Menu

State Farm Insurance Taking The Reins B Case Study Help

CASE ANALYSIS

Home >> Harvard >> State Farm Insurance Taking The Reins B >>

State Farm Insurance Taking The Reins B Case Study Help

Background and Facts

State Farm Insurance Taking The Reins B a workplace materials retailer for little and also moderate sized businesses has lately been involved in preparing for a merging with its competitor House Deport, which has affected efficiency degrees in departmentswith the elderly manager associated with legal complications put forth by the federal Trade Payment. With the Marketing Head advancing the information of his departure from the business in one year, Jeannie Lewis, the present head of operations has been asked to take the duty in the near future. With difficulties in the type of a prospective social change and also low staff member morale, the company needs a full reengineering initiative at the marketing department.

Problem Declaration
Porter's 5 Forces Analysis
The potential social change at the advertising department of State Farm Insurance Taking The Reins B is raising unpredictability in the working environment resulting in different difficulties for the Jeannie Lewis that would certainly be replacing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant duty in affecting calculated choices given that Stapes Inc. had to desert its plans of combining with Workplace Deport after the Federal Trade Compensation's intervention while doing so. Offered the fact that the store has an international presence with branches in UK, U.S.A., Canada as well as Germany, political factors in each of these nations might have the ability to affect efficiency or critical objectives. Federal Trade Commission's antitrust fit against the merger took up useful time of the company's elderly management suggesting that 'political' factors can have significant implications for an international company.

Economic Factors: Financial factors such as the appearance of small businesses in the worldwide circumstance suggest that State Farm Insurance Taking The Reins B is flourishing in an environment where there is potential growth of companies. Fact that store customers are mainly looking for workplace products for home workplaces recommends that the market has a climbing pattern of entrepreneurs and also residence based organisations.

Social factors: Social trends in the economic climate show that clients are trying to find convenience along with appealing prices. Market research shows how the consumer for State Farm Insurance Taking The Reins B does not have awareness about discovering remedies which can supply a combination of convenience and affordable.

Technical factors: Modern technology plays a vital role in State Farm Insurance Taking The Reins B's organisation approach particularly as the organization is piloting Innovation facilities which would offer innovation sales and also assistance in the form of memory upgrades, outer installments. (Summary of INSECT in appendix 2).

OB Issues and Manifestations.

Numerous underlying Organizational Actions problems can be seen in State Farm Insurance Taking The Reins B's case as highlighted in this section.

Concerns about social change: There is worry concerning a social adjustment that would happen as soon as Todd Krasnow leaves from his placement as the Executive Vice President of Advertising And Marketing with a lot of the staff members currently revealing unhappiness over this potential step. This expected change has actually produced stress and anxiety in the office which has actually been paired with the past tension of preparing the firm for a potential merger with House Deport.
Pest Analysis
Difficult Work Atmosphere for Newcomers: There is scarcity of employees that can match the difficult setting of a hectic company. Not only does this lead to problem in finding the appropriate people, it puts tension on new hires as can not withstand the speed and stress that the organization anticipates them to birth.

Double Reporting Lines: Newbies find this business culture troublesome and also challenging to cope with particularly as populated line relationships are meant to be weak generally and also objective setting and performance examination is still done by the solid line supervisor. This indicates that novices might lose clarity regarding their respective functions as well as goals especially as dotted line reporting does not maintain them in direct communication with the solid line managers.

Bitterness From Cross Departmental Hiring: Krasnow's decision to make Lewis his follower rather than Bridget Coles despite the fact that it had been speculated that the latter would take Krasnow's position came as a blow to her spirits. Lewis may have been qualified as well as ideal for the job but the reality that Kransnow's separation would make Coles a straight record to Lewis may have been the factor for Coles' resignation from solutions.

Anxiety & Task Insecurity: Concern as well as instability can be determined as two significant problems that Lewis would certainly be handling particularly as the merger has actually now be terminated and also two senior execs of the advertising and marketing division would be leaving. The entire responsibility of the department would be falling on Lewis's shoulders who would not simply be in charge of brining concerning a cultural change yet would certainly additionally have to show herself in her new function.

