Merchant Card Services C Case Study Analysis


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Merchant Card Services C Case Study Solution

Background and Facts

Merchant Card Services C an office materials merchant for little and also average sized services has actually just recently been associated with planning for a merging with its competitor Home Deport, which has impacted effectiveness levels in departmentswith the elderly manager involved in lawful complications presented by the government Profession Payment. With the Marketing Head putting forward the news of his departure from the company in one year, Jeannie Lewis, the present head of procedures has actually been asked to take the function in the future. With challenges in the form of a possible cultural modification and also reduced employee morale, the company is in need of a total reengineering initiative at the marketing division.

Problem Declaration
Porter's 5 Forces Analysis
The potential social modification at the marketing division of Merchant Card Services C is increasing uncertainty in the workplace leading to various difficulties for the Jeannie Lewis who 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 strategic choices because Stapes Inc. needed to desert its strategies of merging with Workplace Deport after the Federal Trade Commission's treatment while doing so. Given the reality that the store has a global presence with branches in UK, U.S.A., Canada and Germany, political consider each of these countries may be able to impact performance or critical goals. Federal Trade Payment's antitrust suit versus the merger took up beneficial time of the organization's senior monitoring suggesting that 'political' factors can have serious effects for a worldwide business.

Economic Factors: Economic factors such as the development of small businesses in the worldwide scenario suggest that Merchant Card Services C is prospering in a setting where there is possible growth of organisations. Truth that store consumers are mostly looking for office products for residence workplaces suggests that the market has a rising pattern of business owners and home based companies.

Social factors: Social trends in the economic climate show that consumers are trying to find benefit as well as eye-catching costs. Marketing research demonstrates how the consumer for Merchant Card Services C does not have awareness about locating remedies which can use a combination of benefit and low costs.

Technological factors: Innovation plays a vital role in Merchant Card Services C's service strategy specifically as the company is piloting Innovation centers which would supply innovation sales and also support in the type of memory upgrades, peripheral installations. (Summary of INSECT in appendix 2).

OB Issues and Effects.

A number of underlying Business Actions concerns can be seen in Merchant Card Services C's case as highlighted in this area.

Apprehensions concerning cultural change: There is apprehension about a cultural modification that would happen once Todd Krasnow leaves from his placement as the Executive Vice Head Of State of Advertising And Marketing with the majority of the team member currently revealing unhappiness over this potential relocation. This anticipated change has actually created stress in the work environment which has been paired with the past stress and anxiety of preparing the firm for a possible merger with House Deport.
Pest Analysis
Demanding Work Atmosphere for Newcomers: There is lack of workers that can match the demanding environment of a busy company. Not just does this bring about problem in discovering the best people, it puts anxiety on brand-new hires as can not hold up against the rate as well as pressure that the company expects them to birth.

Twin Coverage Lines: Beginners locate this organizational culture difficult as well as hard to handle especially as dotted line relationships are indicated to be weak as a whole as well as objective setup and also performance assessment is still done by the strong line supervisor. This means that novices might shed clarity concerning their corresponding functions as well as objectives especially as dotted line reporting does not keep them in straight interaction with the solid line supervisors.

Bitterness From Cross Departmental Hiring: Krasnow's decision to make Lewis his successor instead of Bridget Coles although it had been speculated that the last would certainly take Krasnow's placement came as a strike to her spirits. Lewis may have been capable and also ideal for the work but the fact that Kransnow's separation would certainly make Coles a direct report to Lewis may have been the reason for Coles' resignation from solutions.

Anxiety & Task Insecurity: Concern as well as instability can be identified as 2 major worries that Lewis would be managing especially as the merger has now be terminated and two senior execs of the marketing department would be leaving. The entire duty of the division would certainly be falling on Lewis's shoulders that would certainly not simply supervise of brining regarding a social change but would likewise have to prove herself in her new role.

Incompatible Management Style of Leader: Lewis's management design and also its conflict with the advertising and marketing division's duty can additionally be viewed as an OB obstacle especially as she has actually been made use of to handling problems in the operations department where employees are taught to focus on procedures and also get them right. The advertising and marketing department on the other hand can be seen as a team of individuals who are utilized to being supported by Krasnow who concentrated a lot more on result than processes.

