Background and Facts
Risk Management At Lehman Brothers 2007 2008 a workplace supplies retailer for little and medium sized services has actually lately been involved in planning for a merging with its competitor House Deport, which has affected performance levels in departmentswith the elderly manager involved in legal difficulties presented by the federal Profession Compensation. With the Advertising Head putting forward the news of his separation from the firm in one year, Jeannie Lewis, the current head of procedures has actually been asked to take the role in the future. With challenges in the type of a potential social change and low worker spirits, the organization wants a total reengineering effort at the advertising division.Problem Declaration
The possible cultural adjustment at the advertising division of Risk Management At Lehman Brothers 2007 2008 is enhancing uncertainty in the workplace causing various obstacles 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 significant role in affecting strategic choices since Stapes Inc. needed to abandon its strategies of combining with Workplace Deport after the Federal Profession Commission's treatment in the process. Offered the reality that the shop has a worldwide visibility with branches in UK, UNITED STATES, Canada as well as Germany, political consider each of these countries might have the ability to affect performance or strategic objectives. Federal Trade Payment's antitrust match versus the merging took up valuable time of the company's senior administration suggesting that 'political' factors can have significant ramifications for a worldwide service.
Economic Factors: Economic factors such as the introduction of small businesses in the global scenario recommend that Risk Management At Lehman Brothers 2007 2008 is prospering in an environment where there is possible growth of organisations. In addition to this, fact that store consumers are mostly looking for office supplies for home offices recommends that the marketplace has a rising trend of business owners and also home based businesses.
Social factors: Social trends in the economy show that customers are searching for benefit along with eye-catching rates. Market research shows how the client for Risk Management At Lehman Brothers 2007 2008 lacks recognition about locating services which can offer a combination of convenience and also affordable.
Technological factors: Technology plays a crucial function in Risk Management At Lehman Brothers 2007 2008's company strategy specifically as the company is piloting Technology facilities which would offer modern technology sales and also assistance in the kind of memory upgrades, outer installations. (Summary of INSECT in appendix 2).
OB Issues and Symptoms.
A number of underlying Business Behavior concerns can be seen in Risk Management At Lehman Brothers 2007 2008's case as highlighted in this section.
Worries about social change: There is worry concerning a cultural modification that would certainly happen when Todd Krasnow leaves from his position as the Exec Vice President of Advertising with a lot of the employee currently revealing discontent over this potential step. This predicted adjustment has actually developed tension in the work environment which has actually been combined with the previous tension of preparing the company for a potential merger with Home Deport.
Difficult Work Setting for Newcomers: There is lack of workers that can match the stressful environment of a fast-paced company. Not only does this result in problem in finding the ideal individuals, it puts tension on new hires as can not stand up to the rate as well as pressure that the organization anticipates them to birth.
Twin Reporting Lines: Newcomers find this organizational culture cumbersome and also hard to cope with particularly as dotted line partnerships are suggested to be weak in general as well as objective setup and efficiency examination is still done by the strong line supervisor. This means that beginners could lose quality about their particular duties and objectives particularly as populated line coverage does not maintain them in straight communication with the strong line supervisors.
Bitterness From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower instead of Bridget Coles despite the fact that it had actually been guessed that the last would take Krasnow's setting came as a strike to her morale. Lewis might have been capable as well as suitable for the work but the reality that Kransnow's departure would make Coles a direct record to Lewis may have been the reason for Coles' resignation from solutions.
Fear & Work Insecurity: Worry and insecurity can be recognized as two significant issues that Lewis would be dealing with particularly as the merger has now be cancelled and also 2 senior executives of the marketing division would be leaving. The entire obligation of the department would certainly be dropping on Lewis's shoulders who would certainly not simply be in charge of brining concerning a cultural adjustment but would certainly also need to confirm herself in her brand-new role.
