Menu

Penn West Petroleum Ltd Case Study Solution

CASE ANALYSIS

Home >> Harvard >> Penn West Petroleum Ltd >>

Penn West Petroleum Ltd Case Study Analysis

Background and Facts

Penn West Petroleum Ltd an office materials seller for little and also medium sized organisations has recently been associated with preparing for a merging with its competitor Home Deport, which has actually affected performance levels in departmentswith the senior manager involved in lawful issues presented by the federal Profession Payment. With the Marketing Head advancing the news of his separation from the firm in one year, Jeannie Lewis, the existing head of procedures has been asked to take the role in the future. With challenges in the kind of a prospective cultural change as well as low staff member morale, the company wants a full reengineering initiative at the marketing division.

Issue Declaration
Porter's 5 Forces Analysis
The prospective social change at the marketing department of Penn West Petroleum Ltd is raising unpredictability in the workplace leading to different challenges 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 major role in affecting tactical decisions given that Stapes Inc. had to desert its plans of combining with Workplace Deport after the Federal Profession Commission's intervention while doing so. Provided the reality that the shop has a global presence with branches in UK, U.S.A., Canada and also Germany, political factors in each of these countries may be able to affect efficiency or strategic goals. Federal Trade Compensation's antitrust match versus the merging occupied important time of the organization's senior administration suggesting that 'political' factors can have serious effects for a global organisation.

Economic Factors: Economic factors such as the development of local business in the global circumstance recommend that Penn West Petroleum Ltd is growing in an environment where there is possible development of companies. Along with this, truth that shop clients are mainly looking for workplace materials for office recommends that the market has a rising fad of business owners and home based organisations.

Social factors: Social trends in the economic situation reveal that clients are trying to find convenience along with attractive rates. Marketing research demonstrates how the customer for Penn West Petroleum Ltd does not have recognition regarding locating remedies which can offer a combination of convenience and inexpensive.

Technological factors: Technology plays an important function in Penn West Petroleum Ltd's organisation technique particularly as the organization is piloting Innovation centers which would provide innovation sales and also support in the kind of memory upgrades, outer installments. (Summary of PARASITE in appendix 2).

OB Issues as well as Symptoms.

A number of underlying Organizational Behavior concerns can be seen in Penn West Petroleum Ltd's case as highlighted in this area.

Uneasiness regarding social change: There is uneasiness about a cultural modification that would certainly happen as soon as Todd Krasnow leaves from his position as the Exec Vice Head Of State of Marketing with the majority of the personnel already revealing discontent over this possible relocation. This anticipated modification has actually created anxiety in the office which has actually been coupled with the previous tension of preparing the company for a prospective merging with Home Deport.
Pest Analysis
Stressful Task Setting for Newcomers: There is lack of personnel that can match the difficult atmosphere of a busy company. Not just does this result in difficulty in finding the right people, it puts stress and anxiety on brand-new hires as can not stand up to the rate and stress that the company anticipates them to birth.

Dual Reporting Lines: Beginners locate this organizational society troublesome and tough to handle especially as dotted line connections are indicated to be weak generally as well as unbiased setup as well as efficiency evaluation is still done by the strong line manager. This means that novices could shed quality concerning their respective roles and also purposes especially as populated line coverage does not maintain them in straight communication with the strong line managers.

Resentment From Cross Departmental Hiring: Krasnow's choice to make Lewis his successor instead of Bridget Coles despite the fact that it had actually been hypothesized that the latter would certainly take Krasnow's placement came as an impact to her spirits. Lewis might have been qualified as well as ideal for the task however the reality that Kransnow's separation would make Coles a direct report to Lewis may have been the reason for Coles' resignation from services.

Fear & Work Insecurity: Fear and insecurity can be identified as 2 significant concerns that Lewis would be handling particularly as the merging has currently be terminated as well as two elderly executives of the marketing department would be leaving. The whole duty of the department would certainly be dropping on Lewis's shoulders who would not simply be in charge of brining about a social modification but would certainly additionally have to confirm herself in her new duty.

Inappropriate Administration Design of Leader: Lewis's monitoring style and also its incompatibility with the advertising and marketing division's function can additionally be viewed as an OB obstacle specifically as she has been utilized to handling problems in the procedures department where employees are taught to concentrate on processes and also get them right. The marketing department on the other hand can be seen as a group of people that are used to being supported by Krasnow that focused much more on result than procedures.

Interdepartmental Differences: Interdepartmental arguments in between 3 divisions, marketing, merchandizing and also procedures respectively over the allocation of the advertising and marketing mix can be determined as one more OB issue. The marketing department does not share the very same vision as the various other 2 departments pertaining to the aloocation of the marketing mix twoards promotions and also advertsing, the merchandizing and also procedures divisions do not concur over the marketing mix allocation amongst one an additional either.

Disintegration in Advertising And Marketing Department: Disintegration in between the marketing and advertising departments can be recognized as one more OB concern which can require additional interest. The reality that the advertising and marketing sections in the marketing department are disconnected is preventing both departments from obtaining from each various other's experience and also competence. Assimilation of advertising with merchandising and also operations would become more difficult if the marketing division itself is degenerated which can be one more potential OB concern.

Penn West Petroleum Ltd Analysis

Various concepts have actually been made use of to clarify the conditions to get further clarity regarding the situation handy.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, a lot of managers think that subordinates are easy and lazy, have little passion and also resist change. The scenario at Penn West Petroleum Ltd is not totally following Theory X, it can be seen that new hires are locating this atmosphere instead stressful which might ultimately lead to a greater disposition of the management towards Theory X. Even while assessing Lewis's administration design, theory X may have been ideal in the operations department to some degree but the Advertising and marketing division would certainly call for dependence on Theory Y in order to obtain the creative thinking as well as originality from the groups.