Interdepartmental Disagreements: Interdepartmental disputes in between three divisions, marketing, merchandizing and also procedures specifically over the allocation of the advertising mix can be identified as one more OB problem. Although the advertising and marketing department does not share the same vision as the other 2 departments regarding the aloocation of the marketing mix twoards promos and also advertsing, the merchandizing and operations departments do not agree over the advertising and marketing mix allotment amongst each other either.

Fragmentation in Marketing Division: Fragmentation in between the marketing and advertising departments can be determined as one more OB issue which could require more focus. The reality that the advertising and marketing sections in the advertising department are disconnected is stopping both divisions from getting from each other's experience and proficiency. Assimilation of advertising and marketing with retailing as well as procedures would become harder if the advertising department itself is disintegrated which can be an additional possible OB problem.

Merchant Card Services C Analysis

Various concepts have actually been made use of to clarify the scenarios to get further clearness about the situation handy.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Theory X, the majority of supervisors believe that staffs are easy and lazy, have little passion and withstand modification. The hard version of this theory emphasized browbeating, tight controls, dangers and also punishments. Gradually it creates reduced performance, refined sabotage and also rivalry (Bargain, 2003). The circumstance at Merchant Card Services C is not entirely complying with Theory X, it can be seen that brand-new hires are finding this setting rather stressful which might eventually lead to a higher disposition of the management in the direction of Theory X. As per McGregor's promoted view, which he called Concept Y, the crucial job of the monitoring is to prepare organizational problems to ensure that people can accomplish their own objectives best by directing their initiatives in the direction of organizational rewards. If people find no fulfillment in their job, the monitoring would certainly have little selection however to rely on concept X and also external control (Offer, 2003). Also while assessing Lewis's administration design, theory X might have been suitable in the operations division somewhat however the Marketing department would certainly need reliance on Theory Y to get the creativity and creativity from the teams.

Tuckman's Teamwork Concept: As for Lewis's issue regarding bringing harmony in between the marketing and advertising division is worried, this would initially bring about conflict as gone over by Bruce Tuckman in his 'Synergy Concept'. (Tuckman, 1965). As per Tuckman's theory shown in appendix 3, throughout the first phase of group advancement, people might not bond, as they are active discovering their area in the team. By incorporating the advertising and marketing department's work, there might be the same preliminary detach which might lead to the 2nd stage of 'storming' where the groups challenge each other. Nonetheless, it is just throughout the third stage or 'norming' when they would integrate to share ideas before the group can produce harmony in the 4th phase 'executing'.

Bridges' Change Version: As per William Bridge's concept (appendix 4), people are quite uneasy with modification, which is noticeable by the situation at Merchant Card Services C The situation can be seen as a regular program of life if is studied based on Bridge's theory where he explains that people go through 3 stages of shift when they experience adjustment. 'Ending, shedding and Releasing', The Neutral Zone and 'The New Beginning' (Bridges, 2004). When people are presented with modification, they get in stage one therefore there might be feelings like sadness, unpredictability, disappointment, temper, anxiety, denial as well as disorientation.The scenario at the advertising division of Merchant Card Services C is comparable so Lewis can get comfortable with the suggestion that it is not amazing behavior. In the 2nd stage, there may be a requirement to bridge the gap between the brand-new and also old culture so Lewis might have to encounter this experience when Krasnow leaves. There might be low spirits as well as low performance at this stage which must not be taken as a problem. It is during this stage that Lewis will need to give advice to the department to make sure that they can find a sense of direction. It can be seen just how Krasnow has currently made this change simpler by making Lewis obtain involved in the department a year before his actual separation. As per Bridges' Model, phase three will produce visibility to knowing, High power and also dedication as individuals will accept the change (Bridges, 2004).
Vrio Analysis
Maslow's Requirement pecking order: The OB issue pertaining to insecurity at the workplace has been triggered to start with by the change in management and second of all by the reality that the merging will certainly no longer be initiated. Abraham Maslow in his Concept of 'Demands Power structure' (appendix 5) has reviews the value of 'protection needs as being a reduced level requirement of a human for setting off inspiration. As seen in the pyramid cooperated appendix 3, we can see exactly how 'the demand to feel secure as well as unharmed' goes to the second degree of needs. Prior to a worker can be made to develop mentally, he needs to have his 'Physical 'and also 'Safety and security' requires met. This suggests that unless the workers are made to feel protected about their existing employment status in Merchant Card Services C they may not get to 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Merchant Card Services C Case Study

