Menu

Merrill Lynchs Asset Write Down Case Study Solution

CASE STUDY

Home >> Harvard >> Merrill Lynchs Asset Write Down >>

Merrill Lynchs Asset Write Down Case Study Help

Background and Facts

Merrill Lynchs Asset Write Down an office supplies store for tiny and average sized businesses has actually recently been associated with preparing for a merging with its rival Residence Deport, which has influenced efficiency degrees in departmentswith the senior supervisor associated with lawful complications presented by the federal Profession Commission. With the Advertising and marketing Head advancing the news of his separation from the firm in one year, Jeannie Lewis, the present head of procedures has actually been asked to take the duty in the future. With difficulties in the form of a potential cultural change and low staff member morale, the company wants a complete reengineering initiative at the advertising and marketing department.

Trouble Statement
Porter's 5 Forces Analysis
The potential cultural modification at the marketing division of Merrill Lynchs Asset Write Down is boosting uncertainty in the working environment causing numerous 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 major duty in influencing tactical choices considering that Stapes Inc. had to desert its plans of merging with Office Deport after the Federal Trade Payment's treatment at the same time. Given the truth that the store has a global existence with branches in UK, U.S.A., Canada and Germany, political consider each of these countries might be able to impact performance or critical goals. Federal Trade Commission's antitrust suit against the merger occupied beneficial time of the company's elderly management recommending that 'political' factors can have significant ramifications for a worldwide business.

Economic Factors: Financial factors such as the emergence of small companies in the international situation recommend that Merrill Lynchs Asset Write Down is flourishing in a setting where there is prospective development of businesses. Truth that shop consumers are mainly looking for office supplies for residence workplaces suggests that the market has a climbing pattern of entrepreneurs as well as house based companies.

Social factors: Social fads in the economic situation show that clients are searching for comfort along with appealing costs. Market research demonstrates how the consumer for Merrill Lynchs Asset Write Down lacks understanding concerning discovering solutions which can supply a mix of convenience as well as inexpensive.

Technical factors: Modern technology plays an important role in Merrill Lynchs Asset Write Down's business approach especially as the organization is piloting Innovation centers which would certainly provide technology sales and also support in the form of memory upgrades, outer installments. (Recap of BUG in appendix 2).

OB Issues and Manifestations.

A number of underlying Business Habits concerns can be seen in Merrill Lynchs Asset Write Down's case as highlighted in this area.

Worries concerning cultural change: There is uneasiness about a social change that would happen when Todd Krasnow leaves from his setting as the Executive Vice President of Advertising And Marketing with most of the team member already revealing discontent over this possible step. This expected change has produced anxiety in the workplace which has been combined with the past tension of preparing the firm for a possible merger with Residence Deport.
Pest Analysis
Stressful Task Environment for Newcomers: There is shortage of workers that can match the difficult environment of a fast-paced company. Not just does this cause difficulty in finding the right people, it places stress and anxiety on new hires as can not hold up against the rate and pressure that the organization expects them to bear.

Double Reporting Lines: Newcomers discover this business culture troublesome and tough to manage specifically as dotted line partnerships are indicated to be weaker as a whole and objective setting as well as efficiency examination is still done by the strong line manager. This suggests that newcomers could shed clearness concerning their particular functions and also goals especially as populated line reporting does not keep them in direct communication with the solid line supervisors.

Resentment From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower instead of Bridget Coles although it had been speculated that the last would take Krasnow's placement came as an impact to her spirits. Lewis may have been capable and proper for the job but the fact that Kransnow's departure would make Coles a direct report to Lewis may have been the reason for Coles' resignation from solutions.

Fear & Work Instability: Worry and also insecurity can be identified as two major worries that Lewis would be dealing with especially as the merger has actually currently be terminated and also two senior executives of the advertising department would certainly be leaving. The entire obligation of the division would be falling on Lewis's shoulders who would certainly not simply supervise of brining regarding a cultural modification however would certainly additionally need to confirm herself in her brand-new function.

Inappropriate Monitoring Design of Leader: Lewis's management design and also its incompatibility with the advertising division's function can likewise be viewed as an OB challenge specifically as she has actually been utilized to managing concerns in the procedures division where personnel are shown to focus on procedures and also get them right. The advertising department on the other hand can be viewed as a team of individuals who are utilized to being supported by Krasnow that focused much more on result than procedures.

Interdepartmental Differences: Interdepartmental disagreements between 3 divisions, advertising and marketing, merchandizing as well as procedures respectively over the allotment of the advertising mix can be recognized as another OB worry. Although the advertising and marketing department does not share the very same vision as the other 2 divisions pertaining to the aloocation of the advertising and marketing mix twoards promotions and also advertsing, the merchandizing and procedures departments do not concur over the advertising mix appropriation amongst one another either.

Disintegration in Advertising And Marketing Department: Fragmentation in between the marketing and advertising divisions can be recognized as one more OB concern which might need additional attention. The fact that the advertising and marketing areas in the advertising and marketing division are detached is stopping both divisions from gaining from each various other's experience and also experience. Assimilation of advertising and marketing with merchandising and procedures would certainly become more difficult if the advertising and marketing department itself is broken down which can be one more prospective OB worry.

