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Merrill Lynchs Acquisition Of Mercury Asset Management Case Study Analysis

CASE SOLUTION

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Merrill Lynchs Acquisition Of Mercury Asset Management Case Study Solution

Background and Facts

Merrill Lynchs Acquisition Of Mercury Asset Management an office supplies merchant for tiny as well as average sized businesses has recently been involved in preparing for a merging with its rival House Deport, which has actually affected effectiveness degrees in departmentswith the senior manager associated with legal complications put forth by the government Trade Compensation. With the Advertising and marketing Head putting forward the news of his departure from the company in one year, Jeannie Lewis, the existing head of operations has been asked to take the duty in the near future. With difficulties in the form of a prospective social change and also low employee morale, the company needs a full reengineering initiative at the advertising department.

Problem Statement
Porter's 5 Forces Analysis
The possible cultural change at the marketing division of Merrill Lynchs Acquisition Of Mercury Asset Management is enhancing unpredictability in the working environment causing numerous obstacles for the Jeannie Lewis that would certainly be replacing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a major role in influencing tactical decisions because Stapes Inc. had to abandon its strategies of combining with Workplace Deport after the Federal Profession Commission's intervention at the same time. Provided the fact that the store has a worldwide existence with branches in UK, U.S.A., Canada and Germany, political consider each of these countries might be able to influence performance or critical goals. Federal Trade Compensation's antitrust suit versus the merging occupied beneficial time of the organization's senior administration suggesting that 'political' factors can have serious ramifications for a global service.

Economic Factors: Economic factors such as the development of small businesses in the worldwide situation recommend that Merrill Lynchs Acquisition Of Mercury Asset Management is flourishing in an environment where there is potential growth of companies. Fact that shop consumers are primarily looking for office products for residence offices suggests that the market has a rising fad of entrepreneurs and also residence based services.

Social factors: Social patterns in the economy show that clients are searching for ease in addition to eye-catching rates. Market research demonstrates how the consumer for Merrill Lynchs Acquisition Of Mercury Asset Management does not have recognition regarding finding services which can supply a mix of comfort and affordable.

Technical factors: Modern technology plays a vital duty in Merrill Lynchs Acquisition Of Mercury Asset Management's service strategy specifically as the organization is piloting Technology facilities which would offer innovation sales and also assistance in the form of memory upgrades, outer setups. (Recap of PEST in appendix 2).

OB Issues as well as Symptoms.

Numerous underlying Business Actions concerns can be seen in Merrill Lynchs Acquisition Of Mercury Asset Management's case as highlighted in this section.

Apprehensions about social modification: There is concern regarding a social change that would certainly occur once Todd Krasnow leaves from his setting as the Exec Vice Head Of State of Marketing with a lot of the team member already revealing unhappiness over this potential move. This expected change has developed tension in the workplace which has been combined with the previous stress and anxiety of preparing the company for a possible merging with Residence Deport.
Pest Analysis
Difficult Work Setting for Newcomers: There is lack of workers that can match the demanding atmosphere of a busy company. Not only does this cause difficulty in discovering the right people, it places stress and anxiety on brand-new hires as can not endure the speed and pressure that the organization expects them to birth.

Double Coverage Lines: Newbies discover this business culture cumbersome as well as tough to manage particularly as populated line relationships are indicated to be weaker in general and also unbiased setup as well as efficiency evaluation is still done by the strong line manager. This implies that newbies could shed clearness regarding their particular roles as well as objectives specifically as dotted line coverage does not maintain them in straight interaction with the solid line supervisors.

Animosity From Cross Departmental Hiring: Krasnow's choice to make Lewis his successor as opposed to Bridget Coles even though it had actually been guessed that the latter would certainly take Krasnow's setting came as a blow to her morale. Lewis might have been qualified and ideal for the work yet the truth that Kransnow's separation would certainly make Coles a straight record to Lewis might have been the factor for Coles' resignation from solutions.

Fear & Job Insecurity: Anxiety and instability can be identified as two major worries that Lewis would certainly be handling especially as the merger has actually currently be terminated as well as 2 elderly executives of the advertising and marketing department would be leaving. The entire obligation of the division would be dropping on Lewis's shoulders who would certainly not simply supervise of brining concerning a cultural change however would additionally need to show herself in her new duty.

Incompatible Monitoring Design of Leader: Lewis's management design and also its incompatibility with the advertising division's function can additionally be seen as an OB difficulty particularly as she has actually been used to managing issues in the procedures division where employees are instructed to concentrate on procedures and get them right. The marketing division on the other hand can be seen as a group of people that are utilized to being supported by Krasnow who focused a lot more on output than procedures.

Interdepartmental Differences: Interdepartmental arguments between three divisions, marketing, merchandizing and also procedures respectively over the allocation of the advertising mix can be recognized as one more OB problem. The advertising department does not share the very same vision as the other two departments pertaining to the aloocation of the advertising mix twoards promotions as well as advertsing, the merchandizing and also procedures divisions do not concur over the advertising mix appropriation among one an additional either.

Disintegration in Marketing Division: Fragmentation between the marketing and advertising divisions can be identified as another OB concern which can require further interest. The fact that the marketing and advertising sections in the advertising and marketing division are disconnected is preventing both divisions from gaining from each various other's experience and also knowledge. Combination of advertising with merchandising as well as operations would come to be harder if the advertising department itself is disintegrated which can be an additional potential OB problem.

