Teuer Furniture A Discounted Cash Flow Valuation Case Study Solution


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Background and Facts

Teuer Furniture A Discounted Cash Flow Valuation an office materials seller for little and average sized services has recently been associated with preparing for a merger with its rival House Deport, which has actually affected efficiency levels in departmentswith the elderly manager associated with legal problems put forth by the federal Profession Payment. With the Advertising and marketing Head advancing the news 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 obstacles in the kind of a potential cultural change as well as low worker spirits, the organization wants a full reengineering initiative at the advertising division.

Issue Declaration
Porter's 5 Forces Analysis
The possible social change at the advertising and marketing department of Teuer Furniture A Discounted Cash Flow Valuation is enhancing uncertainty in the workplace resulting in different 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 major duty in affecting critical decisions since Stapes Inc. had to desert its plans of merging with Workplace Deport after the Federal Profession Compensation's intervention in the process. Given the reality that the store has a global existence with branches in UK, U.S.A., Canada and Germany, political consider each of these countries might be able to influence performance or strategic objectives. Federal Profession Payment's antitrust match against the merging used up important time of the company's senior management suggesting that 'political' factors can have serious effects for a global organisation.

Economic Factors: Economic factors such as the appearance of small companies in the global scenario recommend that Teuer Furniture A Discounted Cash Flow Valuation is flourishing in an environment where there is prospective growth of companies. Along with this, truth that shop customers are mostly looking for workplace products for office recommends that the market has a climbing pattern of entrepreneurs and home businesses.

Social factors: Social patterns in the economy show that consumers are seeking benefit in addition to eye-catching costs. Marketing research demonstrates how the customer for Teuer Furniture A Discounted Cash Flow Valuation does not have recognition concerning finding services which can use a combination of ease as well as inexpensive.

Technical factors: Technology plays an important role in Teuer Furniture A Discounted Cash Flow Valuation's service approach especially as the organization is piloting Innovation facilities which would provide technology sales and support in the type of memory upgrades, outer setups. (Summary of PARASITE in appendix 2).

OB Issues as well as Symptoms.

Numerous underlying Organizational Actions concerns can be seen in Teuer Furniture A Discounted Cash Flow Valuation's case as highlighted in this section.

Worries concerning social adjustment: There is uneasiness concerning a social change that would take place when Todd Krasnow leaves from his placement as the Executive Vice Head Of State of Marketing with the majority of the personnel currently showing discontent over this prospective action. This anticipated change has developed anxiety in the workplace which has actually been paired with the previous stress and anxiety of preparing the firm for a potential merger with Home Deport.
Pest Analysis
Stressful Task Environment for Newcomers: There is shortage of workers that can match the difficult atmosphere of a fast-paced company. Not only does this lead to problem in discovering the right individuals, it places tension on brand-new hires as can not stand up to the rate and stress that the company expects them to birth.

Twin Reporting Lines: Newcomers locate this organizational society troublesome and difficult to manage particularly as dotted line partnerships are meant to be weaker generally and objective setup and also efficiency evaluation is still done by the solid line manager. This means that newcomers might lose clarity about their particular functions and goals particularly as dotted line reporting does not maintain them in direct communication with the strong line supervisors.

Resentment From Cross Departmental Hiring: Krasnow's decision to make Lewis his follower as opposed to Bridget Coles although it had actually been speculated that the latter would take Krasnow's placement came as an impact to her morale. Lewis might have been qualified and suitable for the work however the fact that Kransnow's separation would certainly make Coles a direct record to Lewis might have been the factor for Coles' resignation from services.

Worry & Work Insecurity: Anxiety and insecurity can be determined as two major worries that Lewis would be managing especially as the merger has actually now be terminated and also 2 senior executives of the advertising and marketing department would certainly be leaving. The whole duty of the department would certainly be dropping on Lewis's shoulders that would not simply be in charge of brining concerning a social change but would likewise need to verify herself in her new function.

Incompatible Monitoring Design of Leader: Lewis's management design as well as its conflict with the advertising department's duty can additionally be seen as an OB obstacle specifically as she has actually been used to dealing with concerns in the operations department where employees are educated to focus on processes as well as obtain them. The advertising division on the other hand can be seen as a team of individuals that are made use of to being supported by Krasnow who focused a lot more on outcome than processes.

Interdepartmental Disagreements: Interdepartmental disputes in between three departments, advertising, merchandizing and also operations specifically over the allowance of the advertising mix can be identified as one more OB problem. The advertising and marketing department does not share the very same vision as the various other two departments concerning the aloocation of the advertising and marketing mix twoards promos as well as advertsing, the merchandizing and operations departments do not concur over the advertising mix appropriation among one an additional either.

Disintegration in Advertising And Marketing Division: Disintegration in between the marketing and advertising divisions can be recognized as another OB concern which could need further focus. The truth that the marketing and advertising areas in the advertising and marketing department are disconnected is stopping both departments from obtaining from each other's experience as well as competence. Assimilation of advertising with retailing as well as procedures would become more difficult if the marketing division itself is degenerated which can be one more prospective OB worry.

Teuer Furniture A Discounted Cash Flow Valuation Analysis

Different theories have been used to clarify the circumstances to obtain additional quality about the scenario at hand.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Theory X, a lot of managers think that juniors are easy and careless, have little aspiration and also stand up to modification. The scenario at Teuer Furniture A Discounted Cash Flow Valuation is not entirely adhering to Concept X, it can be seen that brand-new hires are finding this setting rather difficult which may ultimately lead to a greater disposition of the administration in the direction of Concept X. Also while examining Lewis's administration design, theory X might have been suitable in the procedures division to some level but the Advertising department would require dependence on Concept Y in order to obtain the creativity as well as originality from the teams.

