Magna International Inc B Case Study Solution


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Magna International Inc B Case Study Solution

Background and Facts

Magna International Inc B an office supplies retailer for tiny and also moderate sized companies has recently been involved in planning for a merger with its competitor House Deport, which has impacted effectiveness levels in departmentswith the senior supervisor involved in lawful difficulties put forth by the government Profession Commission. With the Advertising Head putting forward the news of his separation from the business in one year, Jeannie Lewis, the present head of procedures has been asked to take the role in the near future. With difficulties in the kind of a potential social modification as well as low staff member spirits, the company is in need of a complete reengineering effort at the advertising and marketing department.

Issue Statement
Porter's 5 Forces Analysis
The possible cultural adjustment at the advertising department of Magna International Inc B is increasing unpredictability in the working environment causing numerous obstacles for the Jeannie Lewis that would be replacing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a major function in impacting calculated decisions because Stapes Inc. had to desert its plans of combining with Office Deport after the Federal Trade Payment's treatment while doing so. Given the fact that the store has an international visibility with branches in UK, U.S.A., Canada and Germany, political factors in each of these countries might have the ability to influence efficiency or strategic goals. Federal Profession Compensation's antitrust fit against the merging took up beneficial time of the organization's elderly management suggesting that 'political' factors can have major implications for a worldwide company.

Economic Factors: Financial factors such as the introduction of local business in the global scenario suggest that Magna International Inc B is growing in an environment where there is potential growth of organisations. In addition to this, reality that store consumers are mostly trying to find workplace supplies for office recommends that the market has a climbing fad of business owners as well as home businesses.

Social factors: Social trends in the economic climate reveal that customers are searching for benefit as well as attractive costs. Marketing research demonstrates how the consumer for Magna International Inc B lacks recognition concerning finding solutions which can supply a combination of benefit as well as inexpensive.

Technological factors: Innovation plays an important duty in Magna International Inc B's organisation technique particularly as the company is piloting Innovation centers which would certainly use modern technology sales and also assistance in the type of memory upgrades, outer setups. (Summary of PEST in appendix 2).

OB Issues and Manifestations.

Several underlying Organizational Habits problems can be seen in Magna International Inc B's case as highlighted in this section.

Uneasiness about cultural adjustment: There is concern regarding a cultural modification that would happen when Todd Krasnow leaves from his position as the Exec Vice President of Marketing with a lot of the employee already revealing unhappiness over this potential action. This predicted adjustment has produced tension in the office which has actually been coupled with the past tension of preparing the firm for a possible merger with Home Deport.
Pest Analysis
Demanding Job Environment for Newcomers: There is scarcity of workers that can match the demanding atmosphere of a busy company. Not just does this cause problem in discovering the best people, it places tension on brand-new hires as can not stand up to the rate as well as pressure that the company anticipates them to bear.

Double Reporting Lines: Beginners find this business society cumbersome and challenging to deal with particularly as populated line connections are indicated to be weaker in general and unbiased setting and also efficiency evaluation is still done by the solid line supervisor. This indicates that novices can lose clarity about their corresponding duties as well as objectives especially as populated line reporting does not maintain them in direct interaction with the solid line managers.

Bitterness From Cross Departmental Hiring: Krasnow's decision to make Lewis his follower rather than Bridget Coles although it had been hypothesized that the last would certainly take Krasnow's setting came as a blow to her morale. Lewis may have been capable and suitable for the task yet the reality that Kransnow's departure would make Coles a straight record to Lewis may have been the factor for Coles' resignation from services.

Concern & Job Instability: Worry and also insecurity can be identified as 2 major worries that Lewis would certainly be taking care of especially as the merger has currently be cancelled as well as 2 elderly execs of the marketing division would be leaving. The whole responsibility of the division would be dropping on Lewis's shoulders who would certainly not simply be in charge of brining regarding a social modification but would additionally have to confirm herself in her brand-new role.

Incompatible Administration Design of Leader: Lewis's monitoring design and its incompatibility with the advertising division's function can likewise be seen as an OB challenge especially as she has actually been utilized to managing issues in the operations division where employees are shown to focus on procedures and get them right. The advertising and marketing department on the other hand can be seen as a team of individuals that are made use of to being supported by Krasnow that focused more on result than procedures.

Interdepartmental Disputes: Interdepartmental differences between three departments, marketing, merchandizing as well as operations specifically over the allowance of the advertising mix can be determined as another OB worry. The marketing division does not share the very same vision as the other two divisions regarding the aloocation of the advertising and marketing mix twoards promos and advertsing, the merchandizing and also operations departments do not concur over the advertising mix appropriation among one an additional either.

Disintegration in Marketing Division: Fragmentation in between the advertising and marketing departments can be determined as an additional OB concern which can require more interest. The fact that the marketing and advertising areas in the advertising and marketing department are separated is avoiding both divisions from obtaining from each various other's experience and expertise. Combination of marketing with retailing as well as operations would certainly come to be harder if the marketing department itself is broken down which can be an additional possible OB problem.

