Red Star Furniture Group Co Ltd Case Study Analysis


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Red Star Furniture Group Co Ltd Case Study Help

Background and Facts

Red Star Furniture Group Co Ltd an office supplies seller for tiny as well as moderate sized services has actually lately been associated with planning for a merging with its rival Residence Deport, which has influenced efficiency levels in departmentswith the senior manager involved in legal problems put forth by the federal Profession Payment. With the Advertising and marketing Head putting forward the news of his separation from the business in one year, Jeannie Lewis, the present head of procedures has been asked to take the duty in the future. With obstacles in the type of a potential cultural change and also reduced staff member spirits, the company needs a complete reengineering initiative at the advertising division.

Problem Statement
Porter's 5 Forces Analysis
The potential cultural change at the marketing department of Red Star Furniture Group Co Ltd is raising unpredictability in the working environment resulting in numerous challenges for the Jeannie Lewis that would be replacing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a major function in affecting critical choices given that Stapes Inc. had to abandon its plans of combining with Office Deport after the Federal Profession Payment's treatment while doing so. Given the truth that the shop has a global existence with branches in UK, USA, Canada and Germany, political factors in each of these nations might have the ability to affect efficiency or critical goals. Federal Profession Commission's antitrust suit versus the merging took up important time of the organization's senior monitoring suggesting that 'political' factors can have significant effects for an international business.

Economic Factors: Financial factors such as the introduction of local business in the international circumstance suggest that Red Star Furniture Group Co Ltd is thriving in an environment where there is possible development of services. Along with this, reality that store clients are primarily trying to find office products for office suggests that the marketplace has an increasing pattern of business owners and online businesses.

Social factors: Social trends in the economic situation reveal that consumers are searching for convenience in addition to appealing prices. Marketing research demonstrates how the client for Red Star Furniture Group Co Ltd lacks recognition regarding discovering services which can use a mix of comfort and inexpensive.

Technological factors: Modern technology plays a crucial function in Red Star Furniture Group Co Ltd's company method particularly as the company is piloting Technology facilities which would supply modern technology sales and also support in the type of memory upgrades, outer setups. (Summary of PARASITE in appendix 2).

OB Issues and Symptoms.

A number of underlying Organizational Habits problems can be seen in Red Star Furniture Group Co Ltd's case as highlighted in this area.

Apprehensions concerning cultural change: There is concern about a social change that would occur when Todd Krasnow leaves from his setting as the Executive Vice Head Of State of Advertising And Marketing with the majority of the personnel currently showing discontent over this possible move. This predicted adjustment has produced stress and anxiety in the work environment which has actually been coupled with the past stress and anxiety of preparing the firm for a possible merging with Residence Deport.
Pest Analysis
Difficult Task Atmosphere for Newcomers: There is lack of workers that can match the demanding environment of a busy organization. Not just does this bring about problem in finding the right individuals, it places stress and anxiety on brand-new hires as can not endure the rate as well as pressure that the organization anticipates them to bear.

Dual Reporting Lines: Beginners locate this business society troublesome and challenging to cope with especially as populated line relationships are implied to be weak in general as well as objective setup as well as performance examination is still done by the solid line supervisor. This indicates that newbies can shed clarity regarding their respective duties and objectives particularly as dotted line coverage does not maintain them in direct communication with the strong line supervisors.

Bitterness From Cross Departmental Hiring: Krasnow's decision to make Lewis his successor as opposed to Bridget Coles even though it had been hypothesized that the latter would certainly take Krasnow's setting came as a strike to her spirits. Lewis might have been qualified and suitable for the task however the truth that Kransnow's departure would certainly make Coles a direct report to Lewis may have been the factor for Coles' resignation from services.

Fear & Work Insecurity: Worry and insecurity can be identified as 2 significant concerns that Lewis would be handling specifically as the merging has actually now be terminated as well as two elderly execs of the advertising department would certainly be leaving. The whole responsibility of the department would be dropping on Lewis's shoulders who would not simply be in charge of brining regarding a social change however would certainly likewise have to prove herself in her brand-new duty.

Inappropriate Management Style of Leader: Lewis's monitoring style and also its incompatibility with the marketing department's role can also be seen as an OB challenge especially as she has been made use of to taking care of concerns in the operations department where personnel are shown to focus on processes and get them. The advertising and marketing division on the other hand can be seen as a group of people who are utilized to being nurtured by Krasnow who focused much more on result than procedures.

Interdepartmental Differences: Interdepartmental differences between three departments, marketing, merchandizing and also procedures respectively over the allowance of the advertising mix can be recognized as another OB worry. Although the marketing division does not share the very same vision as the other two departments relating to the aloocation of the advertising mix twoards promos and also advertsing, the merchandizing and operations departments do not concur over the marketing mix allocation among each other either.

Fragmentation in Advertising And Marketing Division: Disintegration between the marketing and advertising departments can be identified as another OB concern which can need additional interest. The reality that the advertising and marketing sections in the advertising department are detached is preventing both departments from getting from each various other's experience and expertise. Integration of marketing with merchandising as well as procedures would certainly become harder if the advertising and marketing division itself is broken down which can be another prospective OB concern.

Red Star Furniture Group Co Ltd Analysis

Various theories have actually been used to clarify the circumstances to obtain more clarity regarding the scenario handy.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Theory X, the majority of managers believe that juniors are easy and also lazy, have little ambition and stand up to adjustment. The situation at Red Star Furniture Group Co Ltd is not completely adhering to Theory X, it can be seen that brand-new hires are locating this atmosphere rather difficult which may at some point lead to a better disposition of the management in the direction of Theory X. Even while analyzing Lewis's management design, concept X might have been ideal in the operations division to some degree but the Advertising and marketing division would certainly call for dependence on Concept Y in order to obtain the creative thinking and originality from the groups.

