Magic Timber And Steel Investment Evaluation With Net Present Value Case Study Analysis


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Magic Timber And Steel Investment Evaluation With Net Present Value Case Study Analysis

Background and Facts

Magic Timber And Steel Investment Evaluation With Net Present Value a workplace products merchant for small and medium sized services has actually just recently been involved in preparing for a merging with its competitor House Deport, which has actually influenced performance levels in departmentswith the senior manager involved in lawful problems presented 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 existing head of operations has been asked to take the function in the near future. With challenges in the form of a potential cultural change and also low staff member morale, the company needs a full reengineering effort at the marketing department.

Problem Declaration
Porter's 5 Forces Analysis
The possible social modification at the advertising department of Magic Timber And Steel Investment Evaluation With Net Present Value is raising uncertainty in the workplace causing different difficulties 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 duty in affecting calculated choices because Stapes Inc. needed to desert its strategies of merging with Workplace Deport after the Federal Trade Payment's treatment while doing so. Given the fact that the shop has a worldwide existence with branches in UK, U.S.A., Canada and Germany, political factors in each of these nations might have the ability to affect efficiency or tactical objectives. Federal Trade Commission's antitrust fit against the merger occupied important time of the company's elderly administration suggesting that 'political' factors can have severe effects for a global business.

Economic Factors: Economic factors such as the appearance of local business in the international circumstance recommend that Magic Timber And Steel Investment Evaluation With Net Present Value is flourishing in a setting where there is prospective development of businesses. Truth that store customers are mainly looking for office products for home workplaces suggests that the market has a climbing fad of business owners and also house based businesses.

Social factors: Social fads in the economic situation reveal that consumers are seeking benefit along with eye-catching rates. Market research demonstrates how the client for Magic Timber And Steel Investment Evaluation With Net Present Value lacks awareness regarding finding options which can offer a mix of ease as well as low costs.

Technological factors: Innovation plays an essential duty in Magic Timber And Steel Investment Evaluation With Net Present Value's company method specifically as the organization is piloting Technology facilities which would supply modern technology sales as well as assistance in the form of memory upgrades, peripheral setups. (Recap of BUG in appendix 2).

OB Issues and also Manifestations.

Numerous underlying Organizational Actions concerns can be seen in Magic Timber And Steel Investment Evaluation With Net Present Value's case as highlighted in this section.

Concerns about social adjustment: There is worry regarding a social modification that would occur as soon as Todd Krasnow leaves from his position as the Exec Vice President of Marketing with a lot of the staff members currently showing unhappiness over this possible relocation. This expected adjustment has actually developed anxiety in the work environment which has actually been combined with the previous stress and anxiety of preparing the firm for a prospective merging with Residence Deport.
Pest Analysis
Demanding Job Atmosphere for Newcomers: There is shortage of workers that can match the demanding setting of a fast-paced organization. Not just does this bring about difficulty in finding the best individuals, it places anxiety on brand-new hires as can not withstand the speed as well as pressure that the organization expects them to bear.

Double Coverage Lines: Beginners find this business society troublesome as well as tough to deal with especially as dotted line connections are suggested to be weaker generally and objective setup and also performance analysis is still done by the strong line supervisor. This suggests that beginners might shed clarity concerning their corresponding functions and also goals specifically as populated line reporting does not maintain them in direct interaction with the solid line managers.

Resentment From Cross Departmental Hiring: Krasnow's choice to make Lewis his successor rather than Bridget Coles although it had actually been hypothesized that the latter would certainly take Krasnow's position came as a blow to her spirits. Lewis may have been qualified and proper for the task yet the truth that Kransnow's separation would make Coles a direct record to Lewis may have been the reason for Coles' resignation from services.

Anxiety & Work Insecurity: Worry as well as insecurity can be recognized as 2 significant issues that Lewis would certainly be dealing with specifically as the merger has actually currently be cancelled and 2 senior executives of the advertising department would be leaving. The whole responsibility of the division would certainly be falling on Lewis's shoulders that would certainly not simply be in charge of brining about a cultural modification but would additionally have to verify herself in her brand-new role.

Inappropriate Monitoring Design of Leader: Lewis's monitoring style and also its incompatibility with the advertising and marketing division's role can additionally be seen as an OB challenge especially as she has been utilized to handling problems in the procedures department where personnel are instructed to concentrate on procedures and obtain them right. The advertising and marketing division on the various other hand can be seen as a group of individuals who are utilized to being nurtured by Krasnow who focused much more on output than procedures.

Interdepartmental Arguments: Interdepartmental disputes in between three divisions, marketing, merchandizing and procedures respectively over the allotment of the advertising mix can be identified as an additional OB issue. The advertising and marketing division does not share the exact same vision as the other 2 departments regarding the aloocation of the advertising and marketing mix twoards promotions and also advertsing, the merchandizing and also procedures divisions do not agree over the advertising mix allotment amongst one another either.

Disintegration in Advertising Department: Fragmentation between the marketing and advertising departments can be determined as another OB problem which might require more attention. The fact that the advertising and marketing areas in the advertising and marketing division are detached is preventing both departments from obtaining from each other's experience as well as experience. Combination of advertising with retailing as well as procedures would certainly come to be harder if the marketing department itself is disintegrated which can be an additional prospective OB issue.

