Role Of Private Equity Firms In Merger And Acquisition Transactions Case Study Help


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Role Of Private Equity Firms In Merger And Acquisition Transactions Case Study Help

Background and Facts

Role Of Private Equity Firms In Merger And Acquisition Transactions an office products retailer for little and average sized companies has recently been involved in planning for a merger with its rival Home Deport, which has influenced efficiency degrees in departmentswith the senior manager associated with legal difficulties presented by the government Trade Payment. With the Advertising and marketing Head advancing the information of his separation from the business in one year, Jeannie Lewis, the present head of operations has been asked to take the role in the future. With obstacles in the type of a potential social adjustment and also reduced staff member spirits, the organization is in need of a total reengineering initiative at the advertising and marketing department.

Problem Declaration
Porter's 5 Forces Analysis
The possible social modification at the advertising department of Role Of Private Equity Firms In Merger And Acquisition Transactions is increasing uncertainty in the working environment bring about different challenges for the Jeannie Lewis that would be replacing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant duty in affecting critical choices given that Stapes Inc. had to desert its strategies of merging with Office Deport after the Federal Profession Commission's treatment at the same time. Given the reality that the shop has an international presence with branches in UK, USA, Canada and Germany, political consider each of these countries may have the ability to impact performance or calculated goals. Federal Profession Compensation's antitrust match versus the merger occupied valuable time of the organization's senior monitoring suggesting that 'political' factors can have major implications for a global business.

Economic Factors: Financial factors such as the emergence of small businesses in the worldwide situation recommend that Role Of Private Equity Firms In Merger And Acquisition Transactions is prospering in an atmosphere where there is prospective development of companies. In addition to this, fact that store consumers are mainly searching for workplace products for home offices suggests that the marketplace has an increasing pattern of business owners as well as online businesses.

Social factors: Social fads in the economic climate reveal that consumers are looking for benefit in addition to attractive rates. Marketing research demonstrates how the customer for Role Of Private Equity Firms In Merger And Acquisition Transactions lacks recognition concerning finding services which can supply a mix of comfort as well as low costs.

Technological factors: Modern technology plays a crucial role in Role Of Private Equity Firms In Merger And Acquisition Transactions's service approach specifically as the organization is piloting Innovation centers which would use modern technology sales and also support in the kind of memory upgrades, peripheral setups. (Recap of PARASITE in appendix 2).

OB Issues and Effects.

A number of underlying Organizational Behavior issues can be seen in Role Of Private Equity Firms In Merger And Acquisition Transactions's case as highlighted in this area.

Uneasiness concerning cultural change: There is apprehension concerning a cultural adjustment that would take place when Todd Krasnow leaves from his setting as the Executive Vice President of Advertising with the majority of the staff members already showing unhappiness over this possible step. This predicted modification has actually produced anxiety in the work environment which has been combined with the past stress of preparing the firm for a possible merger with Home Deport.
Pest Analysis
Stressful Work Environment for Newcomers: There is scarcity of personnel that can match the difficult setting of a fast-paced company. Not only does this cause difficulty in discovering the right individuals, it places tension on brand-new hires as can not stand up to the speed and stress that the organization anticipates them to bear.

Double Coverage Lines: Newcomers find this business society cumbersome and tough to manage especially as populated line relationships are suggested to be weaker in general and unbiased setting as well as performance assessment is still done by the strong line manager. This implies that newcomers might shed clearness concerning their corresponding roles and also purposes specifically as dotted line reporting does not keep them in straight interaction with the strong line supervisors.

Resentment From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower as opposed to Bridget Coles although it had actually been guessed that the last would certainly take Krasnow's position came as a strike to her spirits. Lewis might have been qualified and proper for the task yet the truth that Kransnow's departure would certainly make Coles a direct report to Lewis might have been the reason for Coles' resignation from solutions.

Anxiety & Job Insecurity: Fear as well as insecurity can be determined as two major issues that Lewis would be managing especially as the merging has currently be terminated and 2 elderly execs of the advertising and marketing division would be leaving. The whole responsibility of the department would be dropping on Lewis's shoulders that would not just supervise of brining about a cultural change however would certainly likewise need to prove herself in her new function.

Incompatible Monitoring Design of Leader: Lewis's monitoring design as well as its conflict with the advertising department's role can likewise be viewed as an OB obstacle especially as she has actually been used to dealing with concerns in the operations department where employees are instructed to focus on procedures as well as obtain them right. The marketing department on the other hand can be seen as a team of people who are utilized to being supported by Krasnow who focused a lot more on output than procedures.

Interdepartmental Disagreements: Interdepartmental arguments between 3 departments, marketing, merchandizing and procedures respectively over the allocation of the advertising and marketing mix can be identified as one more OB concern. Although the advertising and marketing department does not share the same vision as the other two divisions pertaining to the aloocation of the advertising mix twoards promotions and also advertsing, the merchandizing and also procedures departments do not concur over the advertising and marketing mix appropriation amongst one another either.

Fragmentation in Advertising Department: Disintegration in between the advertising and marketing departments can be identified as another OB concern which can need further interest. The reality that the advertising and marketing sections in the marketing division are detached is avoiding both departments from acquiring from each various other's experience and expertise. Assimilation of advertising with merchandising and also procedures would certainly end up being harder if the advertising department itself is disintegrated which can be one more potential OB concern.

Role Of Private Equity Firms In Merger And Acquisition Transactions Analysis

Numerous theories have been made use of to describe the scenarios to obtain further quality about the situation available.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Theory X, the majority of managers believe that staffs are passive and lazy, have little ambition and also stand up to modification. The situation at Role Of Private Equity Firms In Merger And Acquisition Transactions is not totally adhering to Theory X, it can be seen that brand-new hires are discovering this environment instead stressful which may ultimately lead to a greater disposition of the monitoring towards Theory X. Also while evaluating Lewis's monitoring design, concept X might have been appropriate in the procedures department to some extent however the Advertising department would need reliance on Theory Y in order to obtain the creative thinking as well as originality from the groups.

