Menu

The Determinants Of Interest Rates Case Study Analysis

CASE HELP

Home >> Harvard >> The Determinants Of Interest Rates >>

The Determinants Of Interest Rates Case Study Analysis

Background and Facts

The Determinants Of Interest Rates a workplace materials seller for little and moderate sized services has actually just recently been associated with planning for a merger with its competitor House Deport, which has influenced performance levels in departmentswith the elderly supervisor associated with legal complications presented by the federal Profession Compensation. With the Advertising and marketing Head putting forward the news of his separation from the firm in one year, Jeannie Lewis, the existing head of operations has been asked to take the role in the future. With difficulties in the kind of a potential social change and also low employee morale, the organization needs a complete reengineering effort at the advertising and marketing division.

Trouble Declaration
Porter's 5 Forces Analysis
The prospective social modification at the marketing department of The Determinants Of Interest Rates is enhancing unpredictability in the working environment leading to 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 impacting tactical decisions since Stapes Inc. had to desert its strategies of merging with Workplace Deport after the Federal Profession Commission's intervention in the process. Given the reality that the shop has a global presence with branches in UK, USA, Canada as well as Germany, political factors in each of these countries might be able to influence performance or tactical goals. Federal Trade Commission's antitrust suit against the merger used up useful time of the company's senior management suggesting that 'political' factors can have significant ramifications for a global company.

Economic Factors: Financial factors such as the emergence of local business in the global circumstance recommend that The Determinants Of Interest Rates is prospering in a setting where there is possible development of services. Reality that store clients are mainly looking for workplace products for house offices suggests that the market has a climbing pattern of business owners and residence based services.

Social factors: Social trends in the economy reveal that customers are looking for benefit in addition to appealing prices. Market research demonstrates how the customer for The Determinants Of Interest Rates lacks recognition concerning locating remedies which can supply a mix of ease and also low costs.

Technical factors: Modern technology plays a crucial role in The Determinants Of Interest Rates's service strategy especially as the organization is piloting Modern technology centers which would certainly provide innovation sales and also assistance in the form of memory upgrades, outer setups. (Recap of PEST in appendix 2).

OB Issues as well as Symptoms.

Numerous underlying Organizational Behavior problems can be seen in The Determinants Of Interest Rates's case as highlighted in this section.

Apprehensions about cultural change: There is concern regarding a social adjustment that would certainly happen as soon as Todd Krasnow leaves from his position as the Executive Vice Head Of State of Marketing with most of the employee currently revealing unhappiness over this prospective move. This anticipated adjustment has actually created tension in the workplace which has been paired with the past tension of preparing the company for a prospective merging with Residence Deport.
Pest Analysis
Stressful Job Atmosphere for Newcomers: There is scarcity of workers that can match the stressful setting of a busy organization. Not just does this cause trouble in discovering the appropriate people, it puts stress and anxiety on new hires as can not stand up to the pace and pressure that the company anticipates them to birth.

Twin Reporting Lines: Novices locate this organizational culture troublesome and tough to manage particularly as dotted line connections are suggested to be weak in general and also objective setting and also efficiency examination is still done by the strong line manager. This implies that newbies could shed clarity about their particular duties and goals particularly as populated line reporting does not keep them in straight interaction 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 speculated that the last would certainly take Krasnow's position came as a strike to her spirits. Lewis might have been capable as well as ideal for the task but the reality that Kransnow's departure would certainly make Coles a direct report to Lewis may have been the reason for Coles' resignation from services.

Worry & Work Instability: Concern and also insecurity can be determined as two major issues that Lewis would be managing especially as the merger has actually now be terminated as well as two elderly executives of the advertising and marketing division would certainly be leaving. The entire obligation of the division would be dropping on Lewis's shoulders that would not just supervise of brining concerning a social change but would also have to show herself in her new function.

Inappropriate Administration Design of Leader: Lewis's monitoring design and also its incompatibility with the marketing division's function can likewise be seen as an OB obstacle especially as she has actually been utilized to dealing with concerns in the procedures division where employees are shown to focus on procedures and also get them. The advertising and marketing department on the various other hand can be seen as a group of individuals that are used to being nurtured by Krasnow who concentrated a lot more on output than procedures.

Interdepartmental Disputes: Interdepartmental disputes in between three departments, advertising and marketing, merchandizing and procedures specifically over the allowance of the advertising and marketing mix can be recognized as another OB issue. Although the advertising division does not share the same vision as the various other 2 divisions regarding the aloocation of the advertising mix twoards promos as well as advertsing, the merchandizing as well as procedures divisions do not agree over the advertising mix allocation among one another either.

Disintegration in Advertising Department: Fragmentation between the advertising and marketing departments can be identified as one more OB issue which can need additional interest. The reality that the marketing and advertising areas in the advertising division are detached is avoiding both divisions from acquiring from each various other's experience as well as proficiency. Assimilation of advertising with merchandising as well as procedures would become harder if the marketing department itself is broken down which can be one more prospective OB problem.

The Determinants Of Interest Rates Analysis

Different concepts have been used to clarify the scenarios to obtain more clarity regarding the scenario at hand.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, most managers think that subordinates are easy and careless, have little passion as well as stand up to adjustment. The situation at The Determinants Of Interest Rates is not totally following Theory X, it can be seen that brand-new hires are discovering this atmosphere instead difficult which might eventually lead to a greater inclination of the monitoring in the direction of Theory X. Even while assessing Lewis's administration design, concept X may have been ideal in the operations division to some level however the Marketing division would certainly require dependence on Concept Y in order to obtain the imagination and creativity from the teams.

