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

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Background and Facts

Magic Timber And Steel Investment Evaluation With Net Present Value an office products retailer for small as well as average sized companies has actually just recently been involved in planning for a merger with its competitor Home Deport, which has actually affected effectiveness degrees in departmentswith the senior manager associated with legal issues presented by the federal Trade Compensation. With the Advertising and marketing Head putting forward the news of his departure from the business in one year, Jeannie Lewis, the existing head of operations has actually been asked to take the function in the near future. With obstacles in the kind of a potential social modification and low employee morale, the organization is in need of a complete reengineering effort at the advertising department.

Problem Declaration
Porter's 5 Forces Analysis
The potential cultural adjustment at the advertising and marketing department of Magic Timber And Steel Investment Evaluation With Net Present Value is raising unpredictability in the workplace leading to various challenges for the Jeannie Lewis who would be replacing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant duty in impacting tactical decisions since Stapes Inc. had to desert its plans of merging with Workplace Deport after the Federal Profession Payment's intervention at the same time. Offered the fact that the store has a worldwide presence with branches in UK, USA, Canada and Germany, political factors in each of these nations might have the ability to impact efficiency or critical objectives. Federal Profession Commission's antitrust match against the merging occupied useful time of the company's senior management recommending that 'political' factors can have major effects for a global organisation.

Economic Factors: Financial factors such as the appearance of local business in the international scenario recommend that Magic Timber And Steel Investment Evaluation With Net Present Value is prospering in an atmosphere where there is prospective growth of organisations. In addition to this, fact that shop clients are mostly seeking workplace supplies for office suggests that the marketplace has a climbing fad of business owners and also home businesses.

Social factors: Social trends in the economy reveal that consumers are looking for benefit as well as eye-catching rates. Market research demonstrates how the client for Magic Timber And Steel Investment Evaluation With Net Present Value lacks awareness about discovering remedies which can supply a mix of comfort and low costs.

Technical factors: Technology plays a crucial function in Magic Timber And Steel Investment Evaluation With Net Present Value's organisation technique specifically as the organization is piloting Modern technology centers which would use innovation sales as well as support in the type of memory upgrades, peripheral installments. (Summary of BUG in appendix 2).

OB Issues and Symptoms.

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

Apprehensions concerning cultural change: There is apprehension about a cultural adjustment that would certainly take place when Todd Krasnow leaves from his position as the Exec Vice President of Advertising with the majority of the personnel currently showing discontent over this prospective relocation. This predicted change has produced stress in the workplace which has actually been coupled with the previous stress of preparing the firm for a potential merging with Home Deport.
Pest Analysis
Demanding Job Setting for Newcomers: There is lack of workers that can match the demanding atmosphere of a fast-paced company. Not only does this bring about problem in locating the best individuals, it places stress and anxiety on brand-new hires as can not endure the rate and stress that the organization anticipates them to bear.

Dual Coverage Lines: Newcomers discover this business culture troublesome as well as tough to manage especially as populated line connections are implied to be weaker in general and unbiased setup as well as efficiency examination is still done by the strong line manager. This means that novices could shed quality regarding their respective roles and also objectives especially as dotted line reporting does not maintain them in direct interaction with the solid line supervisors.

Bitterness From Cross Departmental Hiring: Krasnow's decision to make Lewis his successor rather than Bridget Coles even though it had been speculated that the last would certainly take Krasnow's placement came as a blow to her spirits. Lewis might have been capable as well as suitable for the task however the fact that Kransnow's separation would make Coles a straight record to Lewis might have been the reason for Coles' resignation from services.

Anxiety & Job Instability: Worry and insecurity can be identified as 2 significant issues that Lewis would be managing specifically as the merger has currently be terminated and two elderly execs of the advertising and marketing division would certainly be leaving. The whole obligation of the division would be falling on Lewis's shoulders who would certainly not simply be in charge of brining regarding a social modification but would certainly likewise have to show herself in her brand-new function.