Tuckman's Team effort Theory: Regarding Lewis's worry concerning bringing consistency between the advertising and marketing department is worried, this would originally bring about conflict as talked about by Bruce Tuckman in his 'Teamwork Concept'. (Tuckman, 1965). Based on Tuckman's concept shown in appendix 3, throughout the preliminary phase of group development, individuals might not bond, as they are busy discovering their area in the team. By incorporating the marketing and advertising division's work, there might coincide initial disconnect which can result in the 2nd stage of 'storming' where the teams test one another. However, it is just throughout the third stage or 'norming' when they would integrate to share concepts before the group can cause synergy in the 4th phase 'performing'.

Bridges' Change Model: Based On William Bridge's concept (appendix 4), people are quite uncomfortable with change, which is obvious by the situation at Role Of Private Equity Firms In Merger And Acquisition Transactions The circumstance can be viewed as a regular program of life if is examined according to Bridge's theory where he clarifies that people experience three stages of change when they experience adjustment. 'Closing, shedding and Letting go', The Neutral Zone and also 'The New Beginning' (Bridges, 2004). When individuals exist with adjustment, they go into phase one and so there may be emotions like sadness, uncertainty, stress, rage, concern, denial and also disorientation.The scenario at the advertising and marketing division of Role Of Private Equity Firms In Merger And Acquisition Transactions is comparable so Lewis can obtain comfy with the suggestion that it is not remarkable habits. In the 2nd phase, there might be a demand to bridge the gap between the new and also old society so Lewis may have to encounter this ordeal as soon as Krasnow leaves. There may be reduced spirits and reduced efficiency at this phase which must not be taken as a problem. It is during this phase that Lewis will have to offer advice to the department so that they can locate a sense of direction. It can be seen how Krasnow has actually already made this shift simpler by making Lewis obtain associated with the department a year before his actual departure. Based on Bridges' Design, stage 3 will produce openness to learning, High energy and dedication as individuals will certainly embrace the change (Bridges, 2004).
Vrio Analysis
Abraham Maslow in his Theory of 'Requirements Power structure' (appendix 5) has goes over the importance of 'security requires as being a reduced level requirement of a human for activating motivation. As seen in the pyramid shared in appendix 3, we can see how 'the requirement to really feel safe and also out of risk' is at the second degree of demands. Before a staff member can be made to create psychologically, he needs to have his 'Physiological 'as well as 'Safety' requires fulfilled.

SWOT Analysis for Role Of Private Equity Firms In Merger And Acquisition Transactions Case Study

Implication of Analysis.

The OB analysis has actually checked out numerous theories to recognize how to manage the present scenario handy. The following three alternatives have actually been suggested to help Lewis take care of the organizational difficulties in the marketing division. Each of these choices has been suggested for easing the shift required to bring the advertising and marketing department in line with the demands of the market and also for making the cultural change that would certainly follow when the existing leader leaves.

Assimilation of marketing and advertising features. Separating Adverting as well as Manufacturing functions. Integration of Marketing with Workflow.

Examination of Alternatives.

Judith Shapiro who has actually earlier been talked to by Lewis during the earlier merger days has competence in business-to-business advertising along with firm and retail advertising experience. When Krasnow leaves, Lewis can hire Shapiro as an EVP for advertising and marketing to manage both advertising and also advertising and marketing features.

The benefit of this strategy is that it will certainly integrate both functions while decreasing the demand for hiring an extra resource for advertising. Lewis would be heading the advertising department and also in any type of case her replacement would certainly be needed for the existing duty that she is performing. The negative aspect of this alternative is that external hiring might cause animosity from internal workers who may be eying the placement of EVP after Lewis takes control of Krasnow's setting.

Separating Adverting and Production: Given the affordable stress as well as high top quality job called for from the advertising and marketing agency, it is suggested that Lewis should permit the manufacturing system to be a different function from the marketing system. Considering that most advertising companies had these 2 features as different units, it makes even more feeling to adhere to the norm.

Assimilation of Advertising And Marketing with Workflows: Since Lewis is currently taking care of the advertising and marketing and also operations departments at the same time; it makes sense to incorporate the two features since she has been successfully taking care of both ends. The reality that Lewis has to adapt her monitoring design for the advertising and marketing division suggests that these 2 divisions would certainly be culturally varied.


An evaluation of the three choices suggests that combination of marketing and also procedures would certainly not be a viable step due to the huge distinctions between the 2 departments regardless of the truth that presently Lewis is managing both. While splitting up of the production feature might have been a desirable step for the advertising and marketing division, the fact that it would certainly indicate putting a 3rd feature under Lewis's wing indicates this should be avoided.

Action Plan.
Lewis will take control of the duty of EVP Advertising after Krasnow leaves.

Marketing and advertising functions would certainly be merged.

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

Production function will certainly remain component of advertising under marketing function.

Lewis will divide herself from procedures.

A democratic management design with worker empowerment will be used in advertising and marketing division.

Open up door plan as well as emphasis on cross departmental communication will be focused on eliminating disharmony.

Contingency plan.

If the assimilation does not exercise as prepared, a backup plan would certainly follow which would certainly divide the production function from the advertising and marketing feature to decrease the tons on the SVP of advertising and marketing. In case Judith Shapiro does not get employed, Lewis will be heading the advertising division without an SVP. In that case the manufacturing feature will absolutely be divided by placing it under an SVP manufacturing.