Incompatible Monitoring Design of Leader: Lewis's management style as well as its incompatibility with the advertising department's role can also be seen as an OB difficulty especially as she has been used to handling problems in the procedures department where employees are educated to focus on procedures as well as get them. The marketing division on the other hand can be seen as a group of individuals who are used to being nurtured by Krasnow who concentrated much more on result than processes.
Interdepartmental Differences: Interdepartmental differences between 3 divisions, advertising and marketing, merchandizing and also operations specifically over the appropriation of the marketing mix can be identified as an additional OB problem. The advertising and marketing division does not share the very same vision as the other two departments relating to the aloocation of the advertising mix twoards promotions and advertsing, the merchandizing and also procedures divisions do not concur over the advertising and marketing mix allocation amongst one an additional either.
Disintegration in Advertising Department: Fragmentation between the advertising and marketing departments can be determined as one more OB concern which might require more interest. The truth that the marketing and advertising sections in the advertising division are separated is avoiding both departments from gaining from each other's experience as well as experience. Assimilation of advertising with retailing and also operations would certainly become harder if the advertising and marketing division itself is disintegrated which can be one more prospective OB problem.
Risk Management At Lehman Brothers 2007 2008 Analysis
Different concepts have been made use of to clarify the circumstances to obtain more clarity regarding the scenario available.
McGregor's Concept X & Y: According to Douglas McGregor's Concept X, most supervisors think that subordinates are passive and also careless, have little aspiration and also stand up to modification. The hard variation of this theory stressed threat, tight controls, hazards and also penalties. With time it creates reduced performance, subtle sabotage as well as rivalry (Deal, 2003). Although the scenario at Risk Management At Lehman Brothers 2007 2008 is not totally following Theory X, it can be seen that brand-new hires are finding this atmosphere rather difficult which may at some point cause a better inclination of the administration in the direction of Concept X. According to McGregor's promoted sight, which he called Concept Y, the crucial task of the administration is to organize business problems to make sure that people can attain their own goals best by routing their efforts towards organizational benefits. If people discover no fulfillment in their job, the administration would certainly have little option yet to rely on theory X and also exterior control (Bargain, 2003). Even while assessing Lewis's monitoring design, theory X might have appropriated in the operations department to some extent however the Advertising department would certainly call for reliance on Theory Y to get the creative thinking and creativity from the groups.
Tuckman's Teamwork Theory: As much as Lewis's problem about bringing consistency in between the marketing and also marketing department is concerned, this would initially lead to clash as discussed by Bruce Tuckman in his 'Teamwork Theory'. By integrating the advertising and marketing and also advertising and marketing division's job, there may be the exact same first disconnect which could lead to the 2nd phase of 'storming' where the groups challenge one an additional.
Bridges' Shift Version: As per William Bridge's concept (appendix 4), people are rather awkward with modification, which is evident by the scenario at Risk Management At Lehman Brothers 2007 2008 The circumstance can be seen as a typical course of life if is examined as per Bridge's theory where he describes that individuals undergo 3 stages of transition when they experience adjustment. 'Ending, shedding and also Letting go', The Neutral Zone and 'The New Starting' (Bridges, 2004). When individuals exist with modification, they go into phase one therefore there might be emotions like unhappiness, uncertainty, stress, temper, fear, denial and disorientation.The situation at the advertising division of Risk Management At Lehman Brothers 2007 2008 is comparable so Lewis can get comfortable with the suggestion that it is not amazing actions. In the second stage, there may be a demand to bridge the void between the new and also old culture so Lewis may need to encounter this challenge once Krasnow leaves. There may be reduced morale and also reduced performance at this phase which should not be taken as a problem. It is throughout this stage that Lewis will have to provide guidance to the division so that they can discover an orientation. It can be seen how Krasnow has actually already made this shift much easier by making Lewis obtain involved in the division a year prior to his real separation. As per Bridges' Model, phase three will certainly produce openness to understanding, High energy and commitment as people will welcome the modification (Bridges, 2004).
