Lehman Brothers And The Securitization Of American Express Charge Card Receivables Case Study Analysis


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Lehman Brothers And The Securitization Of American Express Charge Card Receivables Case Study Analysis

Background and Facts

Lehman Brothers And The Securitization Of American Express Charge Card Receivables an office products store for small and also medium sized organisations has recently been involved in planning for a merging with its rival Residence Deport, which has influenced efficiency levels in departmentswith the senior manager associated with lawful complications put forth by the federal Trade Commission. With the Advertising and marketing Head putting forward the news of his separation from the firm in one year, Jeannie Lewis, the present head of procedures has been asked to take the duty in the future. With difficulties in the form of a prospective social modification and also reduced employee spirits, the company needs a complete reengineering effort at the marketing division.

Issue Statement
Porter's 5 Forces Analysis
The possible cultural change at the advertising division of Lehman Brothers And The Securitization Of American Express Charge Card Receivables is boosting unpredictability in the workplace causing different challenges for the Jeannie Lewis that would certainly be replacing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant duty in affecting tactical choices given that Stapes Inc. had to abandon its strategies of combining with Workplace Deport after the Federal Trade Compensation's treatment at the same time. Provided the truth that the store has a global visibility with branches in UK, U.S.A., Canada and Germany, political consider each of these countries might have the ability to influence performance or strategic goals. Federal Trade Compensation's antitrust suit against the merging occupied valuable time of the company's senior management suggesting that 'political' factors can have significant implications for a worldwide company.

Economic Factors: Financial factors such as the development of small companies in the global circumstance recommend that Lehman Brothers And The Securitization Of American Express Charge Card Receivables is prospering in an environment where there is possible development of services. Reality that store customers are mostly looking for office products for house workplaces suggests that the market has a rising fad of entrepreneurs and residence based organisations.

Social factors: Social patterns in the economy show that consumers are searching for comfort along with appealing costs. Market research shows how the customer for Lehman Brothers And The Securitization Of American Express Charge Card Receivables lacks understanding about finding solutions which can offer a mix of benefit and also affordable.

Technological factors: Technology plays a vital role in Lehman Brothers And The Securitization Of American Express Charge Card Receivables's service strategy particularly as the company is piloting Modern technology centers which would provide innovation sales and also support in the form of memory upgrades, peripheral setups. (Summary of INSECT in appendix 2).

OB Issues and also Manifestations.

Numerous underlying Business Actions concerns can be seen in Lehman Brothers And The Securitization Of American Express Charge Card Receivables's case as highlighted in this area.

Concerns about social modification: There is uneasiness concerning a social change that would take place as soon as Todd Krasnow leaves from his setting as the Exec Vice Head Of State of Advertising And Marketing with most of the employee currently showing unhappiness over this potential action. This expected adjustment has created tension in the office which has actually been coupled with the past tension of preparing the company for a prospective merger with Home Deport.
Pest Analysis
Stressful Work Setting for Newcomers: There is lack of workers that can match the demanding environment of a busy organization. Not only does this result in trouble in discovering the appropriate people, it places tension on new hires as can not withstand the rate as well as stress that the company expects them to birth.

Dual Reporting Lines: Novices find this business society cumbersome and tough to cope with particularly as populated line partnerships are suggested to be weak generally and also objective setup and also performance assessment is still done by the solid line manager. This indicates that newbies could shed quality about their corresponding functions and also goals specifically as populated line coverage does not maintain them in direct communication with the strong line managers.

Bitterness From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower rather than Bridget Coles even though it had actually been speculated that the last would take Krasnow's position came as an impact to her spirits. Lewis may have been qualified and suitable for the task yet the fact that Kransnow's separation would make Coles a direct report to Lewis may have been the reason for Coles' resignation from solutions.

Anxiety & Work Instability: Fear and also insecurity can be recognized as two significant concerns that Lewis would be managing specifically as the merger has now be terminated as well as 2 elderly execs of the marketing department would be leaving. The entire obligation of the division would be dropping on Lewis's shoulders who would not simply supervise of brining concerning a social adjustment but would also have to verify herself in her new duty.