Merrill Lynchs Asset Write Down Analysis

Numerous concepts have actually been made use of to describe the conditions to obtain further clearness about the scenario at hand.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Theory X, the majority of supervisors believe that juniors are passive and also careless, have little passion and also withstand modification. The difficult variation of this theory highlighted coercion, limited controls, dangers and also punishments. Gradually it creates reduced efficiency, refined sabotage and also competition (Deal, 2003). Although the scenario at Merrill Lynchs Asset Write Down is not totally following Concept X, it can be seen that brand-new hires are locating this environment instead demanding which may at some point bring about a better inclination of the management towards Theory X. As per McGregor's promoted sight, which he called Theory Y, the crucial task of the administration is to set up organizational problems so that people can accomplish their own goals best by directing their efforts in the direction of business rewards. If individuals discover no satisfaction in their job, the monitoring would certainly have little choice however to depend on theory X and also outside control (Offer, 2003). Also while examining Lewis's management style, theory X might have appropriated in the operations department somewhat however the Advertising and marketing department would need dependence on Theory Y so as to get the creative thinking as well as originality from the groups.

Tuckman's Synergy Theory: As much as Lewis's problem about bringing consistency in between the advertising and also marketing division is concerned, this would initially lead to clash as gone over by Bruce Tuckman in his 'Synergy Theory'. By combining the advertising and also marketing division's work, there may be the exact same preliminary detach which might lead to the 2nd phase of 'storming' where the teams challenge one another.

When people are presented with adjustment, they enter phase one and so there might be emotions like sadness, unpredictability, irritation, anger, fear, rejection and also disorientation.The circumstance at the advertising and marketing department of Merrill Lynchs Asset Write Down is similar so Lewis can obtain comfy with the suggestion that it is not extraordinary habits. It is throughout this stage that Lewis will certainly have to offer advice to the division so that they can locate a sense of instructions. It can be seen just how Krasnow has already made this transition easier by making Lewis obtain entailed in the division a year before his real departure.
Vrio Analysis
Maslow's Demand hierarchy: The OB problem related to insecurity at the office has actually been triggered first of all by the change in administration as well as second of all by the reality that the merging will no more be started. Abraham Maslow in his Theory of 'Demands Hierarchy' (appendix 5) has discusses the relevance of 'safety and security needs as being a lower level need of a human for causing inspiration. As seen in the pyramid shared in appendix 3, we can see exactly how 'the demand to feel secure as well as safe' is at the second level of needs. Before an employee can be made to establish psychologically, he needs to have his 'Physical 'as well as 'Safety' needs met. This shows that unless the personnel are made to feel secure about their present employment status in Merrill Lynchs Asset Write Down they may not get to 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Merrill Lynchs Asset Write Down Case Study



Effects of Analysis.

The OB analysis has considered numerous concepts to comprehend how to cope with the current circumstance at hand. The complying with 3 options have been proposed to aid Lewis take care of the business obstacles in the marketing division. Each of these options has been suggested for alleviating the shift required to bring the marketing department according to the needs of the marketplace and also for making the social change that would comply with when the existing leader leaves.

Combination of advertising and marketing features. Dividing Adverting and Manufacturing features. Integration of Advertising And Marketing with Operations.

Examination of Alternatives.

Judith Shapiro who has earlier been spoken with by Lewis during the earlier merger days has experience in business-to-business advertising and marketing along with company and also retail advertising and marketing experience. When Krasnow leaves, Lewis can employ Shapiro as an EVP for marketing to deal with both advertising and marketing and marketing features.

The benefit of this technique is that it will certainly incorporate the two functions while minimizing the need for working with an additional source for advertising and marketing. In addition to this, Lewis would certainly be heading the advertising department and also regardless her substitute would certainly be required for the existing function that she is executing. The drawback of this option is that exterior hiring might produce animosity from inner employees who may be eying the placement of EVP after Lewis takes control of Krasnow's position.

Separating Adverting and also Manufacturing: Given the affordable stress and also high quality job called for from the advertising firm, it is recommended that Lewis must permit the manufacturing system to be a separate function from the advertising unit. Since the majority of advertising companies had these two features as different devices, it makes more feeling to adhere to the standard.

Assimilation of Advertising with Workflows: Because Lewis is already looking after the advertising and marketing and operations departments at the same time; it makes good sense to integrate both features since she has actually been successfully taking care of both ends. The fact that both departments currently have significant differences over appropriation of resources suggests that this combination might have the ability to bring about consistency especially as Lewis would be heading both ends.However there are numerous negative aspects of this relocation specifically as it would certainly place excessive concern over Lewis's shoulders. The fact that Lewis needs to adjust her management design for the advertising and marketing department recommends that these two divisions would be culturally diverse. Lewis might not be able to apply one type of management design to both divisions which can result in inadequacy in either one of the two features.

Recommendation.



An analysis of the three alternatives suggests that integration of advertising and marketing as well as procedures would not be a feasible relocation as a result of the huge differences in between the two departments despite the fact that presently Lewis is handling both. While separation of the manufacturing feature might have been a beneficial action for the advertising and marketing department, the reality that it would mean positioning a third function under Lewis's wing suggests this need to be stayed clear of. The integration of the marketing division is the best alternative in regards to getting the optimum results from the department. An activity prepare for this alternative is discussed below.

Action Strategy.
Recommendation
Lewis will take control of the duty of EVP Advertising and marketing after Krasnow leaves.

Advertising and Marketing functions would certainly be merged.

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

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

Lewis will separate herself from operations.

An autonomous management design with employee empowerment will certainly be made use of in advertising department.

Open up door policy and also emphasis on cross departmental communication will be focused on eliminating dissonance.

Backup strategy.

If the assimilation does not work out as planned, a backup plan would adhere to which would certainly divide the production function from the advertising and marketing function to decrease the load on the SVP of advertising and marketing. In case Judith Shapiro does not get employed, Lewis will be heading the marketing department without an SVP. Because case the manufacturing function will certainly be separated by placing it under an SVP manufacturing.