainly be leaving. The entire duty of the department would be dropping on Lewis's shoulders who would certainly not just be in charge of brining concerning a social adjustment but would additionally need to confirm herself in her new role.

Incompatible Monitoring Design of Leader: Lewis's administration style as well as its conflict with the advertising and marketing department's role can likewise be seen as an OB obstacle especially as she has been utilized to managing concerns in the procedures division where personnel are instructed to concentrate on procedures and obtain them. The advertising division on the other hand can be viewed as a group of individuals that are made use of to being supported by Krasnow who focused extra on output than processes.

Interdepartmental Disagreements: Interdepartmental disagreements in between three divisions, advertising and marketing, merchandizing and operations respectively over the allowance of the advertising mix can be identified as one more OB concern. The advertising department does not share the exact same vision as the other 2 divisions relating to the aloocation of the advertising mix twoards promos and also advertsing, the merchandizing and also operations departments do not concur over the advertising mix allocation amongst one an additional either.

Disintegration in Advertising Division: Fragmentation between the advertising and marketing divisions can be determined as one more OB concern which could require more attention. The truth that the marketing and advertising sections in the marketing department are separated is preventing both divisions from gaining from each other's experience and proficiency. Integration of advertising and marketing with retailing and operations would certainly become harder if the marketing division itself is broken down which can be another possible OB worry.

Leasing Decision At Magnet Beauty Products Inc Analysis

Numerous theories have actually been utilized to discuss the circumstances to obtain more clearness concerning the circumstance handy.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, most managers believe that juniors are passive as well as careless, have little ambition and stand up to adjustment. The tough version of this theory stressed browbeating, limited controls, risks as well as penalties. Gradually it generates reduced efficiency, subtle sabotage and rivalry (Bargain, 2003). Although the situation at Leasing Decision At Magnet Beauty Products Inc is not totally following Concept X, it can be seen that brand-new hires are finding this setting instead stressful which might eventually lead to a higher disposition of the management towards Concept X. As per McGregor's advocated view, which he called Theory Y, the essential task of the monitoring is to set up business problems to make sure that individuals can accomplish their very own objectives best by directing their efforts towards business rewards. If individuals find no satisfaction in their work, the administration would have little option yet to rely on theory X and also external control (Offer, 2003). Also while assessing Lewis's administration design, concept X might have been suitable in the procedures division somewhat yet the Advertising and marketing department would need dependence on Concept Y to get the creative thinking and creativity from the teams.

Tuckman's Team effort Theory: As far as Lewis's problem about bringing consistency between the advertising and marketing as well as advertising division is concerned, this would at first lead to contrast as discussed by Bruce Tuckman in his 'Synergy Concept'. By combining the marketing as well as advertising division's job, there might be the same initial detach which might lead to the 2nd phase of 'storming' where the teams challenge one another.

Bridges' Shift Version: Based On William Bridge's concept (appendix 4), individuals are fairly awkward with modification, which is evident by the scenario at Leasing Decision At Magnet Beauty Products Inc The scenario can be seen as a regular program of life if is examined according to Bridge's concept where he clarifies that people experience 3 stages of transition when they experience modification. 'End, losing as well as Releasing', The Neutral Zone and also 'The New Beginning' (Bridges, 2004). When individuals are presented with change, they enter stage one and so there might be feelings like despair, unpredictability, aggravation, anger, anxiety, rejection as well as disorientation.The circumstance at the advertising and marketing department of Leasing Decision At Magnet Beauty Products Inc is comparable so Lewis can get comfy with the concept that it is not phenomenal behavior. In the second stage, there might be a requirement to bridge the gap in between the new and also old culture so Lewis might need to encounter this experience when Krasnow leaves. There might be low spirits and reduced performance at this stage which must not be taken as a problem. It is during this stage that Lewis will have to give assistance to the department to make sure that they can find a sense of direction. It can be seen exactly how Krasnow has actually already made this transition much easier by making Lewis get involved in the department a year prior to his real separation. According to Bridges' Model, stage 3 will certainly bring about visibility to discovering, High energy as well as dedication as people will accept the adjustment (Bridges, 2004).
Vrio Analysis
Abraham Maslow in his Concept of 'Needs Hierarchy' (appendix 5) has talks about the significance of 'safety needs as being a lower level demand of a human for causing motivation. As seen in the pyramid shared in appendix 3, we can see exactly how 'the requirement to really feel safe and out of danger' is at the 2nd degree of demands. Prior to a staff member can be made to establish psychologically, he requires to have his 'Physical 'as well as 'Safety' requires met.