Inappropriate Monitoring Style of Leader: Lewis's monitoring style and its conflict with the marketing division's duty can additionally be seen as an OB challenge particularly as she has actually been used to dealing with concerns in the operations department where personnel are educated to concentrate on processes and get them. The advertising and marketing division on the various other hand can be seen as a group of people who are used to being supported by Krasnow that concentrated a lot more on output than procedures.

Interdepartmental Arguments: Interdepartmental disputes between three divisions, marketing, merchandizing and operations specifically over the allotment of the advertising mix can be identified as one more OB worry. The marketing department does not share the same vision as the other 2 departments regarding the aloocation of the advertising and marketing mix twoards promos and also advertsing, the merchandizing and also operations divisions do not concur over the advertising and marketing mix allocation amongst one another either.

Fragmentation in Marketing Department: Fragmentation in between the advertising and marketing divisions can be identified as one more OB concern which might require further attention. The fact that the advertising and marketing areas in the advertising department are separated is protecting against both divisions from getting from each various other's experience and proficiency. Combination of advertising with merchandising and operations would certainly end up being more difficult if the advertising and marketing department itself is degenerated which can be another possible OB issue.

Magic Timber And Steel Investment Evaluation With Net Present Value Analysis

Different theories have actually been made use of to clarify the circumstances to obtain further clarity regarding the circumstance available.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Concept X, a lot of supervisors think that juniors are passive and lazy, have little aspiration and also withstand modification. The tough version of this concept highlighted browbeating, tight controls, dangers and penalties. Over time it produces reduced performance, subtle sabotage and also rivalry (Deal, 2003). The scenario at Magic Timber And Steel Investment Evaluation With Net Present Value is not entirely following Theory X, it can be seen that brand-new hires are discovering this environment rather difficult which may ultimately lead to a higher disposition of the administration towards Concept X. According to McGregor's advocated view, which he called Theory Y, the vital job of the monitoring is to prepare business conditions to ensure that people can accomplish their very own objectives best by routing their initiatives in the direction of business incentives. If individuals discover no complete satisfaction in their job, the management would have little option but to rely on concept X and exterior control (Bargain, 2003). Also while assessing Lewis's management style, theory X might have appropriated in the operations department to some extent but the Advertising division would certainly call for reliance on Concept Y to get the creative thinking and originality from the teams.

Tuckman's Team effort Concept: Regarding Lewis's worry about bringing harmony between the advertising and marketing department is worried, this would at first cause contrast as discussed by Bruce Tuckman in his 'Team effort Concept'. (Tuckman, 1965). Based on Tuckman's theory displayed in appendix 3, throughout the preliminary stage of team growth, individuals might not bond, as they are busy locating their location in the team. By integrating the advertising and marketing department's job, there may be the same first detach which could lead to the second phase of 'storming' where the groups test each other. It is just throughout the 3rd stage or 'norming' when they would come together to share suggestions before the group can bring around harmony in the 4th stage 'doing'.

When individuals are offered with modification, they go into phase one and so there may be feelings like sadness, unpredictability, frustration, temper, anxiety, rejection and disorientation.The situation at the advertising and marketing department of Magic Timber And Steel Investment Evaluation With Net Present Value is similar so Lewis can obtain comfortable with the idea that it is not phenomenal behavior. It is throughout this stage that Lewis will have to give support to the division so that they can find a feeling of instructions. It can be seen how Krasnow has already made this shift simpler by making Lewis get included in the department a year before his real departure.
Vrio Analysis
Maslow's Demand power structure: The OB issue related to instability at the workplace has actually been triggered first of all by the modification in management and also second of all by the truth that the merging will certainly no more be launched. Abraham Maslow in his Concept of 'Demands Pecking order' (appendix 5) has talks about the relevance of 'protection needs as being a reduced level demand of a human for causing inspiration. As seen in the pyramid shared in appendix 3, we can see how 'the requirement to feel secure as well as safe' is at the 2nd level of needs. Before a worker can be made to develop psychologically, he requires to have his 'Physical 'as well as 'Security' needs fulfilled. This shows that unless the employees are made to feel protected about their existing work condition in Magic Timber And Steel Investment Evaluation With Net Present Value they might not get to 'Self-Fulfillment'. (King, 2009).