Inappropriate Administration Style of Leader: Lewis's administration design and also its conflict with the advertising department's duty can likewise be seen as an OB difficulty particularly as she has actually been made use of to handling problems in the operations department where personnel are shown to focus on processes as well as obtain them. The marketing division on the various other hand can be viewed as a team of individuals that are utilized to being nurtured by Krasnow that concentrated more on result than procedures.

Interdepartmental Disputes: Interdepartmental disputes in between 3 departments, advertising and marketing, merchandizing as well as operations specifically over the allowance of the marketing mix can be identified as another OB concern. Although the marketing department does not share the exact same vision as the various other two departments regarding the aloocation of the advertising mix twoards promotions and also advertsing, the merchandizing and procedures departments do not concur over the advertising and marketing mix appropriation among each other either.

Disintegration in Advertising Division: Disintegration between the marketing and advertising divisions can be recognized as an additional OB concern which might need further interest. The truth that the marketing and advertising sections in the advertising division are disconnected is avoiding both divisions from getting from each other's experience and also know-how. Combination of advertising and marketing with retailing and procedures would end up being more difficult if the marketing division itself is broken down which can be one more possible OB issue.

State Farm Insurance Taking The Reins B Analysis

Numerous theories have been used to explain the circumstances to get further clarity about the circumstance available.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, the majority of supervisors think that juniors are passive as well as careless, have little ambition and also stand up to change. The difficult version of this theory highlighted threat, tight controls, dangers and punishments. Gradually it produces reduced efficiency, refined sabotage as well as rivalry (Offer, 2003). The scenario at State Farm Insurance Taking The Reins B is not entirely following Concept X, it can be seen that new hires are discovering this atmosphere rather stressful which may ultimately lead to a better inclination of the monitoring in the direction of Concept X. According to McGregor's advocated sight, which he called Concept Y, the important task of the monitoring is to organize organizational problems so that people can achieve their own objectives best by directing their efforts in the direction of organizational incentives. If people locate no complete satisfaction in their work, the management would certainly have little option but to rely upon concept X and outside control (Bargain, 2003). Even while evaluating Lewis's management design, concept X may have been suitable in the operations division somewhat yet the Marketing department would call for dependence on Theory Y in order to get the creativity as well as creativity from the groups.

Tuckman's Synergy Theory: Regarding Lewis's worry concerning bringing harmony in between the marketing and advertising department is concerned, this would at first cause contrast as discussed by Bruce Tuckman in his 'Team effort Concept'. (Tuckman, 1965). As per Tuckman's theory received appendix 3, throughout the first stage of group advancement, individuals may not bond, as they are busy locating their location in the group. By integrating the advertising and marketing division's work, there might coincide preliminary detach which can cause the second phase of 'storming' where the groups test one another. It is only throughout the third phase or 'norming' when they would come together to share concepts prior to the group can bring about harmony in the fourth phase 'executing'.

Bridges' Shift Design: Based On William Bridge's theory (appendix 4), people are quite uneasy with modification, which is noticeable by the scenario at State Farm Insurance Taking The Reins B The scenario can be seen as a regular course of life if is examined as per Bridge's theory where he explains that individuals experience three phases of transition when they experience change. 'Closing, losing and also Letting go', The Neutral Zone and 'The New Starting' (Bridges, 2004). When people are presented with change, they enter phase one and so there might be feelings like unhappiness, uncertainty, stress, temper, worry, rejection as well as disorientation.The situation at the advertising department of State Farm Insurance Taking The Reins B is similar so Lewis can get comfy with the idea that it is not remarkable behavior. In the second phase, there may be a requirement to link the gap in between the new as well as old society so Lewis might need to face this experience as soon as Krasnow leaves. There might be reduced spirits as well as reduced efficiency at this phase which need to not be taken as an obstacle. It is during this stage that Lewis will certainly need to give guidance to the division to ensure that they can find an orientation. It can be seen exactly how Krasnow has currently made this shift simpler by making Lewis obtain associated with the division a year before his real departure. According to Bridges' Model, phase 3 will certainly bring about visibility to discovering, High energy and commitment as people will accept the adjustment (Bridges, 2004).
Vrio Analysis
Abraham Maslow in his Concept of 'Needs Pecking order' (appendix 5) has reviews the importance of 'safety and security needs as being a reduced degree need of a human for setting off motivation. As seen in the pyramid shared in appendix 3, we can see how 'the need to really feel safe as well as out of threat' is at the second level of demands. Prior to an employee can be made to create emotionally, he requires to have his 'Physiological 'as well as 'Safety and security' needs met.