Magic Timber And Steel Investment Evaluation With Net Present Value Analysis

Different concepts have been utilized to describe the conditions to get additional clearness regarding the situation available.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, the majority of managers think that juniors are passive as well as careless, have little aspiration as well as stand up to change. The difficult version of this theory emphasized threat, limited controls, threats and penalties. With time it creates low performance, refined sabotage as well as rivalry (Bargain, 2003). Although the situation at Magic Timber And Steel Investment Evaluation With Net Present Value is not entirely adhering to Concept X, it can be seen that new hires are locating this setting instead difficult which might ultimately cause a greater disposition of the administration towards Theory X. According to McGregor's advocated view, which he called Concept Y, the necessary task of the administration is to arrange organizational problems to make sure that people can achieve their own objectives best by guiding their efforts towards organizational benefits. If people find no satisfaction in their work, the monitoring would certainly have little selection yet to depend on theory X and also outside control (Deal, 2003). Also while evaluating Lewis's management style, concept X may have appropriated in the operations division somewhat yet the Marketing division would certainly require reliance on Theory Y so as to get the creative thinking and creativity from the groups.

Tuckman's Team effort Concept: As far as Lewis's worry about bringing consistency in between the marketing and advertising division is worried, this would at first result in conflict as gone over by Bruce Tuckman in his 'Teamwork Theory'. (Tuckman, 1965). According to Tuckman's theory received appendix 3, during the first phase of group growth, individuals may not bond, as they are busy discovering their place in the group. By integrating the advertising and marketing department's job, there may be the same preliminary disconnect which might cause the 2nd phase of 'storming' where the teams test each other. Nonetheless, it is just during the third phase or 'norming' when they would certainly come together to share ideas before the team can bring about harmony in the fourth phase 'performing'.

When individuals are offered with modification, they get in stage one as well as so there might be feelings like despair, uncertainty, irritation, anger, fear, rejection and disorientation.The circumstance at the advertising and marketing division of Magic Timber And Steel Investment Evaluation With Net Present Value is similar so Lewis can obtain comfy with the suggestion that it is not remarkable habits. It is during this phase that Lewis will certainly have to provide advice to the department so that they can locate a sense of instructions. It can be seen exactly how Krasnow has currently made this change simpler by making Lewis obtain included in the department a year before his real departure.
Vrio Analysis
Maslow's Demand power structure: The OB concern pertaining to instability at the work environment has actually been activated first of all by the modification in administration and secondly by the fact that the merger will no more be started. Abraham Maslow in his Concept of 'Requirements Power structure' (appendix 5) has talks about the relevance of 'safety needs as being a reduced degree need of a human for setting off motivation. As seen in the pyramid shared in appendix 3, we can see just how 'the requirement to really feel safe and secure and also untouched' goes to the 2nd degree of requirements. Before a worker can be made to develop psychologically, he requires to have his 'Physiological 'and 'Security' requires met. This suggests that unless the personnel are made to feel secure about their present employment condition in Magic Timber And Steel Investment Evaluation With Net Present Value they may not reach 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Magic Timber And Steel Investment Evaluation With Net Present Value Case Study

Ramification of Analysis.

The OB analysis has checked out various concepts to understand just how to cope with the current circumstance handy. The complying with 3 options have been suggested to assist Lewis deal with the business difficulties in the marketing department. Each of these options has been recommended for alleviating the shift required to bring the advertising division in accordance with the requirements of the market and for making the cultural adjustment that would comply with when the current leader leaves.

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

Analysis of Alternatives.

Judith Shapiro who has earlier been interviewed by Lewis during the earlier merger days has know-how in business-to-business marketing along with agency as well as retail marketing experience. Once Krasnow leaves, Lewis can hire Shapiro as an EVP for advertising to manage both advertising and also marketing functions.

The benefit of this strategy is that it will incorporate both functions while reducing the need for hiring an additional source for marketing. Along with this, Lewis would certainly be heading the advertising and marketing division as well as in any case her substitute would be needed for the present role that she is executing. The drawback of this option is that outside hiring might cause animosity from inner employees that might be eying the position of EVP after Lewis takes control of Krasnow's placement.

Dividing Adverting as well as Manufacturing: Offered the competitive pressures and high quality work needed from the marketing company, it is recommended that Lewis should enable the manufacturing device to be a different function from the marketing device. Considering that many marketing agencies had these two functions as separate systems, it makes even more feeling to follow the standard.

Combination of Advertising And Marketing with Operations: Because Lewis is already looking after the advertising and operations departments all at once; it makes good sense to integrate both functions considering that she has actually been efficiently caring for both ends. The reality that both departments already have significant differences over allotment of resources recommends that this assimilation might be able to cause harmony especially as Lewis would be heading both ends.However there are numerous downsides of this step particularly as it would place excessive problem over Lewis's shoulders. The fact that Lewis needs to adapt her administration design for the marketing division recommends that these two departments would be culturally diverse. Along with this, Lewis might not have the ability to use one type of management design to both departments which could cause ineffectiveness in either among both functions.


An evaluation of the three alternatives suggests that assimilation of marketing as well as procedures would certainly not be a practical action due to the huge distinctions between the 2 divisions in spite of the truth that currently Lewis is dealing with both. While splitting up of the manufacturing function may have been a beneficial move for the advertising department, the truth that it would mean positioning a 3rd function under Lewis's wing means this must be prevented.

Action Plan.
Lewis will take control of the function of EVP Advertising and marketing after Krasnow leaves.

Advertising and Marketing functions would certainly be combined.

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

Production function will continue to be component of marketing under marketing function.

Lewis will certainly divide herself from procedures.

An autonomous leadership design with worker empowerment will certainly be used in advertising department.

Open up door policy and also emphasis on cross department interaction will certainly be aimed at getting rid of discord.

Backup plan.

If the assimilation does not work out as planned, a backup strategy would certainly follow which would certainly divide the manufacturing function from the marketing function to reduce the tons on the SVP of marketing and advertising. In case Judith Shapiro does not obtain employed, Lewis will certainly be heading the advertising department without an SVP. Because case the production feature will certainly be divided by positioning it under an SVP production.