Merrill Lynchs Acquisition Of Mercury Asset Management Analysis

Numerous concepts have been utilized to clarify the circumstances to get additional quality concerning the situation at hand.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Concept X, many supervisors think that juniors are passive and also lazy, have little passion and also stand up to change. The circumstance at Merrill Lynchs Acquisition Of Mercury Asset Management is not totally complying with Concept X, it can be seen that brand-new hires are discovering this setting instead difficult which might eventually lead to a greater disposition of the administration in the direction of Concept X. Also while analyzing Lewis's monitoring style, theory X may have been suitable in the operations department to some level yet the Marketing department would certainly call for reliance on Theory Y in order to obtain the creativity as well as creativity from the teams.

Tuckman's Teamwork Concept: Regarding Lewis's concern concerning bringing consistency in between the marketing and advertising division is concerned, this would originally result in conflict as reviewed by Bruce Tuckman in his 'Team effort Concept'. (Tuckman, 1965). Based on Tuckman's concept shown in appendix 3, during the preliminary stage of group development, people might not bond, as they are active finding their area in the group. By incorporating the marketing and advertising department's work, there might coincide initial disconnect which could lead to the second stage of 'storming' where the teams challenge each other. It is just throughout the 3rd stage or 'norming' when they would come together to share concepts prior to the team can bring around harmony in the fourth phase 'executing'.

When people are offered with adjustment, they enter stage one and also so there might be feelings like unhappiness, unpredictability, stress, anger, anxiety, rejection and disorientation.The situation at the advertising and marketing department of Merrill Lynchs Acquisition Of Mercury Asset Management is comparable so Lewis can obtain comfortable with the suggestion that it is not amazing habits. It is during this phase that Lewis will have to offer support to the division so that they can discover a sense of direction. It can be seen just how Krasnow has already made this shift less complicated by making Lewis obtain involved in the division a year prior to his real separation.
Vrio Analysis
Abraham Maslow in his Concept of 'Demands Power structure' (appendix 5) has talks about the relevance of 'security requires as being a reduced level requirement of a human for activating inspiration. As seen in the pyramid shared in appendix 3, we can see how 'the need to really feel secure and out of danger' is at the second degree of needs. Prior to a staff member can be made to create psychologically, he requires to have his 'Physiological 'as well as 'Safety' requires met.

SWOT Analysis for Merrill Lynchs Acquisition Of Mercury Asset Management Case Study



Effects of Analysis.

The OB analysis has looked at numerous concepts to understand just how to manage the current scenario at hand. The adhering to 3 alternatives have actually been proposed to aid Lewis deal with the organizational difficulties in the advertising division. Each of these alternatives has actually been proposed for alleviating the change needed to bring the advertising department in accordance with the requirements of the market as well as for making the social change that would certainly comply with as soon as the current leader leaves.

Integration of advertising and marketing functions. Dividing Adverting and Manufacturing features. Assimilation of Advertising with Operations.

Evaluation of Alternatives.

Judith Shapiro who has actually earlier been talked to by Lewis during the earlier merger days has competence in business-to-business marketing along with company and retail advertising experience. As soon as Krasnow leaves, Lewis can work with Shapiro as an EVP for marketing to take care of both advertising and also advertising and marketing functions.

The benefit of this strategy is that it will certainly incorporate the two features while reducing the requirement for working with an extra resource for marketing. In addition to this, Lewis would be heading the advertising and marketing division and also in any case her substitute would certainly be required for the existing duty that she is performing. The drawback of this option is that external hiring may cause bitterness from internal employees that may be considering the position of EVP after Lewis takes control of Krasnow's placement.

Separating Adverting and Manufacturing: Provided the affordable pressures and high top quality work required from the advertising and marketing company, it is advised that Lewis needs to permit the manufacturing device to be a different feature from the advertising system. Since many advertising and marketing agencies had these two functions as different devices, it makes more feeling to follow the standard.

Integration of Marketing with Procedures: Considering that Lewis is already dealing with the advertising as well as operations departments at the same time; it makes sense to incorporate the two features considering that she has been successfully taking care of both ends. The truth that the two divisions currently have major differences over appropriation of sources recommends that this integration might have the ability to cause harmony especially as Lewis would be heading both ends.However there are numerous drawbacks of this step specifically as it would certainly 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 divisions would be culturally varied. Lewis may not be able to use one kind of leadership style to both departments which could result in ineffectiveness in either one of the two features.

Recommendation.



An evaluation of the 3 alternatives shows that combination of advertising and marketing and procedures would not be a feasible relocation due to the substantial differences in between the two divisions despite the reality that currently Lewis is dealing with both. While separation of the production feature might have been a positive relocation for the marketing department, the truth that it would certainly imply positioning a third feature under Lewis's wing means this ought to be prevented.

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

Advertising and Marketing features would certainly be merged.

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

Manufacturing feature will certainly continue to be part of marketing under marketing function.

Lewis will divide herself from operations.

A democratic management design with worker empowerment will certainly be made use of in advertising and marketing department.

Open door policy as well as emphasis on cross departmental interaction will be focused on eliminating dissonance.

Contingency plan.

If the combination does not work out as planned, a contingency plan would certainly adhere to which would certainly divide the manufacturing function from the marketing feature to decrease the lots on the SVP of advertising and marketing. In case Judith Shapiro does not obtain hired, Lewis will be heading the advertising department without an SVP. Because case the manufacturing feature will absolutely be divided by putting it under an SVP manufacturing.