Oriflame Sa A Case Study Solution


Home >> Harvard >> Oriflame Sa A >>

Oriflame Sa A Case Study Analysis

Background and Facts

Oriflame Sa A an office materials seller for tiny as well as average sized businesses has actually just recently been associated with planning for a merger with its rival Residence Deport, which has impacted efficiency degrees in departmentswith the senior supervisor involved in lawful problems presented by the federal Profession Payment. With the Advertising 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 near future. With obstacles in the form of a possible cultural adjustment and reduced staff member spirits, the company needs a complete reengineering initiative at the advertising and marketing department.

Problem Statement
Porter's 5 Forces Analysis
The possible social change at the marketing division of Oriflame Sa A is enhancing uncertainty in the working environment leading to numerous obstacles for the Jeannie Lewis that would be changing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant duty in affecting critical decisions since Stapes Inc. needed to desert its plans of merging with Workplace Deport after the Federal Profession Compensation's treatment while doing so. Provided the truth that the store has a global existence with branches in UK, U.S.A., Canada and also Germany, political consider each of these nations might have the ability to impact efficiency or critical goals. Federal Profession Compensation's antitrust fit versus the merger used up useful time of the organization's senior administration recommending that 'political' factors can have severe implications for an international organisation.

Economic Factors: Economic factors such as the appearance of small companies in the global circumstance recommend that Oriflame Sa A is prospering in an environment where there is prospective development of organisations. Reality that store clients are mostly looking for workplace supplies for house offices recommends that the market has a climbing pattern of entrepreneurs and also home based businesses.

Social factors: Social patterns in the economic situation show that clients are seeking ease along with eye-catching prices. Market research demonstrates how the consumer for Oriflame Sa A lacks awareness about locating solutions which can use a mix of benefit and also affordable.

Technological factors: Innovation plays a crucial function in Oriflame Sa A's business method particularly as the organization is piloting Technology centers which would supply technology sales and support in the form of memory upgrades, outer setups. (Summary of PARASITE in appendix 2).

OB Issues and also Effects.

A number of underlying Organizational Behavior concerns can be seen in Oriflame Sa A's case as highlighted in this section.

Concerns about cultural modification: There is apprehension concerning a cultural change that would certainly occur when Todd Krasnow leaves from his position as the Exec Vice Head Of State of Marketing with the majority of the personnel already showing discontent over this prospective step. This predicted modification has created tension in the office which has actually been paired with the past anxiety of preparing the firm for a potential merging with Residence Deport.
Pest Analysis
Stressful Work Environment for Newcomers: There is shortage of personnel that can match the stressful atmosphere of a hectic company. Not just does this bring about trouble in finding the ideal individuals, it puts tension on brand-new hires as can not endure the pace as well as pressure that the company anticipates them to birth.

Twin Coverage Lines: Newcomers find this organizational culture cumbersome as well as tough to cope with particularly as dotted line partnerships are suggested to be weak as a whole and objective setup and also performance evaluation is still done by the solid line manager. This indicates that beginners could shed clearness regarding their particular functions as well as purposes specifically as dotted line reporting does not maintain them in straight communication with the strong line supervisors.

Resentment From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower rather than Bridget Coles despite the fact that it had actually been hypothesized that the latter would take Krasnow's setting came as an impact to her morale. Lewis may have been capable as well as 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 & Work Insecurity: Fear as well as instability can be determined as 2 significant issues that Lewis would be managing particularly as the merger has actually currently be terminated and also two senior execs of the advertising department would certainly be leaving. The entire obligation of the division would be dropping on Lewis's shoulders that would not just be in charge of brining concerning a cultural change however would likewise have to prove herself in her new function.

Incompatible Monitoring Design of Leader: Lewis's monitoring design and its conflict with the advertising and marketing division's duty can also be viewed as an OB obstacle specifically as she has been utilized to handling concerns in the operations division where personnel are taught to concentrate on procedures and obtain them right. The advertising division on the other hand can be viewed as a group of people who are used to being supported by Krasnow that concentrated much more on outcome than processes.

Interdepartmental Disputes: Interdepartmental differences in between 3 departments, advertising, merchandizing and also procedures respectively over the allowance of the advertising mix can be identified as another OB worry. Although the advertising and marketing division does not share the same vision as the various other 2 divisions regarding the aloocation of the advertising and marketing mix twoards promos and also advertsing, the merchandizing as well as operations departments do not concur over the advertising and marketing mix allowance among one another either.

Fragmentation in Advertising And Marketing Department: Fragmentation in between the marketing and advertising divisions can be identified as another OB problem which could require additional attention. The fact that the marketing and advertising sections in the marketing department are separated is stopping both departments from acquiring from each various other's experience and expertise. Combination of advertising with retailing and procedures would certainly come to be harder if the advertising division itself is broken down which can be another prospective OB issue.

Oriflame Sa A Analysis

Various concepts have been used to describe the circumstances to obtain more clarity concerning the scenario handy.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Theory X, most supervisors believe that staffs are passive and careless, have little ambition and withstand change. The scenario at Oriflame Sa A is not entirely adhering to Theory X, it can be seen that brand-new hires are finding this environment instead demanding which may ultimately lead to a higher disposition of the administration in the direction of Theory X. Even while evaluating Lewis's administration style, theory X may have been suitable in the procedures division to some level however the Advertising and marketing division would call for dependence on Theory Y in order to obtain the creativity and creativity from the teams.