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



Implication of Analysis.

The OB analysis has actually considered various concepts to understand exactly how to cope with the existing circumstance handy. The adhering to three alternatives have been suggested to aid Lewis deal with the organizational challenges in the advertising division. Each of these choices has actually been proposed for reducing the change required to bring the advertising and marketing division according to the requirements of the marketplace as well as for making the social modification that would certainly comply with as soon as the current leader leaves.

Assimilation of advertising and marketing functions. Dividing Adverting and also Manufacturing functions. Assimilation of Advertising with Workflow.

Analysis of Alternatives.

Combination of Advertising & Marketing Functions: The internal advertising agency of Magic Timber And Steel Investment Evaluation With Net Present Value is already toughness for the organization in regards to saving up on overheads connected to advertising and also promo. Considering that no brand-new recruitment has actually been done after Bridget Cole's separation with the coverage line being directly appointed to Krasnow for the advertising and marketing function, this is a beneficial opportunity for integrating the marketing and advertising functions. Judith Shapiro that has earlier been spoken with by Lewis during the earlier merging days has competence in business-to-business advertising together with company as well as retail marketing experience. As soon as Krasnow leaves, Lewis can employ Shapiro as an EVP for advertising and marketing to handle both marketing and advertising functions.

The advantage of this approach is that it will integrate both features while reducing the requirement for working with an added resource for advertising. Lewis would be heading the advertising division as well as in any case her replacement would certainly be required for the existing function that she is performing. The drawback of this alternative is that external hiring may bring about animosity from internal workers who may be considering the setting of EVP after Lewis takes control of Krasnow's position.

Dividing Adverting as well as Manufacturing: Provided the affordable stress and also high quality work needed from the advertising agency, it is advised that Lewis must allow the manufacturing unit to be a separate feature from the marketing system. Considering that most advertising agencies had these 2 features as different units, it makes even more sense to follow the standard. Along with this, both features may be able to concentrate on their core turns on much more efficiently. Nonetheless, the downside of this strategy would certainly be that extra prices would certainly need to be birthed for setting up separate manufacturing features. Along with this, a production head may have to be hired which could boost expenses for the organization.

Integration of Advertising with Procedures: Because Lewis is currently looking after the marketing and also operations departments all at once; it makes sense to integrate both functions because she has been successfully looking after both ends. The reality that the two divisions already have major distinctions over allotment of sources suggests that this integration might have the ability to produce harmony especially as Lewis would certainly be heading both ends.However there are various negative aspects of this step especially as it would certainly put excessive worry over Lewis's shoulders. The reality that Lewis needs to adapt her management style for the advertising and marketing department recommends that these 2 divisions would certainly be culturally varied. In addition to this, Lewis might not be able to apply one kind of leadership style to both divisions which could lead to ineffectiveness in either one of the two functions.

Suggestion.



An examination of the 3 choices indicates that assimilation of marketing as well as procedures would not be a possible move because of the substantial distinctions in between both departments despite the fact that presently Lewis is dealing with both. While splitting up of the manufacturing feature may have been a desirable move for the marketing department, the reality that it would certainly suggest putting a 3rd function under Lewis's wing indicates this should be avoided as well. The assimilation of the advertising and marketing department is the most effective alternative in regards to getting the ideal arise from the department. An activity prepare for this choice is reviewed listed below.

Activity Strategy.
Recommendation
Lewis will take over the role of EVP Advertising after Krasnow leaves.

Advertising and Marketing functions would be combined.

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

Manufacturing function will remain component of marketing under marketing feature.

Lewis will separate herself from operations.

A democratic leadership design with worker empowerment will be utilized in marketing division.

Open door policy as well as focus on cross department communication will certainly be targeted at eliminating dissonance.

Contingency strategy.

If the integration does not exercise as prepared, a backup strategy would certainly comply with 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 obtain hired, Lewis will be heading the marketing department without an SVP. In that case the production feature will most definitely be separated by placing it under an SVP manufacturing.