Menu

Lyondell Chemical Company Case Study Analysis

CASE STUDY

Home >> Harvard >> Lyondell Chemical Company >>

Lyondell Chemical Company Case Study Solution

Background and Facts

Lyondell Chemical Company a workplace materials store for little and moderate sized organisations has recently been involved in planning for a merger with its competitor Home Deport, which has affected performance degrees in departmentswith the elderly supervisor associated with lawful problems put forth by the government Profession Commission. With the Advertising Head advancing the information of his separation from the business in one year, Jeannie Lewis, the current head of procedures has actually been asked to take the role in the future. With challenges in the kind of a potential cultural adjustment and also reduced staff member spirits, the organization requires a full reengineering effort at the advertising and marketing department.

Problem Declaration
Porter's 5 Forces Analysis
The possible cultural adjustment at the advertising division of Lyondell Chemical Company is increasing unpredictability in the workplace causing numerous obstacles 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 function in affecting tactical choices since Stapes Inc. needed to abandon its strategies of combining with Workplace Deport after the Federal Trade Compensation's intervention in the process. Offered the fact that the store has a global presence with branches in UK, USA, Canada and also Germany, political consider each of these countries may have the ability to influence efficiency or tactical goals. Federal Profession Commission's antitrust suit against the merging took up useful time of the company's elderly management suggesting that 'political' factors can have serious ramifications for a worldwide company.

Economic Factors: Financial factors such as the emergence of small companies in the worldwide situation recommend that Lyondell Chemical Company is growing in an environment where there is potential development of organisations. Truth that shop customers are mostly looking for workplace supplies for home workplaces recommends that the market has an increasing fad of business owners as well as house based services.

Social factors: Social patterns in the economic climate show that clients are searching for benefit in addition to eye-catching prices. Market research demonstrates how the consumer for Lyondell Chemical Company does not have recognition regarding locating remedies which can offer a mix of comfort and also low costs.

Technological factors: Technology plays an important duty in Lyondell Chemical Company's business method specifically as the organization is piloting Innovation facilities which would use innovation sales as well as support in the type of memory upgrades, peripheral installments. (Recap of PEST in appendix 2).

OB Issues and Manifestations.

A number of underlying Business Actions concerns can be seen in Lyondell Chemical Company's case as highlighted in this area.

Concerns regarding cultural modification: There is uneasiness concerning a social modification that would certainly take place as soon as Todd Krasnow leaves from his setting as the Executive Vice Head Of State of Marketing with a lot of the employee already showing discontent over this prospective move. This expected adjustment has actually produced stress in the workplace which has actually been coupled with the previous stress and anxiety of preparing the firm for a prospective merging with Home Deport.
Pest Analysis
Difficult Work Setting for Newcomers: There is shortage of workers that can match the demanding atmosphere of a fast-paced company. Not just does this lead to problem in finding the best people, it places stress on new hires as can not hold up against the pace and pressure that the organization expects them to bear.

Dual Coverage Lines: Novices discover this business society cumbersome and challenging to handle particularly as dotted line connections are implied to be weak in general and also unbiased setting and performance examination is still done by the strong line manager. This indicates that newcomers can lose quality about their particular functions as well as objectives particularly as populated line coverage does not maintain them in direct interaction with the solid line supervisors.

Animosity From Cross Departmental Hiring: Krasnow's decision to make Lewis his successor instead of Bridget Coles although it had actually been hypothesized that the latter would take Krasnow's setting came as an impact to her morale. Lewis may have been capable as well as suitable for the job yet the truth that Kransnow's separation would make Coles a straight report to Lewis might have been the factor for Coles' resignation from services.

Concern & Work Instability: Worry as well as insecurity can be recognized as two significant problems that Lewis would be managing especially as the merging has actually currently be cancelled and two elderly executives of the marketing department would be leaving. The whole responsibility of the division would be dropping on Lewis's shoulders who would not simply supervise of brining regarding a cultural adjustment yet would certainly additionally need to confirm herself in her brand-new duty.

Inappropriate Administration Design of Leader: Lewis's monitoring design as well as its conflict with the advertising department's function can likewise be viewed as an OB challenge specifically as she has actually been utilized to taking care of concerns in the operations department where employees are instructed to focus on processes as well as get them right. The advertising department on the other hand can be viewed as a group of individuals that are used to being supported by Krasnow that focused a lot more on outcome than processes.

Interdepartmental Differences: Interdepartmental disputes in between three divisions, advertising and marketing, merchandizing as well as procedures respectively over the allowance of the advertising mix can be identified as another OB problem. The advertising and marketing division does not share the very same vision as the various other 2 divisions concerning the aloocation of the marketing mix twoards promos and also advertsing, the merchandizing as well as operations departments do not agree over the advertising and marketing mix allowance among one another either.

Fragmentation in Advertising Department: Disintegration between the advertising and marketing divisions can be determined as one more OB concern which can need additional focus. The reality that the marketing and advertising sections in the advertising and marketing division are detached is stopping both departments from acquiring from each various other's experience and competence. Integration of marketing with merchandising as well as operations would end up being harder if the advertising and marketing division itself is degenerated which can be another potential OB issue.

Lyondell Chemical Company Analysis

Various concepts have actually been used to clarify the circumstances to get additional clearness about the scenario available.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, most managers believe that staffs are easy as well as lazy, have little aspiration as well as resist change. The situation at Lyondell Chemical Company is not entirely following Concept X, it can be seen that new hires are finding this environment instead demanding which might ultimately lead to a higher disposition of the monitoring towards Concept X. Even while analyzing Lewis's administration design, theory X may have been ideal in the operations department to some level but the Marketing division would require dependence on Concept Y in order to get the creativity as well as creativity from the teams.

