Petrochina Case Study Solution


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Petrochina Case Study Solution

Background and Facts

Petrochina a workplace supplies store for small as well as average sized companies has recently been associated with planning for a merger with its rival Residence Deport, which has actually affected performance degrees in departmentswith the senior supervisor associated with legal problems presented by the federal Profession Commission. With the Advertising Head advancing the information of his separation from the company in one year, Jeannie Lewis, the existing head of procedures has been asked to take the function in the future. With obstacles in the form of a possible cultural modification and also low worker morale, the company needs a full reengineering initiative at the marketing division.

Problem Declaration
Porter's 5 Forces Analysis
The possible cultural modification at the advertising division of Petrochina is increasing uncertainty in the workplace resulting in different difficulties for the Jeannie Lewis that would certainly be changing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant function in affecting critical decisions since Stapes Inc. needed to abandon its strategies of combining with Workplace Deport after the Federal Profession Payment's intervention while doing so. Provided the truth that the shop has a global visibility with branches in UK, UNITED STATES, Canada and Germany, political factors in each of these nations might be able to influence efficiency or critical objectives. Federal Trade Commission's antitrust fit against the merging occupied useful time of the organization's senior management recommending that 'political' factors can have serious effects for a global company.

Economic Factors: Financial factors such as the emergence of small businesses in the international situation recommend that Petrochina is thriving in an atmosphere where there is prospective growth of companies. Truth that store consumers are mostly looking for workplace materials for residence workplaces suggests that the market has an increasing trend of entrepreneurs and also home based companies.

Social factors: Social fads in the economic situation reveal that clients are seeking convenience along with eye-catching rates. Marketing research demonstrates how the consumer for Petrochina lacks awareness concerning locating services which can offer a mix of ease as well as low costs.

Technological factors: Technology plays a crucial role in Petrochina's company method specifically as the organization is piloting Modern technology facilities which would supply technology sales and assistance in the form of memory upgrades, peripheral installations. (Recap of PARASITE in appendix 2).

OB Issues and also Symptoms.

Several underlying Organizational Actions issues can be seen in Petrochina's case as highlighted in this section.

Uneasiness regarding cultural modification: There is concern concerning a cultural modification that would certainly take place once Todd Krasnow leaves from his setting as the Executive Vice Head Of State of Advertising And Marketing with most of the personnel already revealing unhappiness over this prospective move. This anticipated change has produced tension in the work environment which has actually been paired with the previous stress and anxiety of preparing the company for a prospective merging with House Deport.
Pest Analysis
Stressful Task Setting for Newcomers: There is shortage of workers that can match the stressful atmosphere of a hectic organization. Not only does this cause difficulty in finding the best individuals, it puts anxiety on brand-new hires as can not endure the speed and pressure that the company expects them to bear.

Twin Coverage Lines: Newcomers locate this organizational culture cumbersome and also hard to manage specifically as dotted line relationships are suggested to be weak generally as well as unbiased setup and also performance examination is still done by the strong line supervisor. This suggests that beginners might lose clearness about their corresponding functions as well as objectives specifically as dotted line reporting does not keep them in direct communication with the strong line managers.

Animosity From Cross Departmental Hiring: Krasnow's decision to make Lewis his successor as opposed to Bridget Coles even though it had actually been guessed that the last would take Krasnow's position came as a strike to her spirits. Lewis may have been capable and also appropriate for the job but the fact that Kransnow's separation would certainly make Coles a straight record to Lewis might have been the reason for Coles' resignation from solutions.

Concern & Task Insecurity: Concern and also insecurity can be determined as 2 major concerns that Lewis would be dealing with especially as the merging has now be terminated as well as 2 senior executives of the marketing division would be leaving. The entire responsibility of the department would certainly be falling on Lewis's shoulders who would not simply be in charge of brining about a social adjustment yet would likewise have to show herself in her brand-new role.

Incompatible Monitoring Style of Leader: Lewis's management design as well as its conflict with the advertising department's role can also be seen as an OB obstacle specifically as she has actually been used to managing problems in the procedures department where workers are shown to concentrate on processes as well as get them. The advertising and marketing department on the other hand can be seen as a group of people that are used to being nurtured by Krasnow that focused a lot more on output than processes.

Interdepartmental Disagreements: Interdepartmental disputes between 3 divisions, advertising, merchandizing and also procedures respectively over the allotment of the advertising mix can be recognized as another OB worry. Although the advertising and marketing division does not share the very same vision as the other two divisions regarding the aloocation of the advertising mix twoards promotions as well as advertsing, the merchandizing and procedures divisions do not concur over the marketing mix appropriation amongst each other either.

Fragmentation in Marketing Department: Fragmentation between the advertising and marketing divisions can be identified as an additional OB problem which could need further attention. The fact that the advertising and marketing areas in the advertising division are disconnected is stopping both divisions from getting from each other's experience and proficiency. Combination of advertising and marketing with merchandising and operations would come to be harder if the marketing department itself is broken down which can be one more prospective OB issue.

Petrochina Analysis

Numerous concepts have been utilized to discuss the scenarios to get additional clarity regarding the situation available.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Theory X, a lot of managers believe that staffs are easy and also lazy, have little passion as well as withstand adjustment. The tough variation of this concept highlighted coercion, tight controls, threats and punishments. Over time it generates low performance, subtle sabotage and rivalry (Bargain, 2003). The circumstance at Petrochina is not totally adhering to Theory X, it can be seen that brand-new hires are discovering this setting rather difficult which might ultimately lead to a greater disposition of the management in the direction of Theory X. As per McGregor's supported view, which he called Theory Y, the necessary task of the administration is to arrange business problems to make sure that people can attain their very own goals best by routing their efforts in the direction of business benefits. If individuals find no fulfillment in their work, the administration would have little option but to rely upon concept X as well as exterior control (Deal, 2003). Also while evaluating Lewis's administration style, theory X might have been suitable in the procedures division somewhat but the Advertising department would certainly require dependence on Concept Y so as to get the creative thinking and also originality from the teams.