Tuckman's Synergy Concept: As far as Lewis's problem about bringing consistency between the marketing and also advertising department is worried, this would originally lead to clash as discussed by Bruce Tuckman in his 'Synergy Concept'. By combining the advertising and marketing and also advertising and marketing department's work, there may be the same preliminary detach which can lead to the 2nd phase of 'storming' where the teams challenge one another.

Bridges' Shift Design: Based On William Bridge's theory (appendix 4), individuals are quite uneasy with modification, which is noticeable by the situation at Penn West Petroleum Ltd The scenario can be seen as a normal course of life if is examined as per Bridge's theory where he discusses that people experience 3 phases of shift when they experience adjustment. 'Closing, shedding as well as Releasing', The Neutral Zone and 'The New Starting' (Bridges, 2004). When individuals are presented with modification, they get in phase one and so there may be feelings like despair, uncertainty, disappointment, anger, anxiety, denial and also disorientation.The circumstance at the advertising division of Penn West Petroleum Ltd is comparable so Lewis can obtain comfy with the concept that it is not amazing behavior. In the second phase, there may be a requirement to bridge the space between the brand-new and old society so Lewis may have to face this ordeal when Krasnow leaves. There may be low morale and reduced efficiency at this phase which need to not be taken as an obstacle. It is throughout this phase that Lewis will need to provide guidance to the department so that they can find an orientation. It can be seen how Krasnow has actually already made this shift less complicated by making Lewis get involved in the department a year before his real departure. Based on Bridges' Model, phase three will certainly produce visibility to understanding, High energy as well as dedication as individuals will certainly accept the modification (Bridges, 2004).
Vrio Analysis
Maslow's Requirement hierarchy: The OB concern pertaining to instability at the work environment has been triggered to start with by the adjustment in monitoring and also secondly by the truth that the merging will certainly no more be started. Abraham Maslow in his Concept of 'Needs Hierarchy' (appendix 5) has goes over the importance of 'security requires as being a lower level need of a human for setting off motivation. As seen in the pyramid shared in appendix 3, we can see just how 'the demand to feel safe and safe' goes to the second level of demands. Prior to a staff member can be made to develop psychologically, he needs to have his 'Physiological 'as well as 'Safety' requires fulfilled. This suggests that unless the personnel are made to feel protected about their current employment status in Penn West Petroleum Ltd they may not get to 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Penn West Petroleum Ltd Case Study



Ramification of Analysis.

The OB analysis has actually looked at different concepts to comprehend just how to manage the existing situation at hand. The adhering to three alternatives have actually been suggested to assist Lewis take care of the organizational difficulties in the advertising and marketing department. Each of these choices has been proposed for reducing the transition needed to bring the advertising division according to the demands of the marketplace and also for making the cultural adjustment that would certainly adhere to once the current leader leaves.

Assimilation of marketing and advertising functions. Separating Adverting and Production functions. Combination of Marketing with Operations.

Evaluation of Alternatives.

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

The benefit of this approach is that it will certainly integrate both features while minimizing the requirement for employing an additional source for advertising and marketing. Lewis would certainly be heading the advertising and marketing department as well as in any type of case her substitute would certainly be required for the existing function that she is executing. The negative aspect of this choice is that external hiring might produce bitterness from inner employees that might be considering the setting of EVP after Lewis takes over Krasnow's placement.

Dividing Adverting as well as Production: Provided the competitive pressures as well as high top quality job required from the advertising and marketing firm, it is advised that Lewis needs to enable the production system to be a different feature from the advertising system. Given that many marketing companies had these 2 functions as different units, it makes more feeling to adhere to the standard.

Assimilation of Advertising And Marketing with Workflows: Since Lewis is already caring for the advertising and operations departments simultaneously; it makes sense to incorporate both functions considering that she has actually been effectively caring for both ends. The reality that both divisions currently have major differences over allotment of sources recommends that this integration may be able to cause consistency particularly as Lewis would certainly be heading both ends.However there are various disadvantages of this action especially as it would certainly place excessive worry over Lewis's shoulders. The truth that Lewis needs to adapt her monitoring style for the advertising division suggests that these two departments would certainly be culturally diverse. Lewis may not be able to apply one type of leadership style to both divisions which can result in ineffectiveness in either one of the two features.

Suggestion.



An analysis of the three options suggests that integration of advertising and marketing as well as procedures would certainly not be a possible move due to the substantial differences between the two divisions in spite of the truth that presently Lewis is handling both. While splitting up of the production function might have been a desirable action for the marketing department, the fact that it would certainly suggest placing a third feature under Lewis's wing implies this need to be avoided.

Action Plan.
Recommendation
Lewis will certainly take control of the function of EVP Advertising and marketing after Krasnow leaves.

Marketing and advertising features would be combined.

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

Manufacturing feature will stay part of advertising and marketing under advertising and marketing function.

Lewis will divide herself from procedures.

An autonomous management style with staff member empowerment will certainly be used in advertising and marketing department.

Open up door plan as well as emphasis on cross departmental interaction will be aimed at getting rid of dissonance.

Contingency strategy.

If the combination does not work out as prepared, a contingency plan would certainly follow which would separate the manufacturing function from the advertising and marketing function to lower the lots on the SVP of advertising and marketing. In case Judith Shapiro does not obtain hired, Lewis will certainly be heading the advertising and marketing department without an SVP. In that case the production feature will most definitely be divided by positioning it under an SVP production.