Tuckman's Teamwork Concept: As far as Lewis's problem about bringing consistency between the marketing and advertising division is concerned, this would originally result in contrast as talked about by Bruce Tuckman in his 'Team effort Concept'. (Tuckman, 1965). According to Tuckman's theory received appendix 3, throughout the preliminary stage of group development, people may not bond, as they are busy finding their area in the group. By integrating the marketing and advertising department's work, there might be the same initial separate which could lead to the second stage of 'storming' where the groups challenge each other. It is just during the third stage or 'norming' when they would come with each other to share concepts before the group can bring about synergy in the 4th phase 'executing'.

When people are offered with adjustment, they get in stage one and also so there may be emotions like unhappiness, unpredictability, irritation, temper, concern, rejection as well as disorientation.The situation at the advertising and marketing department of Lyondell Chemical Company is comparable so Lewis can get comfortable with the suggestion that it is not remarkable behavior. It is throughout this phase that Lewis will certainly have to provide guidance to the division so that they can find a sense of direction. It can be seen exactly how Krasnow has already made this change much easier by making Lewis obtain involved in the department a year before his actual departure.
Vrio Analysis
Maslow's Requirement pecking order: The OB problem pertaining to insecurity at the office has been set off firstly by the change in management and second of all by the truth that the merger will certainly no more be initiated. Abraham Maslow in his Concept of 'Demands Pecking order' (appendix 5) has discusses the value of 'security needs as being a lower level demand of a human for triggering motivation. As seen in the pyramid shared in appendix 3, we can see exactly how 'the need to really feel safe and secure as well as untouched' is at the 2nd level of needs. Prior to a staff member can be made to establish psychologically, he requires to have his 'Physical 'and also 'Safety and security' requires fulfilled. This suggests that unless the personnel are made to feel safe and secure concerning their present employment status in Lyondell Chemical Company they might not reach 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Lyondell Chemical Company Case Study



Ramification of Analysis.

The OB analysis has actually looked at different concepts to comprehend how to handle the present scenario available. The following 3 options have actually been recommended to aid Lewis manage the business obstacles in the marketing division. Each of these options has actually been recommended for reducing the change needed to bring the advertising and marketing division according to the requirements of the market as well as for making the social change that would certainly follow when the current leader leaves.

Assimilation of marketing and advertising functions. Separating Adverting and Manufacturing features. Assimilation of Advertising And Marketing with Workflow.

Examination of Alternatives.

Integration of Advertising And Marketing & Advertising And Marketing Functions: The internal marketing firm of Lyondell Chemical Company is already toughness for the organization in terms of saving up on overheads connected to advertising and marketing and also promo. Given that no new recruitment has actually been done after Bridget Cole's separation with the coverage line being straight assigned to Krasnow for the advertising and marketing feature, this is a beneficial possibility for incorporating the marketing and advertising functions. Judith Shapiro that has actually earlier been talked to by Lewis throughout the earlier merging days has competence in business-to-business advertising and marketing along with agency and also retail advertising experience. Once Krasnow leaves, Lewis can work with Shapiro as an EVP for advertising and marketing to handle both marketing and advertising features.

The advantage of this method is that it will certainly incorporate the two features while decreasing the requirement for hiring an added resource for advertising. Lewis would certainly be heading the advertising department and also in any kind of case her substitute would be required for the present role that she is doing. The downside of this alternative is that exterior hiring might bring about animosity from interior employees who may be considering the placement of EVP after Lewis takes over Krasnow's position.

Separating Adverting and Manufacturing: Provided the competitive stress and excellent quality job needed from the ad agency, it is recommended that Lewis ought to permit the production system to be a different feature from the advertising device. Since a lot of advertising agencies had these 2 features as different systems, it makes more sense to comply with the norm. Both features may be able to focus on their core turns on a lot more successfully. The negative aspect of this technique would certainly be that additional expenses would certainly have to be borne for establishing up different production functions. In addition to this, a production head may need to be employed which might enhance expenses for the organization.

Combination of Advertising with Workflows: Given that Lewis is currently taking care of the advertising as well as procedures departments all at once; it makes feeling to integrate the 2 features considering that she has actually been successfully taking treatment of both ends. The reality that Lewis has to adjust her monitoring design for the advertising department recommends that these two divisions would be culturally varied.

Recommendation.



An assessment of the three choices shows that integration of marketing as well as operations would not be a practical action due to the huge distinctions between the two departments despite the fact that currently Lewis is managing both. While splitting up of the manufacturing function might have been a beneficial relocation for the advertising and marketing division, the fact that it would suggest positioning a third function under Lewis's wing implies this ought to be stayed clear of. The integration of the advertising division is the very best choice in regards to obtaining the optimal arise from the department. An action plan for this choice is discussed below.

Action Strategy.
Recommendation
Lewis will take control of the function of EVP Marketing after Krasnow leaves.

Advertising and Marketing features would be merged.

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

Manufacturing feature will certainly stay part of advertising under advertising and marketing function.

Lewis will divide herself from operations.

An autonomous management style with employee empowerment will be utilized in marketing department.

Open up door policy and also focus on cross departmental communication will certainly be focused on getting rid of disharmony.

Backup plan.

If the integration does not exercise as intended, a contingency plan would certainly adhere to which would divide the production feature from the advertising function to reduce the lots on the SVP of marketing and advertising. In case Judith Shapiro does not obtain hired, Lewis will certainly be heading the marketing department without an SVP. In that case the manufacturing feature will absolutely be divided by positioning it under an SVP production.