Incompatible Monitoring Style of Leader: Lewis's management style as well as its incompatibility with the marketing department's function can also be viewed as an OB obstacle specifically as she has been utilized to handling concerns in the operations department where workers are taught to concentrate on procedures as well as get them right. The marketing department on the other hand can be seen as a team of individuals that are utilized to being supported by Krasnow who concentrated much more on result than processes.

Interdepartmental Arguments: Interdepartmental disagreements between 3 divisions, advertising, merchandizing and also operations specifically over the appropriation of the advertising mix can be determined as another OB concern. The advertising and marketing division does not share the exact same vision as the other 2 divisions regarding the aloocation of the advertising mix twoards promotions and also advertsing, the merchandizing as well as operations departments do not agree over the advertising mix allotment among one another either.

Disintegration in Marketing Department: Fragmentation in between the marketing and advertising departments can be determined as another OB concern which might need further interest. The truth that the marketing and advertising sections in the advertising and marketing department are separated is protecting against both departments from gaining from each other's experience and also proficiency. Integration of marketing with merchandising as well as operations would come to be harder if the advertising department itself is degenerated which can be another prospective OB worry.

Lehman Brothers And The Securitization Of American Express Charge Card Receivables Analysis

Numerous concepts have actually been made use of to clarify the circumstances to obtain further clearness about the situation at hand.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Concept X, most supervisors think that juniors are passive and careless, have little ambition and also resist modification. The difficult variation of this theory highlighted threat, tight controls, hazards as well as penalties. With time it produces reduced efficiency, refined sabotage and also rivalry (Offer, 2003). Although the circumstance at Lehman Brothers And The Securitization Of American Express Charge Card Receivables is not entirely adhering to Theory X, it can be seen that new hires are discovering this environment rather stressful which might ultimately cause a greater inclination of the administration towards Concept X. As per McGregor's promoted view, which he called Concept Y, the essential task of the management is to arrange business problems so that people can achieve their very own objectives best by directing their efforts in the direction of business benefits. If individuals locate no fulfillment in their work, the monitoring would certainly have little choice but to rely upon theory X as well as exterior control (Bargain, 2003). Also while assessing Lewis's monitoring design, theory X might have appropriated in the operations division somewhat but the Marketing division would call for dependence on Theory Y to get the creative thinking as well as creativity from the teams.

Tuckman's Synergy Concept: As much as Lewis's concern regarding bringing consistency between the advertising and also marketing department is concerned, this would at first lead to contrast as discussed by Bruce Tuckman in his 'Team effort Theory'. By combining the marketing as well as marketing division's job, there might be the very same initial detach which might lead to the 2nd phase of 'storming' where the groups challenge one an additional.