Implication of Analysis.

The OB analysis has considered numerous theories to understand how to cope with the existing circumstance available. The following three choices have actually been proposed to assist Lewis take care of the organizational obstacles in the advertising division. Each of these choices has actually been recommended for relieving the shift required to bring the advertising and marketing division according to the needs of the marketplace and also for making the cultural modification that would follow as soon as the present leader leaves.

Integration of marketing and advertising functions. Dividing Adverting and also Manufacturing functions. Combination of Marketing with Workflow.

Examination of Alternatives.

Combination of Marketing & Marketing Functions: The internal marketing firm of Merchant Card Services C is currently stamina for the organization in terms of saving up on overheads connected to advertising as well as promo. Since no new recruitment has been done after Bridget Cole's departure with the coverage line being directly designated to Krasnow for the advertising and marketing function, this is a favorable opportunity for incorporating the marketing and advertising features. Judith Shapiro who has earlier been interviewed by Lewis during the earlier merging days has expertise in business-to-business advertising in addition to company and also retail advertising experience. As soon as Krasnow leaves, Lewis can work with Shapiro as an EVP for advertising and marketing to take care of both marketing and advertising features.

The benefit of this technique is that it will certainly integrate the two functions while decreasing the demand for working with an additional source for advertising and marketing. Lewis would be heading the advertising division and also in any kind of case her substitute would certainly be required for the present role that she is carrying out. The downside of this choice is that exterior hiring might bring about resentment from internal personnel that might be eying the placement of EVP after Lewis takes over Krasnow's setting.

Dividing Adverting and also Manufacturing: Offered the competitive pressures as well as premium quality job called for from the ad agency, it is recommended that Lewis needs to enable the manufacturing unit to be a separate function from the marketing unit. Given that most advertising agencies had these 2 features as different systems, it makes more sense to follow the standard. Both functions may be able to focus on their core turns on much more effectively. Nevertheless, the drawback of this technique would certainly be that added costs would certainly have to be birthed for setting up separate production features. Along with this, a manufacturing head might need to be hired which can enhance expenses for the organization.

Integration of Advertising with Procedures: Because Lewis is currently taking treatment of the marketing as well as procedures departments at the same time; it makes feeling to incorporate the 2 functions considering that she has been effectively taking care of both ends. The truth that Lewis has to adjust her administration style for the advertising department recommends that these 2 departments would be culturally varied.


An assessment of the 3 options indicates that integration of marketing and operations would certainly not be a viable move due to the vast differences between the 2 divisions in spite of the fact that presently Lewis is dealing with both. While separation of the manufacturing feature might have been a beneficial action for the advertising division, the truth that it would certainly indicate positioning a 3rd feature under Lewis's wing means this need to be prevented.

Action Strategy.
Lewis will certainly take over 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 advertising and marketing.

Manufacturing feature will stay component of advertising under advertising function.

Lewis will divide herself from operations.

A democratic leadership design with worker empowerment will be utilized in advertising department.

Open up door plan as well as emphasis on cross departmental interaction will certainly be focused on getting rid of disharmony.

Contingency plan.

If the combination does not work out as prepared, a backup plan would certainly follow which would separate the production function from the marketing feature to decrease the tons on the SVP of marketing and advertising. In case Judith Shapiro does not get hired, Lewis will certainly be heading the marketing division without an SVP. Because case the manufacturing function will definitely be separated by placing it under an SVP production.