Tuckman's Teamwork Theory: As much as Lewis's problem regarding bringing harmony in between the marketing and also marketing department is worried, this would initially lead to conflict as talked about by Bruce Tuckman in his 'Synergy Concept'. By incorporating the advertising as well as advertising and marketing division's job, there may be the very same initial detach which can lead to the 2nd phase of 'storming' where the groups challenge one an additional.

When individuals are provided with adjustment, they go into stage one as well as so there might be feelings like sadness, unpredictability, irritation, anger, concern, denial and disorientation.The situation at the advertising and marketing division of Petrochina is comparable so Lewis can obtain comfortable with the concept that it is not amazing behavior. It is during this stage that Lewis will certainly have to provide support to the division so that they can locate a feeling of instructions. It can be seen exactly how Krasnow has actually currently made this shift less complicated by making Lewis obtain entailed in the department a year before his actual separation.
Vrio Analysis
Maslow's Requirement hierarchy: The OB issue pertaining to insecurity at the office has actually been activated firstly by the modification in administration and secondly by the truth that the merger will certainly no more be initiated. Abraham Maslow in his Theory of 'Requirements Power structure' (appendix 5) has discusses the relevance of 'safety and security requires as being a lower degree demand of a human for setting off inspiration. As seen in the pyramid shared in appendix 3, we can see how 'the requirement to really feel secure and also unharmed' is at the second degree of requirements. Before an employee can be made to create emotionally, he needs to have his 'Physiological 'and 'Safety' requires met. This suggests that unless the employees are made to feel safe about their current work status in Petrochina they might not get to 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Petrochina Case Study

Ramification of Analysis.

The OB analysis has taken a look at various theories to understand how to handle the current circumstance at hand. The following three alternatives have been proposed to assist Lewis deal with the business obstacles in the marketing department. Each of these alternatives has been proposed for relieving the shift needed to bring the advertising division in accordance with the requirements of the market and also for making the social adjustment that would certainly comply with as soon as the existing leader leaves.

Integration of marketing and advertising features. Separating Adverting and also Production features. Assimilation of Marketing with Workflow.

Analysis of Alternatives.

Integration of Marketing & Advertising And Marketing Functions: The internal advertising firm of Petrochina is currently strength for the organization in regards to saving up on expenses related to marketing and also promotion. Since no new recruitment has been done after Bridget Cole's separation with the reporting line being straight appointed to Krasnow for the marketing feature, this is a positive possibility for incorporating the marketing and advertising features. Judith Shapiro who has actually earlier been spoken with by Lewis during the earlier merging days has experience in business-to-business advertising along with agency and retail advertising and marketing experience. As soon as Krasnow leaves, Lewis can work with Shapiro as an EVP for marketing to take care of both advertising and marketing functions.

The advantage of this technique is that it will integrate the two functions while reducing the demand for employing an additional source for marketing. Lewis would be heading the advertising department and in any kind of case her substitute would certainly be required for the existing duty that she is performing. The negative aspect of this alternative is that external hiring may produce animosity from inner personnel who might be considering the setting of EVP after Lewis takes control of Krasnow's position.

Dividing Adverting and also Production: Offered the affordable stress and also excellent quality work needed from the advertising agency, it is advised that Lewis ought to enable the production device to be a separate feature from the advertising and marketing unit. Given that the majority of ad agency had these two functions as separate units, it makes more sense to adhere to the standard. Along with this, both features might have the ability to focus on their core turns on much more successfully. Nevertheless, the negative aspect of this strategy would be that additional expenses would certainly have to be borne for establishing separate manufacturing functions. In addition to this, a manufacturing head may have to be worked with which might raise expenses for the company.

Assimilation of Marketing with Operations: Since Lewis is already caring for the advertising and procedures departments simultaneously; it makes sense to integrate both functions considering that she has been successfully dealing with both ends. The fact that the two departments already have significant distinctions over appropriation of resources recommends that this combination might be able to bring about consistency particularly as Lewis would be heading both ends.However there are numerous drawbacks of this move particularly as it would certainly put way too much concern over Lewis's shoulders. The truth that Lewis needs to adapt her management design for the advertising division recommends that these two divisions would be culturally diverse. In addition to this, Lewis may not have the ability to use one sort of leadership style to both departments which might lead to inadequacy in either among the two functions.


An assessment of the three alternatives indicates that integration of advertising and marketing as well as operations would not be a viable relocation due to the huge differences between the two divisions regardless of the truth that currently Lewis is handling both. While separation of the manufacturing function might have been a beneficial step for the advertising and marketing department, the fact that it would indicate placing a third function under Lewis's wing indicates this should be stayed clear of.

Activity Plan.
Lewis will take control of the duty of EVP Marketing after Krasnow leaves.

Marketing and advertising features would certainly be merged.

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

Production feature will certainly remain part of advertising under marketing function.

Lewis will certainly divide herself from operations.

An autonomous leadership design with employee empowerment will certainly be made use of in advertising division.

Open up door policy as well as emphasis on cross departmental communication will be targeted at getting rid of disharmony.

Backup plan.

If the assimilation does not exercise as prepared, a backup plan would adhere to which would certainly separate the production feature from the marketing feature to decrease the load on the SVP of advertising and marketing. In case Judith Shapiro does not get hired, Lewis will certainly be heading the advertising department without an SVP. Because case the production function will definitely be divided by positioning it under an SVP manufacturing.