The Determinants Of Interest Rates Case Study Solution


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The Determinants Of Interest Rates Case Study Solution

Background and Facts

The Determinants Of Interest Rates an office supplies store for little as well as average sized organisations has lately been involved in planning for a merger with its rival House Deport, which has actually impacted performance degrees in departmentswith the senior manager associated with legal problems put forth by the federal Profession Commission. With the Advertising Head advancing the news of his separation from the firm in one year, Jeannie Lewis, the current head of procedures has been asked to take the duty in the near future. With obstacles in the type of a potential cultural change and also low staff member spirits, the company is in need of a full reengineering initiative at the marketing department.

Problem Declaration
Porter's 5 Forces Analysis
The possible cultural modification at the advertising division of The Determinants Of Interest Rates is boosting unpredictability in the workplace bring about numerous difficulties for the Jeannie Lewis who would be changing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a major duty in affecting calculated choices since Stapes Inc. needed to desert its plans of merging with Workplace Deport after the Federal Profession Compensation's intervention while doing so. Offered the truth that the store has a global visibility with branches in UK, USA, Canada and also Germany, political factors in each of these countries might have the ability to affect efficiency or critical objectives. Federal Trade Commission's antitrust match versus the merging took up valuable time of the organization's elderly monitoring recommending that 'political' factors can have major implications for an international service.

Economic Factors: Financial factors such as the emergence of local business in the worldwide circumstance suggest that The Determinants Of Interest Rates is flourishing in a setting where there is prospective development of organisations. Along with this, fact that store customers are mostly seeking workplace supplies for office recommends that the market has a rising pattern of entrepreneurs and also home based services.

Social factors: Social fads in the economic climate reveal that consumers are trying to find convenience along with appealing rates. Market research demonstrates how the client for The Determinants Of Interest Rates does not have awareness regarding locating options which can provide a mix of ease and also low costs.

Technical factors: Modern technology plays a crucial role in The Determinants Of Interest Rates's business approach particularly as the company is piloting Technology facilities which would use innovation sales as well as assistance in the type of memory upgrades, outer installations. (Recap of PARASITE in appendix 2).

OB Issues and Effects.

A number of underlying Organizational Actions concerns can be seen in The Determinants Of Interest Rates's case as highlighted in this section.

Apprehensions concerning cultural adjustment: There is uneasiness about a cultural adjustment that would certainly take place when Todd Krasnow leaves from his setting as the Executive Vice President of Advertising And Marketing with the majority of the personnel already showing unhappiness over this prospective step. This predicted modification has actually created anxiety in the office which has actually been combined with the past stress of preparing the company for a prospective merging with Home Deport.
Pest Analysis
Difficult Task Environment for Newcomers: There is scarcity of personnel that can match the demanding environment of a fast-paced organization. Not just does this result in trouble in finding the right people, it places stress and anxiety on new hires as can not stand up to the speed as well as pressure that the company expects them to birth.

Twin Coverage Lines: Newbies discover this organizational society troublesome as well as tough to deal with specifically as dotted line relationships are suggested to be weaker as a whole and also objective setting as well as efficiency examination is still done by the solid line supervisor. This indicates that newbies can shed clearness concerning their respective duties and also goals specifically as populated line reporting does not maintain them in straight communication with the strong line supervisors.

Bitterness From Cross Departmental Hiring: Krasnow's decision to make Lewis his follower instead of Bridget Coles despite the fact that it had actually been hypothesized that the latter would take Krasnow's setting came as a blow to her morale. Lewis may have been qualified and ideal for the job but the reality that Kransnow's separation would certainly make Coles a straight record to Lewis might have been the reason for Coles' resignation from services.

Worry & Job Instability: Fear as well as instability can be determined as two significant concerns that Lewis would be handling particularly as the merging has actually currently be cancelled and 2 senior executives of the advertising division would be leaving. The whole responsibility of the department would be falling on Lewis's shoulders that would not simply supervise of brining concerning a social adjustment yet would also need to prove herself in her new duty.

Incompatible Monitoring Style of Leader: Lewis's monitoring design and also its conflict with the advertising and marketing division's role can likewise be viewed as an OB difficulty especially as she has actually been made use of to taking care of issues in the procedures division where personnel are instructed to concentrate on procedures as well as get them right. The marketing division on the other hand can be seen as a group of individuals that are utilized to being supported by Krasnow that focused extra on result than processes.

Interdepartmental Arguments: Interdepartmental differences between three divisions, advertising, merchandizing and procedures respectively over the allotment of the marketing mix can be determined as one more OB issue. The advertising and marketing department does not share the same vision as the various other two departments relating to the aloocation of the advertising and marketing mix twoards promotions and also advertsing, the merchandizing and procedures departments do not concur over the advertising and marketing mix allotment amongst one an additional either.

Disintegration in Advertising Department: Disintegration between the advertising and marketing departments can be recognized as an additional OB issue which can require additional focus. The fact that the advertising and marketing areas in the marketing division are disconnected is preventing both departments from getting from each various other's experience and also competence. Integration of advertising with retailing as well as operations would certainly end up being harder if the advertising and marketing department itself is disintegrated which can be an additional potential OB problem.

The Determinants Of Interest Rates Analysis

Numerous theories have been utilized to explain the situations to get more clarity about the situation available.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, most managers believe that staffs are passive and also lazy, have little passion as well as stand up to modification. The tough variation of this concept emphasized browbeating, tight controls, threats and also penalties. Gradually it produces reduced performance, subtle sabotage as well as competition (Deal, 2003). Although the scenario at The Determinants Of Interest Rates is not totally following Theory X, it can be seen that brand-new hires are discovering this environment rather stressful which might ultimately bring about a higher disposition of the management in the direction of Theory X. Based on McGregor's promoted sight, which he called Theory Y, the crucial task of the administration is to set up business problems to make sure that individuals can attain their very own goals best by routing their efforts in the direction of organizational benefits. If people find no fulfillment in their job, the monitoring would have little selection however to count on concept X as well as external control (Bargain, 2003). Even while evaluating Lewis's monitoring style, concept X may have appropriated in the procedures division to some extent however the Marketing department would call for reliance on Concept Y so as to get the creative thinking and creativity from the groups.