Tuckman's Synergy Theory: As much as Lewis's problem about bringing harmony between the advertising and marketing as well as advertising division is concerned, this would originally lead to contrast as gone over by Bruce Tuckman in his 'Synergy Theory'. By combining the advertising and marketing and advertising and marketing department's job, there may be the very same preliminary separate which could lead to the 2nd phase of 'storming' where the groups challenge one an additional.

Bridges' Transition Design: Based On William Bridge's theory (appendix 4), individuals are quite uneasy with modification, which is evident by the scenario at Oriflame Sa A The circumstance can be viewed as a normal training course of life if is researched based on Bridge's theory where he describes that individuals experience 3 stages of shift when they experience change. 'Ending, shedding as well as Releasing', The Neutral Zone and 'The New Beginning' (Bridges, 2004). When people exist with change, they get in phase one and so there might be feelings like unhappiness, uncertainty, aggravation, anger, concern, rejection and also disorientation.The circumstance at the advertising and marketing department of Oriflame Sa A is similar so Lewis can get comfy with the suggestion that it is not extraordinary actions. In the second stage, there may be a requirement to link the void in between the brand-new as well as old culture so Lewis might have to face this challenge as soon as Krasnow leaves. There might be low morale and reduced productivity at this stage which should not be taken as a setback. It is during this stage that Lewis will need to provide support to the department to ensure that they can find a sense of direction. It can be seen exactly how Krasnow has actually currently made this change simpler by making Lewis get associated with the division a year before his actual separation. Based on Bridges' Model, stage three will certainly cause visibility to knowing, High power and also dedication as people will embrace the adjustment (Bridges, 2004).
Vrio Analysis
Abraham Maslow in his Theory of 'Demands Power structure' (appendix 5) has goes over the importance of 'protection needs as being a reduced level requirement of a human for activating motivation. As seen in the pyramid shared in appendix 3, we can see how 'the demand to really feel safe and also out of danger' is at the second level of requirements. Before a worker can be made to develop psychologically, he requires to have his 'Physiological 'and also 'Safety' requires met.

SWOT Analysis for Oriflame Sa A Case Study

Implication of Analysis.

The OB analysis has looked at different concepts to comprehend how to handle the present scenario handy. The complying with three alternatives have been suggested to aid Lewis deal with the business difficulties in the advertising division. Each of these options has actually been recommended for reducing the shift needed to bring the advertising and marketing department in line with the needs of the marketplace and also for making the social modification that would certainly adhere to when the present leader leaves.

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

Assessment of Alternatives.

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

The advantage of this method is that it will integrate both features while lowering the need for hiring an extra source for marketing. Lewis would be heading the marketing department and also in any type of case her replacement would be required for the current duty that she is doing. The disadvantage of this alternative is that external hiring might produce resentment from inner personnel that might be eying the position of EVP after Lewis takes control of Krasnow's position.

Separating Adverting and also Production: Offered the competitive stress and also high top quality job required from the advertising and marketing company, it is advised that Lewis needs to permit the production system to be a separate function from the marketing unit. Considering that many marketing companies had these 2 functions as separate devices, it makes even more feeling to comply with the norm.

Assimilation of Marketing with Workflows: Considering that Lewis is already taking care of the advertising and marketing and operations divisions simultaneously; it makes sense to incorporate both features since she has actually been successfully taking care of both ends. The reality that the two divisions currently have significant distinctions over appropriation of resources suggests that this integration might have the ability to bring about harmony specifically as Lewis would certainly be heading both ends.However there are numerous negative aspects of this action specifically as it would place way too much worry over Lewis's shoulders. The reality that Lewis needs to adapt her management design for the marketing department recommends that these two departments would be culturally diverse. Lewis might not be able to apply one kind of management style to both departments which could result in ineffectiveness in either one of the 2 functions.


An examination of the 3 alternatives suggests that combination of advertising and marketing and also procedures would not be a possible step due to the substantial differences between the two departments although that currently Lewis is dealing with both. While splitting up of the manufacturing function might have been a desirable action for the advertising and marketing division, the truth that it would certainly imply positioning a third feature under Lewis's wing means this ought to be prevented. The integration of the marketing division is the most effective option in terms of getting the optimal results from the division. An action plan for this choice is discussed listed below.

Action Plan.
Lewis will take over the duty of EVP Advertising after Krasnow leaves.

Advertising and Marketing features would certainly be merged.

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

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

Lewis will separate herself from operations.

An autonomous management style with staff member empowerment will be made use of in advertising division.

Open up door plan as well as emphasis on cross department interaction will be targeted at eliminating dissonance.

Backup strategy.

If the combination does not work out as planned, a backup plan would certainly follow which would separate the manufacturing feature from the advertising and marketing feature to lower the load on the SVP of marketing and advertising. In case Judith Shapiro does not get worked with, Lewis will be heading the advertising department without an SVP. Because case the production function will certainly be separated by positioning it under an SVP production.