Bridges' Shift Version: According To William Bridge's theory (appendix 4), people are fairly uneasy with modification, which is noticeable by the circumstance at Lehman Brothers And The Securitization Of American Express Charge Card Receivables The scenario can be seen as a regular training course of life if is researched as per Bridge's theory where he discusses that people undergo three phases of shift when they experience adjustment. 'Closing, shedding as well as Letting go', The Neutral Zone as well as 'The New Starting' (Bridges, 2004). When people exist with adjustment, they enter stage one and so there may be feelings like sadness, uncertainty, irritation, anger, anxiety, rejection and also disorientation.The scenario at the marketing department of Lehman Brothers And The Securitization Of American Express Charge Card Receivables is similar so Lewis can get comfortable with the concept that it is not phenomenal habits. In the 2nd stage, there might be a demand to link the gap between the new as well as old culture so Lewis might need to encounter this ordeal once Krasnow leaves. There might be low spirits as well as reduced efficiency at this phase which should not be taken as a problem. It is throughout this stage that Lewis will certainly have to give support to the division so that they can discover a sense of direction. It can be seen how Krasnow has actually already made this transition less complicated by making Lewis get associated with the division a year before his real departure. According to Bridges' Model, stage three will produce openness to understanding, High energy and dedication as individuals will certainly embrace the modification (Bridges, 2004).
Vrio Analysis
Maslow's Requirement pecking order: The OB issue related to insecurity at the office has actually been triggered firstly by the adjustment in management and second of all by the reality that the merging will certainly no longer be started. Abraham Maslow in his Concept of 'Needs Hierarchy' (appendix 5) has talks about the relevance of 'safety and security requires as being a reduced level need of a human for activating inspiration. As seen in the pyramid shared in appendix 3, we can see exactly how 'the demand to feel secure and also out of danger' is at the 2nd level of demands. Prior to an employee can be made to develop emotionally, he needs to have his 'Physical 'as well as 'Safety' requires satisfied. This shows that unless the employees are made to feel safe regarding their existing work status in Lehman Brothers And The Securitization Of American Express Charge Card Receivables they may not reach 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Lehman Brothers And The Securitization Of American Express Charge Card Receivables Case Study

Effects of Analysis.

The OB analysis has actually checked out numerous theories to recognize how to cope with the existing scenario available. The following 3 choices have been proposed to assist Lewis manage the organizational difficulties in the advertising and marketing department. Each of these choices has actually been proposed for relieving the transition required to bring the advertising division in accordance with the needs of the market and for making the social adjustment that would comply with when the current leader leaves.

Combination of marketing and advertising features. Separating Adverting and also Manufacturing features. Assimilation of Advertising with Operations.

Examination of Alternatives.

Judith Shapiro who has actually earlier been talked to by Lewis during the earlier merger days has expertise in business-to-business marketing along with company and also retail advertising experience. Once Krasnow leaves, Lewis can work with Shapiro as an EVP for advertising to handle both marketing as well as advertising features.

The advantage of this strategy is that it will integrate the two functions while reducing the demand for working with an added source for marketing. In addition to this, Lewis would be heading the advertising division as well as regardless her substitute would be required for the present duty that she is doing. The negative aspect of this option is that exterior hiring might produce animosity from inner employees who might be eying the placement of EVP after Lewis takes control of Krasnow's position.

Dividing Adverting as well as Production: Given the competitive stress as well as high quality work needed from the marketing firm, it is recommended that Lewis ought to allow the production device to be a different function from the advertising and marketing system. Because a lot of marketing agencies had these 2 features as separate devices, it makes more feeling to follow the standard.

Assimilation of Advertising with Operations: Because Lewis is currently taking care of the advertising and operations departments simultaneously; it makes sense to integrate the 2 features because she has actually been effectively taking treatment of both ends. The truth that Lewis has to adapt her administration style for the advertising division recommends that these two departments would be culturally diverse.


An analysis of the 3 options shows that integration of advertising and marketing and also operations would certainly not be a practical action due to the substantial distinctions in between the two divisions in spite of the reality that currently Lewis is handling both. While separation of the manufacturing function may have been a favorable step for the marketing division, the fact that it would certainly imply placing a 3rd function under Lewis's wing means this need to be stayed clear of.

Activity Strategy.
Lewis will certainly take over the function of EVP Marketing after Krasnow leaves.

Marketing and advertising functions would certainly be merged.

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

Production feature will stay component of advertising under marketing feature.

Lewis will certainly divide herself from procedures.

A democratic leadership style with worker empowerment will be made use of in marketing department.

Open door policy and also focus on cross department communication will certainly be targeted at eliminating disharmony.

Contingency plan.

If the combination does not exercise as prepared, a contingency plan would certainly comply with which would certainly divide the production feature from the advertising feature to decrease the tons on the SVP of marketing and advertising. In case Judith Shapiro does not get employed, Lewis will certainly be heading the advertising and marketing division without an SVP. Because case the production function will most definitely be separated by placing it under an SVP manufacturing.