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Providian Financial Corporation Case Study Analysis

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Providian Financial Corporation Case Study Help

Background and Facts

Providian Financial Corporation a workplace materials store for small and also average sized services has lately been involved in preparing for a merging with its competitor Home Deport, which has actually affected efficiency degrees in departmentswith the elderly manager associated with legal difficulties presented by the federal Profession Compensation. With the Marketing Head putting forward the news of his departure from the business in one year, Jeannie Lewis, the existing head of operations has been asked to take the duty in the future. With difficulties in the form of a possible cultural modification as well as reduced worker morale, the company requires a complete reengineering effort at the advertising division.

Problem Statement
Porter's 5 Forces Analysis
The prospective social change at the advertising and marketing department of Providian Financial Corporation is enhancing uncertainty in the workplace bring about various challenges for the Jeannie Lewis who would be replacing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant role in influencing strategic choices since Stapes Inc. needed to abandon its plans of combining with Workplace Deport after the Federal Trade Commission's treatment in the process. Offered the truth that the store has an international existence with branches in UK, U.S.A., Canada as well as Germany, political factors in each of these nations may be able to affect efficiency or strategic goals. Federal Profession Compensation's antitrust fit versus the merging used up valuable time of the organization's senior management recommending that 'political' factors can have major ramifications for an international service.

Economic Factors: Financial factors such as the emergence of small businesses in the global circumstance recommend that Providian Financial Corporation is thriving in an atmosphere where there is possible growth of organisations. In addition to this, fact that store clients are mostly searching for workplace products for home offices recommends that the market has an increasing trend of entrepreneurs and also home companies.

Social factors: Social patterns in the economic climate reveal that clients are seeking convenience in addition to eye-catching costs. Marketing research demonstrates how the customer for Providian Financial Corporation lacks recognition about finding solutions which can supply a combination of comfort and low costs.

Technical factors: Modern technology plays a crucial duty in Providian Financial Corporation's organisation strategy particularly as the company is piloting Innovation centers which would certainly use modern technology sales as well as assistance in the type of memory upgrades, outer setups. (Recap of BUG in appendix 2).

OB Issues as well as Manifestations.

Several underlying Organizational Habits issues can be seen in Providian Financial Corporation's case as highlighted in this section.

Apprehensions regarding cultural adjustment: There is uneasiness about a cultural modification that would happen as soon as Todd Krasnow leaves from his setting as the Executive Vice Head Of State of Advertising And Marketing with most of the personnel currently showing unhappiness over this potential relocation. This predicted change has created anxiety in the office which has been paired with the previous tension of preparing the company for a potential merging with Residence Deport.
Pest Analysis
Difficult Task Atmosphere for Newcomers: There is lack of workers that can match the demanding atmosphere of a hectic organization. Not only does this lead to difficulty in locating the best people, it places stress and anxiety on new hires as can not endure the speed as well as stress that the company anticipates them to bear.

Double Reporting Lines: Beginners find this organizational society cumbersome as well as tough to handle specifically as populated line relationships are implied to be weak as a whole and unbiased setup and also performance analysis is still done by the strong line supervisor. This indicates that beginners could shed quality regarding their particular roles and goals particularly as populated line reporting does not keep them in direct interaction with the solid line supervisors.

Resentment From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower rather than Bridget Coles although it had actually been speculated that the latter would take Krasnow's setting came as an impact to her morale. Lewis might have been qualified and also proper for the task however the truth that Kransnow's departure would make Coles a straight report to Lewis may have been the reason for Coles' resignation from solutions.

Anxiety & Task Insecurity: Concern as well as instability can be identified as 2 significant concerns that Lewis would certainly be handling particularly as the merging has now be terminated as well as 2 senior executives of the marketing division would certainly be leaving. The whole duty of the division would be dropping on Lewis's shoulders who would not just be in charge of brining about a cultural modification however would likewise need to verify herself in her new role.

Incompatible Management Style of Leader: Lewis's management design and its conflict with the marketing department's role can additionally be viewed as an OB challenge especially as she has been utilized to managing issues in the procedures division where personnel are taught to concentrate on processes and also obtain them right. The advertising division on the other hand can be viewed as a group of people that are used to being supported by Krasnow that concentrated extra on result than procedures.

Interdepartmental Disagreements: Interdepartmental disagreements between three departments, advertising, merchandizing as well as procedures specifically over the allowance of the advertising and marketing mix can be recognized as another OB problem. The advertising and marketing division does not share the very same vision as the other 2 departments concerning the aloocation of the advertising mix twoards promos and advertsing, the merchandizing and procedures departments do not agree over the marketing mix appropriation amongst one an additional either.

Fragmentation in Marketing Division: Fragmentation between the marketing and advertising divisions can be identified as one more OB issue which could need more attention. The reality that the marketing and advertising areas in the advertising division are separated is avoiding both departments from getting from each various other's experience and also experience. Assimilation of marketing with retailing and also procedures would end up being more difficult if the advertising department itself is disintegrated which can be an additional potential OB problem.