Abraham Maslow in his Theory of 'Needs Pecking order' (appendix 5) has discusses the importance of 'protection requires as being a lower level requirement of a human for causing inspiration. As seen in the pyramid shared in appendix 3, we can see exactly how 'the demand to really feel safe as well as out of danger' is at the 2nd degree of requirements. Before a worker can be made to develop emotionally, he needs to have his 'Physical 'as well as 'Safety and security' requires satisfied.
SWOT Analysis for Risk Management At Lehman Brothers 2007 2008 Case Study
Ramification of Analysis.
The OB analysis has considered various theories to comprehend how to handle the present circumstance available. The following three choices have actually been recommended to help Lewis handle the business difficulties in the marketing division. Each of these options has actually been recommended for reducing the change needed to bring the marketing division according to the demands of the marketplace as well as for making the social adjustment that would adhere to as soon as the present leader leaves.
Combination of advertising and marketing functions. Separating Adverting as well as Manufacturing functions. Integration of Advertising And Marketing with Procedures.
Analysis of Alternatives.
Combination of Advertising & Advertising And Marketing Functions: The internal advertising agency of Risk Management At Lehman Brothers 2007 2008 is currently toughness for the organization in regards to conserving up on expenses related to advertising and also promo. Considering that no brand-new employment has actually been done after Bridget Cole's departure with the coverage line being straight designated to Krasnow for the marketing feature, this is a desirable opportunity for integrating the marketing and advertising functions. Judith Shapiro that has actually earlier been interviewed by Lewis throughout the earlier merger days has expertise in business-to-business advertising along with company and retail advertising and marketing experience. When Krasnow leaves, Lewis can work with Shapiro as an EVP for marketing to handle both marketing and advertising functions.
The advantage of this technique is that it will certainly integrate both features while reducing the need for hiring an added resource for marketing. Along with this, Lewis would certainly be heading the advertising division and in any case her substitute would certainly be needed for the current role that she is executing. The negative aspect of this option is that exterior hiring might bring about bitterness from inner workers that might be considering the placement of EVP after Lewis takes over Krasnow's setting.
Dividing Adverting and Manufacturing: Provided the competitive stress and excellent quality work needed from the advertising agency, it is suggested that Lewis must allow the production unit to be a different function from the advertising and marketing device. Given that most ad agency had these 2 features as separate systems, it makes more feeling to comply with the norm. Both functions may be able to focus on their core turns on a lot more successfully. The disadvantage of this approach would be that additional prices would certainly have to be borne for setting up separate manufacturing features. A manufacturing head may have to be employed which can increase expenses for the company.
Assimilation of Advertising with Procedures: Considering that Lewis is already taking care of the advertising and operations divisions concurrently; it makes feeling to integrate the 2 functions considering that she has been successfully taking treatment of both ends. The truth that Lewis has to adjust her administration design for the advertising division suggests that these two divisions would be culturally diverse.
Suggestion.
An assessment of the three alternatives shows that integration of marketing and also procedures would not be a feasible move due to the huge differences in between the two departments in spite of the fact that presently Lewis is handling both. While separation of the production function may have been a positive action for the advertising and marketing division, the reality that it would imply putting a 3rd function under Lewis's wing suggests this ought to be avoided.
Activity Plan.
Lewis will take over the duty of EVP Advertising and marketing after Krasnow leaves.
Advertising and Marketing functions would be combined.
Judith Shapiro will be employed to take Lewis's place as SVP of advertising and marketing.
Production function will remain component of advertising and marketing under advertising and marketing function.
Lewis will separate herself from procedures.
A democratic management style with employee empowerment will be utilized in advertising division.
Open up door policy and also focus on cross departmental interaction will be focused on eliminating discord.
Backup plan.
If the integration does not work out as prepared, a backup plan would certainly adhere to which would certainly separate the production function from the advertising function to decrease the tons 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 certainly be divided by putting it under an SVP production.