SWOT Analysis for State Farm Insurance Taking The Reins B Case Study



Ramification of Analysis.

The OB analysis has actually considered different concepts to recognize just how to handle the present circumstance available. The adhering to 3 alternatives have actually been suggested to assist Lewis take care of the organizational challenges in the advertising division. Each of these choices has been proposed for easing the transition required to bring the advertising department according to the demands of the market and also for making the social change that would comply with when the existing leader leaves.

Assimilation of advertising and marketing functions. Separating Adverting as well as Manufacturing functions. Combination of Advertising And Marketing with Procedures.

Evaluation of Alternatives.

Judith Shapiro that has actually earlier been interviewed by Lewis during the earlier merger days has proficiency in business-to-business marketing along with agency and retail advertising and marketing experience. As soon as Krasnow leaves, Lewis can hire Shapiro as an EVP for marketing to handle both advertising and marketing features.

The benefit of this technique is that it will certainly integrate the two functions while minimizing the need for working with an additional source for advertising and marketing. In addition to this, Lewis would be heading the marketing department as well as all the same her replacement would certainly be needed for the existing duty that she is performing. The disadvantage of this alternative is that exterior hiring may cause resentment from internal personnel that may be looking at the placement of EVP after Lewis takes over Krasnow's position.

Separating Adverting as well as Manufacturing: Given the competitive pressures and also top quality work needed from the ad agency, it is advised that Lewis should allow the manufacturing unit to be a separate feature from the advertising device. Given that many ad agency had these 2 features as different devices, it makes more feeling to adhere to the standard. Both features may be able to focus on their core triggers much more effectively. The disadvantage of this technique would certainly be that extra expenses would have to be birthed for establishing up different production functions. A production head may have to be employed which can increase expenses for the organization.

Assimilation of Advertising with Procedures: Considering that Lewis is already caring for the advertising as well as procedures departments all at once; it makes good sense to integrate both features because she has actually been efficiently looking after both ends. The fact that both divisions already have major distinctions over allotment of sources recommends that this integration may have the ability to bring about harmony specifically as Lewis would certainly be heading both ends.However there are various negative aspects of this move particularly as it would put way too much problem over Lewis's shoulders. The truth that Lewis has to adapt her management design for the advertising division recommends that these two divisions would certainly be culturally diverse. Along with this, Lewis might not be able to use one sort of management design to both divisions which might cause inefficiency in either among the two features.

Recommendation.



An evaluation of the 3 choices indicates that assimilation of marketing and procedures would not be a possible step due to the huge distinctions between the two divisions regardless of the reality that currently Lewis is handling both. While splitting up of the manufacturing function may have been a favorable step for the advertising department, the reality that it would suggest putting a 3rd feature under Lewis's wing implies this need to be avoided.

Action Strategy.
Recommendation
Lewis will certainly take control of the duty of EVP Marketing after Krasnow leaves.

Advertising and Marketing functions would certainly be combined.

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

Production feature will continue to be part of advertising and marketing under marketing feature.

Lewis will certainly divide herself from procedures.

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

Open up door plan as well as focus on cross department communication will certainly be targeted at getting rid of dissonance.

Contingency strategy.

If the combination does not exercise as intended, a backup plan would comply with which would certainly divide the production function from the marketing feature to reduce the tons on the SVP of advertising and marketing. In case Judith Shapiro does not obtain hired, Lewis will be heading the advertising division without an SVP. Because case the production feature will definitely be divided by putting it under an SVP production.