Providian Financial Corporation Analysis

Different theories have actually been made use of to discuss the circumstances to obtain additional quality about the situation available.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Theory X, a lot of managers think that juniors are passive as well as lazy, have little ambition as well as resist modification. The hard variation of this concept highlighted browbeating, limited controls, hazards and also penalties. In time it creates reduced performance, subtle sabotage and also competition (Bargain, 2003). Although the circumstance at Providian Financial Corporation is not totally following Theory X, it can be seen that new hires are discovering this setting rather stressful which may ultimately bring about a greater disposition of the administration in the direction of Concept X. Based on McGregor's promoted view, which he called Concept Y, the essential job of the monitoring is to set up organizational problems so that people can attain their own goals best by directing their initiatives in the direction of business benefits. If people discover no fulfillment in their job, the management would certainly have little selection yet to count on concept X and also outside control (Deal, 2003). Even while evaluating Lewis's monitoring style, theory X may have appropriated in the operations department somewhat yet the Advertising division would certainly need reliance on Theory Y in order to get the creative thinking as well as originality from the groups.

Tuckman's Teamwork Theory: As much as Lewis's worry about bringing consistency in between the advertising and advertising department is worried, this would originally lead to contrast as talked about by Bruce Tuckman in his 'Teamwork Concept'. By integrating the advertising as well as marketing department's job, there might be the very same initial detach which could lead to the 2nd phase of 'storming' where the teams test one an additional.

When people are offered with change, they enter stage one as well as so there might be feelings like despair, uncertainty, frustration, anger, worry, denial as well as disorientation.The scenario at the advertising division of Providian Financial Corporation 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 provide assistance to the department so that they can discover a feeling of instructions. It can be seen just how Krasnow has currently made this shift much easier by making Lewis get entailed in the department a year prior to his actual separation.
Vrio Analysis
Abraham Maslow in his Theory of 'Requirements Pecking order' (appendix 5) has talks about the significance of 'protection needs as being a lower degree need of a human for setting off motivation. As seen in the pyramid shared in appendix 3, we can see how 'the demand to really feel safe and secure as well as out of risk' is at the second level of needs. Before a worker can be made to establish emotionally, he needs to have his 'Physical 'and also 'Security' needs satisfied.

SWOT Analysis for Providian Financial Corporation Case Study



Ramification of Analysis.

The OB analysis has taken a look at different theories to recognize just how to deal with the present scenario handy. The adhering to three choices have been recommended to help Lewis handle the organizational difficulties in the advertising and marketing department. Each of these alternatives has been proposed for relieving the shift needed to bring the marketing division according to the demands of the marketplace and also for making the cultural change that would certainly adhere to as soon as the current leader leaves.

Combination of marketing and advertising features. Separating Adverting as well as Production features. Assimilation of Advertising with Operations.

Assessment of Alternatives.

Combination of Marketing & Marketing Functions: The in-house marketing agency of Providian Financial Corporation is already stamina for the company in terms of saving up on overheads connected to advertising and promotion. Given that no brand-new recruitment has been done after Bridget Cole's departure with the coverage line being straight assigned to Krasnow for the marketing function, this is a favorable chance for incorporating the marketing and advertising functions. Judith Shapiro that has actually earlier been talked to by Lewis during the earlier merger days has proficiency in business-to-business advertising and marketing together with agency as well as retail advertising experience. When Krasnow leaves, Lewis can work with Shapiro as an EVP for advertising and marketing to deal with both advertising and marketing functions.

The advantage of this strategy is that it will certainly integrate the two features while reducing the need for working with an extra source for advertising. Lewis would be heading the marketing division as well as in any case her replacement would certainly be needed for the present duty that she is executing. The drawback of this option is that external hiring might cause resentment from interior workers that may be considering the placement of EVP after Lewis takes over Krasnow's setting.

Dividing Adverting as well as Manufacturing: Provided the competitive pressures and high quality job required from the marketing company, it is advised that Lewis needs to allow the manufacturing system to be a separate feature from the advertising system. Because a lot of marketing firms had these 2 functions as separate units, it makes more sense to adhere to the norm.

Combination of Advertising with Operations: Considering that Lewis is already caring for the advertising and also operations divisions at the same time; it makes good sense to incorporate both features because she has actually been effectively dealing with both ends. The truth that the two departments already have major distinctions over allotment of sources suggests that this combination might have the ability to produce harmony particularly as Lewis would be heading both ends.However there are various disadvantages of this step especially as it would put too much worry over Lewis's shoulders. The fact that Lewis has to adapt her management style for the advertising and marketing division recommends that these two departments would be culturally varied. In addition to this, Lewis may not be able to apply one sort of management style to both departments which might result in inefficiency in either among the two features.

Suggestion.



An examination of the three options indicates that assimilation of advertising and procedures would certainly not be a viable step because of the substantial distinctions between the two departments although that presently Lewis is dealing with both. While splitting up of the production function may have been a beneficial move for the advertising department, the truth that it would indicate placing a third feature under Lewis's wing indicates this should be prevented too. The assimilation of the marketing department is the most effective alternative in regards to obtaining the optimal results from the division. An action plan for this option is gone over below.

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

Marketing and advertising features would certainly be merged.

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

Manufacturing feature will certainly remain component of advertising and marketing under marketing feature.

Lewis will certainly divide herself from operations.

A democratic leadership design with staff member empowerment will certainly be made use of in advertising division.

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

Contingency plan.

If the assimilation does not work out as planned, a backup strategy would certainly comply with which would divide the production function from the advertising feature to reduce the tons on the SVP of advertising and marketing. In case Judith Shapiro does not get employed, Lewis will be heading the advertising and marketing department without an SVP. In that case the production feature will absolutely be divided by positioning it under an SVP manufacturing.