Magna International Inc B Analysis

Different concepts have been utilized to explain the conditions to get additional quality regarding the circumstance at hand.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Theory X, most managers think that subordinates are passive and also careless, have little ambition and stand up to adjustment. The scenario at Magna International Inc B is not totally adhering to Theory X, it can be seen that new hires are finding this setting rather difficult which may ultimately lead to a higher disposition of the monitoring in the direction of Concept X. Even while evaluating Lewis's management style, concept X may have been appropriate in the operations division to some extent but the Advertising department would certainly call for reliance on Theory Y in order to obtain the imagination and originality from the groups.

Tuckman's Synergy Concept: As far as Lewis's problem about bringing consistency in between the advertising and advertising and marketing department is worried, this would at first lead to contrast as discussed by Bruce Tuckman in his 'Synergy Concept'. By incorporating the marketing and marketing department's work, there may be the same initial separate which can lead to the second stage of 'storming' where the teams test one another.

When individuals are offered with change, they get in phase one and so there may be emotions like sadness, unpredictability, disappointment, temper, fear, rejection and disorientation.The scenario at the marketing division of Magna International Inc B is comparable so Lewis can get comfortable with the suggestion that it is not remarkable habits. It is during this stage that Lewis will certainly have to offer advice to the division so that they can find a feeling of direction. It can be seen how Krasnow has actually currently made this transition easier by making Lewis obtain entailed in the department a year prior to his real separation.
Vrio Analysis
Abraham Maslow in his Concept of 'Demands Hierarchy' (appendix 5) has discusses the relevance of 'protection requires 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 demand to feel safe and also out of threat' is at the 2nd degree of demands. Prior to a staff member can be made to establish psychologically, he requires to have his 'Physiological 'as well as 'Safety and security' requires satisfied.

SWOT Analysis for Magna International Inc B Case Study

Implication of Analysis.

The OB analysis has considered numerous theories to comprehend how to manage the present circumstance handy. The following three options have actually been proposed to help Lewis deal with the organizational obstacles in the advertising and marketing department. Each of these options has been suggested for easing the transition required to bring the advertising division in line with the demands of the marketplace as well as for making the cultural modification that would follow when the present leader leaves.

Integration of advertising and marketing functions. Dividing Adverting as well as Production features. Integration of Advertising with Procedures.

Analysis of Alternatives.

Assimilation of Advertising & Advertising And Marketing Functions: The internal advertising company of Magna International Inc B is currently toughness for the organization in regards to conserving up on expenses related to advertising as well as promotion. Since no new employment has been done after Bridget Cole's separation with the reporting line being straight designated to Krasnow for the advertising and marketing feature, this is a desirable opportunity for incorporating the advertising and marketing functions. Judith Shapiro that has actually earlier been interviewed by Lewis throughout the earlier merging days has experience in business-to-business advertising and marketing along with company and also retail advertising and marketing experience. As soon as Krasnow leaves, Lewis can work with Shapiro as an EVP for advertising and marketing to manage both advertising and marketing functions.

The advantage of this strategy is that it will certainly incorporate both features while decreasing the demand for employing an additional source for marketing. Lewis would certainly be heading the advertising division as well as in any type of case her substitute would be needed for the current role that she is doing. The drawback of this option is that outside hiring may produce animosity from interior workers that might be looking at the setting of EVP after Lewis takes over Krasnow's position.

Dividing Adverting and Manufacturing: Offered the affordable stress as well as top quality work needed from the ad agency, it is advised that Lewis needs to enable the production system to be a different feature from the advertising system. Considering that the majority of ad agency had these two functions as separate devices, it makes even more feeling to comply with the norm. Both features may be able to concentrate on their core activates extra efficiently. The disadvantage of this technique would certainly be that additional expenses would have to be birthed for setting up separate manufacturing functions. A manufacturing head might have to be hired which could raise expenses for the organization.

Integration of Marketing with Operations: Considering that Lewis is currently taking treatment of the advertising and marketing as well as operations divisions simultaneously; it makes feeling to incorporate the two functions because she has actually been efficiently taking care of both ends. The reality that Lewis has to adapt her management style for the advertising and marketing division recommends that these 2 departments would certainly be culturally varied.


An examination of the three choices suggests that integration of advertising and also procedures would certainly not be a possible action as a result of the vast differences between the two divisions although that presently Lewis is dealing with both. While splitting up of the manufacturing function may have been a beneficial move for the marketing department, the truth that it would certainly imply positioning a third feature under Lewis's wing means this need to be stayed clear of. The assimilation of the advertising division is the most effective alternative in regards to getting the optimum arise from the division. An action plan for this option is reviewed listed below.

Activity Strategy.
Lewis will certainly take control of the role of EVP Advertising and marketing after Krasnow leaves.

Marketing and advertising features would be merged.

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

Production function will continue to be part of advertising under advertising and marketing function.

Lewis will separate herself from operations.

A democratic leadership design with staff member empowerment will certainly be made use of in advertising and marketing division.

Open up door plan and also emphasis on cross departmental communication will be aimed at removing discord.

Backup strategy.

If the assimilation does not exercise as prepared, a contingency strategy would certainly adhere to which would divide the manufacturing feature from the advertising feature to decrease the load on the SVP of advertising and marketing. In case Judith Shapiro does not obtain worked with, Lewis will be heading the marketing department without an SVP. Because case the production function will most definitely be separated by positioning it under an SVP manufacturing.