Tuckman's Teamwork Theory: As much as Lewis's worry regarding bringing consistency between the advertising and marketing and advertising and marketing division is worried, this would originally lead to conflict as discussed by Bruce Tuckman in his 'Team effort Concept'. By incorporating the advertising and marketing and also advertising department's job, there might be the same first disconnect which can lead to the 2nd phase of 'storming' where the teams challenge one an additional.

Bridges' Change Version: As per William Bridge's theory (appendix 4), individuals are rather uneasy with adjustment, which is noticeable by the scenario at The Determinants Of Interest Rates The circumstance can be viewed as a regular training course of life if is examined as per Bridge's concept where he discusses that individuals undergo three stages of transition when they experience change. 'Ending, losing and Letting go', The Neutral Zone and also 'The New Starting' (Bridges, 2004). When people are presented with adjustment, they enter phase one and so there might be emotions like unhappiness, unpredictability, irritation, rage, anxiety, rejection and disorientation.The situation at the advertising and marketing division of The Determinants Of Interest Rates is similar so Lewis can get comfortable with the suggestion that it is not phenomenal behavior. In the second stage, there might be a requirement to link the space between the new and also old culture so Lewis might have to encounter this ordeal once Krasnow leaves. There may be low morale and also low productivity at this phase which should not be taken as a trouble. It is throughout this phase that Lewis will need to offer assistance to the division to ensure that they can find a sense of direction. It can be seen just how Krasnow has actually already made this change less complicated by making Lewis obtain involved in the division a year before his real separation. According to Bridges' Design, phase three will produce visibility to knowing, High energy as well as dedication as people will embrace the change (Bridges, 2004).
Vrio Analysis
Abraham Maslow in his Theory of 'Demands Pecking order' (appendix 5) has reviews the relevance of 'safety requires as being a reduced degree need of a human for triggering inspiration. As seen in the pyramid shared in appendix 3, we can see exactly how 'the requirement to feel secure and out of threat' is at the second level of demands. Before a staff member can be made to establish emotionally, he needs to have his 'Physical 'and 'Safety' requires met.

SWOT Analysis for The Determinants Of Interest Rates Case Study



Effects of Analysis.

The OB analysis has actually looked at numerous concepts to comprehend just how to cope with the current scenario handy. The complying with 3 choices have actually been proposed to help Lewis handle the business difficulties in the advertising division. Each of these choices has been proposed for reducing the change needed to bring the advertising division according to the demands of the marketplace as well as for making the cultural change that would comply with when the present leader leaves.

Assimilation of marketing and advertising features. Separating Adverting and Manufacturing features. Integration of Marketing with Operations.

Analysis of Alternatives.

Judith Shapiro who has earlier been interviewed by Lewis during the earlier merger days has expertise in business-to-business marketing 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 deal with both marketing and also marketing functions.

The benefit of this technique is that it will integrate both features while minimizing the need for employing an extra resource for marketing. Lewis would certainly be heading the marketing department and also in any kind of case her replacement would certainly be required for the present role that she is carrying out. The disadvantage of this choice is that exterior hiring might produce animosity from inner workers that might be looking at the setting of EVP after Lewis takes over Krasnow's placement.

Separating Adverting and also Manufacturing: Given the competitive pressures and high quality job required from the advertising agency, it is advised that Lewis ought to permit the production unit to be a separate function from the advertising device. Since many ad agency had these two functions as separate systems, it makes even more feeling to comply with the standard. In addition to this, both functions may have the ability to concentrate on their core turns on more effectively. Nonetheless, the negative aspect of this technique would certainly be that extra expenses would certainly have to be borne for establishing different manufacturing features. Along with this, a manufacturing head may need to be employed which can enhance overheads for the company.

Combination of Marketing with Workflows: Given that Lewis is already caring for the marketing as well as procedures departments concurrently; it makes sense to incorporate the two functions because she has been efficiently dealing with both ends. The fact that the two departments already have significant differences over appropriation of resources recommends that this integration may have the ability to cause harmony particularly as Lewis would be heading both ends.However there are various drawbacks of this move especially as it would certainly put too much concern over Lewis's shoulders. The truth that Lewis needs to adjust her monitoring design for the advertising department suggests that these 2 divisions would be culturally diverse. Along with this, Lewis might not have the ability to use one sort of leadership style to both departments which could result in ineffectiveness in either one of the two functions.

Recommendation.



An assessment of the 3 alternatives suggests that combination of advertising and marketing and procedures would certainly not be a possible move due to the substantial differences between the two divisions in spite of the reality that presently Lewis is taking care of both. While splitting up of the production feature might have been a favorable step for the marketing division, the truth that it would certainly suggest positioning a third feature under Lewis's wing implies this ought to be stayed clear of.

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

Marketing and advertising functions would certainly be combined.

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

Manufacturing feature will stay component of advertising under marketing function.

Lewis will separate herself from operations.

A democratic leadership design with staff member empowerment will be utilized in marketing division.

Open door policy as well as emphasis on cross department communication will certainly be targeted at getting rid of disharmony.

Contingency strategy.

If the integration does not work out as planned, a contingency plan would certainly comply with which would certainly divide the manufacturing function from the marketing feature to reduce the load on the SVP of advertising and marketing. In case Judith Shapiro does not obtain worked with, Lewis will be heading the marketing division without an SVP. Because case the manufacturing feature will certainly be separated by positioning it under an SVP production.