Tuckman's Synergy Theory: Regarding Lewis's worry regarding bringing consistency in between the marketing and advertising department is worried, this would at first bring about contrast as talked about by Bruce Tuckman in his 'Team effort Theory'. (Tuckman, 1965). Based on Tuckman's theory shown in appendix 3, throughout the first stage of group development, individuals might not bond, as they are busy discovering their area in the team. By incorporating the marketing and advertising department's work, there may coincide preliminary disconnect which can result in the second stage of 'storming' where the teams challenge one another. It is only during the 3rd stage or 'norming' when they would certainly come with each other to share concepts prior to the group can bring about harmony in the fourth stage 'executing'.

When people are provided with adjustment, they get in stage one and also so there may be feelings like unhappiness, uncertainty, stress, anger, anxiety, denial as well as disorientation.The circumstance at the advertising department of The Determinants Of Interest Rates is comparable so Lewis can obtain comfy with the concept that it is not extraordinary habits. It is throughout this phase that Lewis will have to offer assistance to the division so that they can locate a feeling of instructions. It can be seen how Krasnow has actually already made this change less complicated by making Lewis get included in the division a year prior to his real departure.
Vrio Analysis
Maslow's Need power structure: The OB issue pertaining to insecurity at the workplace has actually been activated to start with by the adjustment in administration and also second of all by the reality that the merger will no longer be initiated. Abraham Maslow in his Theory of 'Requirements Hierarchy' (appendix 5) has goes over the significance of 'safety needs as being a lower level demand of a human for activating inspiration. As seen in the pyramid shared in appendix 3, we can see just how 'the need to really feel safe and safe' is at the second level of requirements. Before a staff member can be made to develop mentally, he requires to have his 'Physical 'and 'Safety and security' needs met. This shows that unless the employees are made to really feel safe concerning their current work status in The Determinants Of Interest Rates they might not get to 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for The Determinants Of Interest Rates Case Study

Ramification of Analysis.

The OB analysis has actually taken a look at different concepts to comprehend how to handle the current situation handy. The complying with 3 alternatives have been recommended to assist Lewis take care of the business challenges in the advertising and marketing division. Each of these alternatives has been suggested for reducing the transition required to bring the marketing department according to the demands of the market and for making the cultural change that would certainly adhere to when the current leader leaves.

Assimilation of advertising and marketing features. Dividing Adverting and Production features. Combination of Advertising with Operations.

Assessment of Alternatives.

Integration of Advertising And Marketing & Advertising And Marketing Functions: The in-house advertising firm of The Determinants Of Interest Rates is currently stamina for the company in regards to saving up on expenses related to advertising and promotion. Given that no brand-new employment has been done after Bridget Cole's separation with the reporting line being directly assigned to Krasnow for the marketing function, this is a beneficial chance for integrating the marketing and advertising functions. Judith Shapiro that has earlier been talked to by Lewis during the earlier merger days has proficiency in business-to-business advertising and marketing together with firm as well as retail advertising experience. When Krasnow leaves, Lewis can work with Shapiro as an EVP for marketing to handle both advertising and marketing features.

The advantage of this technique is that it will integrate both features while minimizing the demand for employing an added source for advertising. Lewis would be heading the marketing division and also in any type of case her substitute would certainly be needed for the current duty that she is executing. The drawback of this option is that outside hiring may produce bitterness from internal workers that may be considering the position of EVP after Lewis takes control of Krasnow's placement.

Separating Adverting and Production: Offered the affordable stress and also high quality work needed from the advertising firm, it is recommended that Lewis must enable the production unit to be a different function from the advertising system. Given that many advertising firms had these two functions as separate devices, it makes even more feeling to follow the standard.

Integration of Marketing with Procedures: Because Lewis is currently taking care of the advertising and marketing and procedures departments simultaneously; it makes sense to incorporate the 2 features considering that she has been efficiently taking care of both ends. The truth that Lewis has to adapt her administration design for the marketing division recommends that these two departments would certainly be culturally diverse.


An evaluation of the three options suggests that integration of advertising and also operations would certainly not be a feasible move due to the vast differences between both divisions despite the fact that presently Lewis is dealing with both. While separation of the manufacturing function might have been a beneficial step for the advertising and marketing department, the fact that it would imply placing a third feature under Lewis's wing indicates this should be prevented. The integration of the advertising and marketing department is the best option in terms of getting the ideal arise from the department. An activity plan for this option is discussed listed below.

Action Strategy.
Lewis will take control of the role of EVP Advertising and marketing after Krasnow leaves.

Advertising and Marketing functions would be merged.

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

Manufacturing feature will stay part of marketing under advertising and marketing feature.

Lewis will divide herself from operations.

An autonomous leadership style with employee empowerment will certainly be made use of in marketing department.

Open door plan as well as emphasis on cross department interaction will certainly be aimed at eliminating dissonance.

Contingency strategy.

If the integration does not work out as planned, a backup strategy would certainly follow which would certainly separate the production feature from the marketing function to lower the tons on the SVP of marketing and advertising. In case Judith Shapiro does not get worked with, Lewis will certainly be heading the advertising department without an SVP. In that case the manufacturing function will most definitely be divided by positioning it under an SVP production.