SWOT Analysis for Leasing Decision At Magnet Beauty Products Inc Case Study

Implication of Analysis.

The OB analysis has looked at different theories to understand exactly how to handle the existing circumstance at hand. The adhering to 3 options have been proposed to help Lewis handle the business obstacles in the marketing division. Each of these options has actually been suggested for alleviating the shift needed to bring the advertising division in accordance with the needs of the marketplace and for making the cultural modification that would certainly adhere to as soon as the current leader leaves.

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

Examination of Alternatives.

Integration of Advertising & Advertising Functions: The internal advertising and marketing agency of Leasing Decision At Magnet Beauty Products Inc is already toughness for the company in regards to conserving up on expenses related to marketing and promotion. Given that no brand-new employment has actually been done after Bridget Cole's separation with the coverage line being straight assigned to Krasnow for the advertising and marketing function, this is a beneficial opportunity for integrating the marketing and advertising functions. Judith Shapiro who has actually earlier been interviewed by Lewis during the earlier merging days has proficiency in business-to-business marketing together with firm and also retail advertising and marketing experience. As soon as Krasnow leaves, Lewis can employ Shapiro as an EVP for marketing to manage both advertising and marketing functions.

The benefit of this approach is that it will incorporate the two features while lowering the demand for employing an extra source for advertising and marketing. Lewis would be heading the advertising division and also in any case her substitute would certainly be required for the current role that she is carrying out. The downside of this option is that external hiring may produce resentment from inner employees who may be considering the setting of EVP after Lewis takes control of Krasnow's placement.

Separating Adverting as well as Manufacturing: Offered the competitive pressures as well as high quality work called for from the ad agency, it is recommended that Lewis should enable the production system to be a different function from the advertising and marketing device. Considering that many advertising agencies had these two features as different units, it makes even more feeling to comply with the norm. In addition to this, both functions may be able to concentrate on their core turns on more efficiently. The drawback of this approach would certainly be that extra costs would have to be borne for setting up separate production functions. A production head may have to be worked with which could boost expenses for the organization.

Combination of Advertising And Marketing with Workflows: Since Lewis is currently dealing with the advertising and marketing and also operations divisions simultaneously; it makes sense to integrate the two functions considering that she has actually been effectively caring for both ends. The reality that the two divisions currently have significant distinctions over appropriation of sources suggests that this combination may be able to bring about consistency particularly as Lewis would be heading both ends.However there are numerous disadvantages of this relocation specifically as it would place way too much burden over Lewis's shoulders. The truth that Lewis needs to adjust her management design for the advertising division suggests that these 2 departments would certainly be culturally varied. Lewis might not be able to use one kind of leadership design to both divisions which can result in ineffectiveness in either one of the two functions.


An examination of the three options shows that integration of marketing and also procedures would certainly not be a practical move due to the huge distinctions in between the 2 divisions despite the fact that currently Lewis is managing both. While separation of the manufacturing function might have been a favorable action for the marketing division, the truth that it would mean positioning a third feature under Lewis's wing suggests this must be prevented.

Action Plan.
Lewis will take control of the role of EVP Advertising after Krasnow leaves.

Marketing and advertising features would certainly be combined.

Judith Shapiro will certainly be worked with to take Lewis's place as SVP of advertising and marketing.

Production function will certainly remain part of advertising under advertising feature.

Lewis will divide herself from procedures.

An autonomous management design with employee empowerment will certainly be used in marketing department.

Open up door policy and focus on cross department communication will be targeted at getting rid of discord.

Contingency plan.

If the assimilation does not work out as intended, a backup plan would comply with which would separate the production function from the advertising feature to decrease 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 department without an SVP. Because case the manufacturing feature will definitely be separated by placing it under an SVP manufacturing.