Tuckman's Synergy Concept: As for Lewis's concern concerning bringing consistency in between the marketing and advertising division is concerned, this would originally bring about conflict as discussed by Bruce Tuckman in his 'Synergy Theory'. (Tuckman, 1965). Based on Tuckman's theory received appendix 3, during the preliminary phase of team advancement, people might not bond, as they are hectic discovering their place in the team. By integrating the advertising and marketing department's job, there might be the same initial disconnect which can cause the 2nd phase of 'storming' where the teams challenge each other. It is just throughout the 3rd stage or 'norming' when they would come with each other to share suggestions prior to the team can bring around synergy in the fourth phase 'doing'.

Bridges' Change Design: Based On William Bridge's concept (appendix 4), individuals are quite uncomfortable with change, which is obvious by the scenario at Red Star Furniture Group Co Ltd The scenario can be viewed as a normal training course of life if is studied based on Bridge's theory where he explains that people experience 3 stages of change when they experience adjustment. 'Ending, losing and also Releasing', The Neutral Area as well as 'The New Beginning' (Bridges, 2004). When people are presented with change, they enter phase one and so there may be feelings like despair, uncertainty, disappointment, temper, concern, denial and also disorientation.The circumstance at the advertising and marketing department of Red Star Furniture Group Co Ltd is comparable so Lewis can get comfy with the idea that it is not remarkable actions. In the 2nd phase, there may be a requirement to link the gap in between the new and old culture so Lewis might have to face this challenge once Krasnow leaves. There may be reduced spirits as well as reduced productivity at this stage which need to not be taken as a trouble. It is throughout this phase that Lewis will certainly have to offer guidance to the division to ensure that they can discover an orientation. It can be seen how Krasnow has currently made this change easier by making Lewis get involved in the department a year prior to his actual departure. Based on Bridges' Model, phase 3 will produce openness to discovering, High energy as well as dedication as individuals will certainly accept the modification (Bridges, 2004).
Vrio Analysis
Abraham Maslow in his Theory of 'Requirements Pecking order' (appendix 5) has reviews the value of 'security requires as being a reduced degree demand of a human for triggering inspiration. As seen in the pyramid shared in appendix 3, we can see exactly how 'the need to feel safe and secure and also out of risk' is at the 2nd degree of demands. Before a worker can be made to develop psychologically, he needs to have his 'Physical 'as well as 'Security' requires met.

SWOT Analysis for Red Star Furniture Group Co Ltd Case Study

Effects of Analysis.

The OB analysis has actually checked out different theories to recognize just how to deal with the existing situation at hand. The complying with 3 alternatives have been suggested to assist Lewis manage the business challenges in the marketing division. Each of these alternatives has actually been suggested for reducing the shift required to bring the advertising division according to the demands of the marketplace as well as for making the cultural change that would comply with as soon as the existing leader leaves.

Combination of marketing and advertising functions. Dividing Adverting and Manufacturing features. Assimilation of Marketing with Operations.

Examination of Alternatives.

Assimilation of Advertising & Marketing Functions: The in-house advertising firm of Red Star Furniture Group Co Ltd is currently strength for the company in regards to conserving up on expenses related to advertising as well as promo. Considering that no new recruitment has been done after Bridget Cole's departure with the reporting line being straight assigned to Krasnow for the advertising function, this is a positive chance for integrating the marketing and advertising features. Judith Shapiro that has earlier been spoken with by Lewis during the earlier merger days has competence in business-to-business advertising and marketing in addition to agency and also retail advertising and marketing experience. When Krasnow leaves, Lewis can employ Shapiro as an EVP for advertising to manage both advertising and marketing features.

The advantage of this method is that it will certainly integrate both features while minimizing the need for hiring an extra source for marketing. Lewis would be heading the marketing division and also in any kind of case her substitute would certainly be needed for the present duty that she is performing. The drawback of this choice is that exterior hiring may produce animosity from interior personnel that may be eying the position of EVP after Lewis takes control of Krasnow's setting.

Separating Adverting and also Manufacturing: Given the affordable stress and high top quality work required from the advertising and marketing firm, it is advised that Lewis must enable the manufacturing device to be a separate function from the marketing system. Given that a lot of advertising agencies had these two functions as separate systems, it makes even more feeling to comply with the standard.

Combination of Marketing with Procedures: Considering that Lewis is already taking care of the advertising and also operations departments simultaneously; it makes sense to integrate the 2 features considering that she has been efficiently taking treatment of both ends. The fact that Lewis has to adjust her monitoring style for the advertising division recommends that these 2 divisions would certainly be culturally varied.


An analysis of the 3 choices shows that integration of advertising and operations would not be a feasible action as a result of the huge differences in between both departments despite the fact that currently Lewis is managing both. While splitting up of the manufacturing function might have been a favorable action for the advertising division, the truth that it would certainly mean positioning a 3rd function under Lewis's wing means this must be stayed clear of too. The combination of the marketing division is the most effective alternative in regards to obtaining the optimal results from the department. An action prepare for this option is talked about listed below.

Activity Plan.
Lewis will take over the role of EVP Marketing after Krasnow leaves.

Advertising and Marketing features would certainly be combined.

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

Production function will certainly stay component of marketing under advertising feature.

Lewis will separate herself from procedures.

An autonomous management design with worker empowerment will be made use of in advertising division.

Open up door policy and emphasis on cross departmental communication will certainly be aimed at getting rid of dissonance.

Contingency strategy.

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