Tuckman's Synergy Theory: As far as Lewis's problem about bringing harmony in between the advertising and marketing division is worried, this would originally result in conflict as discussed by Bruce Tuckman in his 'Team effort Concept'. (Tuckman, 1965). Based on Tuckman's concept received appendix 3, throughout the first phase of team growth, people may not bond, as they are active locating their place in the team. By combining the marketing and advertising division's job, there might be the same initial separate which can bring about the 2nd stage of 'storming' where the teams challenge each other. It is just during the third phase or 'norming' when they would come together to share concepts before the team can bring about harmony in the 4th stage 'carrying out'.

When people are provided with adjustment, they go into stage one and so there may be emotions like sadness, uncertainty, aggravation, rage, fear, denial and disorientation.The situation at the advertising and marketing department of Teuer Furniture A Discounted Cash Flow Valuation is similar so Lewis can get comfy with the idea that it is not phenomenal habits. It is throughout this phase that Lewis will certainly have to give guidance to the department so that they can find a feeling of direction. It can be seen just how Krasnow has actually already made this transition easier by making Lewis get entailed in the department a year before his actual departure.
Vrio Analysis
Maslow's Requirement pecking order: The OB issue related to insecurity at the workplace has actually been triggered first of all by the change in monitoring and also secondly by the reality that the merger will no longer be launched. Abraham Maslow in his Concept of 'Needs Power structure' (appendix 5) has discusses the significance of 'safety requires as being a reduced degree need of a human for setting off inspiration. As seen in the pyramid shared in appendix 3, we can see exactly how 'the demand to feel safe and secure and untouched' is at the second degree of needs. Prior to a worker can be made to develop psychologically, he requires to have his 'Physiological 'and also 'Security' requires satisfied. This indicates that unless the employees are made to really feel safe and secure regarding their existing work status in Teuer Furniture A Discounted Cash Flow Valuation they might not get to 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Teuer Furniture A Discounted Cash Flow Valuation Case Study

Effects of Analysis.

The OB analysis has looked at different theories to understand just how to handle the present scenario available. The complying with three alternatives have been recommended to aid Lewis manage the organizational challenges in the marketing department. Each of these alternatives has been proposed for easing the transition needed to bring the marketing division according to the needs of the market and for making the cultural modification that would certainly adhere to once the present leader leaves.

Integration of marketing and advertising features. Separating Adverting and also Production features. Assimilation of Advertising And Marketing with Workflow.

Examination of Alternatives.

Combination of Marketing & Advertising And Marketing Functions: The in-house marketing company of Teuer Furniture A Discounted Cash Flow Valuation is already stamina for the company in terms of saving up on overheads connected to advertising and marketing and also promotion. Given that no brand-new employment has been done after Bridget Cole's separation with the reporting line being straight assigned to Krasnow for the advertising and marketing function, this is a desirable opportunity for incorporating the advertising and marketing features. Judith Shapiro who has actually earlier been interviewed by Lewis during the earlier merging days has know-how in business-to-business advertising along with firm as well as retail advertising experience. As soon as Krasnow leaves, Lewis can hire Shapiro as an EVP for advertising and marketing to manage both advertising and marketing features.

The benefit of this technique is that it will certainly integrate both functions while reducing the requirement for employing an extra source for advertising and marketing. Lewis would certainly be heading the advertising division and also in any kind of case her substitute would be required for the existing function that she is doing. The drawback of this alternative is that outside hiring may produce bitterness from internal employees who might be eying the placement of EVP after Lewis takes over Krasnow's setting.

Separating Adverting and Manufacturing: Offered the affordable stress as well as high top quality job needed from the advertising and marketing company, it is advised that Lewis ought to permit the production system to be a separate feature from the advertising unit. Considering that the majority of marketing companies had these two functions as separate devices, it makes even more feeling to follow the norm.

Integration of Advertising with Workflows: Because Lewis is already taking treatment of the advertising and marketing and also procedures departments at the same time; it makes sense to integrate the two functions considering that she has actually been successfully taking care of both ends. The reality that Lewis has to adjust her management design for the advertising and marketing department recommends that these two departments would certainly be culturally varied.


An analysis of the three choices suggests that integration of advertising and marketing as well as procedures would certainly not be a viable action due to the vast distinctions between the 2 departments regardless of the reality that currently Lewis is dealing with both. While splitting up of the manufacturing feature may have been a beneficial relocation for the advertising and marketing department, the truth that it would indicate putting a third feature under Lewis's wing means this need to be avoided.

Action Plan.
Lewis will certainly take control of the role of EVP Marketing after Krasnow leaves.

Advertising and Marketing features would certainly be combined.

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

Production function will certainly remain part of advertising and marketing under advertising function.

Lewis will divide herself from operations.

A democratic management style with staff member empowerment will certainly be used in advertising and marketing department.

Open up door policy and emphasis on cross department interaction will be targeted at eliminating dissonance.

Backup strategy.

If the assimilation does not exercise as planned, a contingency plan would adhere to which would certainly divide the manufacturing feature from the advertising and marketing function to lower the tons on the SVP of advertising and marketing. In case Judith Shapiro does not get employed, Lewis will certainly be heading the advertising division without an SVP. Because case the manufacturing function will most definitely be divided by putting it under an SVP production.