The Kashagan Production Sharing Agreement Psa Case Study Analysis


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The Kashagan Production Sharing Agreement Psa Case Study Analysis

Background and Facts

The Kashagan Production Sharing Agreement Psa a workplace supplies seller for tiny and also moderate sized organisations has actually lately been involved in preparing for a merging with its competitor Residence Deport, which has impacted performance degrees in departmentswith the senior manager associated with legal difficulties presented by the federal Trade Compensation. With the Advertising and marketing Head advancing the information of his separation from the firm in one year, Jeannie Lewis, the present head of operations has actually been asked to take the function in the future. With challenges in the kind of a prospective cultural modification and reduced worker morale, the company wants a total reengineering initiative at the marketing department.

Issue Statement

The possible social adjustment at the advertising and marketing division of The Kashagan Production Sharing Agreement Psa is boosting uncertainty in the working environment causing numerous challenges for the Jeannie Lewis that would certainly be changing the head of the division in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant role in affecting critical decisions given that Stapes Inc. had to desert its plans of merging with Office Deport after the Federal Profession Commission's treatment at the same time. Given the truth that the store has a worldwide visibility with branches in UK, USA, Canada and Germany, political factors in each of these countries may be able to affect efficiency or critical goals. Federal Trade Payment's antitrust suit versus the merger took up beneficial time of the organization's elderly management suggesting that 'political' factors can have major implications for a global service.

Economic Factors: Financial factors such as the emergence of local business in the global situation recommend that The Kashagan Production Sharing Agreement Psa is prospering in an environment where there is prospective growth of companies. Fact that shop customers are primarily looking for office products for residence workplaces recommends that the market has an increasing fad of entrepreneurs and home based organisations.

Social factors: Social trends in the economic climate reveal that clients are looking for comfort as well as attractive prices. Marketing research shows how the consumer for The Kashagan Production Sharing Agreement Psa lacks awareness concerning finding solutions which can provide a combination of benefit and low costs.

Technological factors: Modern technology plays an essential role in The Kashagan Production Sharing Agreement Psa's company strategy specifically as the organization is piloting Innovation centers which would offer technology sales as well as assistance in the form of memory upgrades, outer installments. (Recap of BUG in appendix 2).

OB Issues and also Manifestations.

A number of underlying Business Behavior issues can be seen in The Kashagan Production Sharing Agreement Psa's case as highlighted in this area.

Apprehensions concerning cultural change: There is worry about a social change that would certainly happen once Todd Krasnow leaves from his position as the Exec Vice President of Advertising And Marketing with a lot of the staff members already revealing discontent over this prospective step. This anticipated modification has actually developed stress in the workplace which has actually been coupled with the past stress of preparing the firm for a possible merger with Residence Deport.

Stressful Work Setting for Newcomers: There is shortage of personnel that can match the demanding setting of a busy organization. Not only does this result in trouble in discovering the appropriate people, it puts tension on new hires as can not withstand the rate as well as stress that the organization expects them to bear.

Twin Reporting Lines: Newcomers locate this organizational culture difficult and challenging to deal with especially as dotted line relationships are meant to be weak in general and objective setting and also efficiency analysis is still done by the solid line manager. This indicates that beginners could shed clearness regarding their particular roles and objectives particularly as populated line reporting does not keep them in direct communication with the solid line managers.

Animosity From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower instead of Bridget Coles even though it had actually been guessed that the last would certainly take Krasnow's setting came as an impact to her spirits. Lewis may have been capable and ideal for the work but the truth that Kransnow's departure would certainly make Coles a straight report to Lewis may have been the reason for Coles' resignation from solutions.

Anxiety & Task Instability: Concern and insecurity can be recognized as two significant concerns that Lewis would be dealing with specifically as the merging has actually currently be terminated and 2 senior executives of the marketing division would be leaving. The whole obligation of the division would certainly be falling on Lewis's shoulders that would not simply be in charge of brining regarding a cultural adjustment but would likewise have to confirm herself in her new function.

Incompatible Monitoring Design of Leader: Lewis's management style as well as its incompatibility with the marketing department's duty can additionally be viewed as an OB obstacle particularly as she has been used to handling problems in the operations division where workers are taught to concentrate on processes as well as get them right. The advertising and marketing department on the various other hand can be viewed as a group of individuals that are utilized to being nurtured by Krasnow who concentrated much more on output than procedures.

Interdepartmental Arguments: Interdepartmental disagreements between 3 divisions, advertising and marketing, merchandizing and also procedures specifically over the allowance of the advertising and marketing mix can be identified as an additional OB problem. The marketing department does not share the same vision as the other two divisions relating to the aloocation of the advertising mix twoards promos and also advertsing, the merchandizing and also procedures divisions do not concur over the advertising and marketing mix allotment among one an additional either.

Disintegration in Marketing Division: Disintegration in between the marketing and advertising divisions can be determined as another OB issue which can need further attention. The truth that the marketing and advertising sections in the advertising and marketing division are detached is preventing both divisions from getting from each various other's experience and knowledge. Integration of marketing with retailing and also operations would certainly come to be more difficult if the marketing department itself is disintegrated which can be one more prospective OB problem.

The Kashagan Production Sharing Agreement Psa Analysis

Different concepts have been used to describe the circumstances to obtain further quality regarding the scenario available.

McGregor's Concept X & Y: According to Douglas McGregor's Concept X, many managers believe that staffs are passive and lazy, have little ambition and resist adjustment. The tough version of this concept stressed coercion, tight controls, dangers as well as punishments. Over time it produces low productivity, subtle sabotage as well as competition (Bargain, 2003). The circumstance at The Kashagan Production Sharing Agreement Psa is not entirely complying with Concept X, it can be seen that brand-new hires are locating this environment instead demanding which may eventually lead to a higher disposition of the monitoring towards Concept X. As per McGregor's promoted sight, which he called Concept Y, the essential job of the administration is to set up business problems to ensure that individuals can accomplish their own objectives best by routing their initiatives towards business rewards. If individuals locate no complete satisfaction in their job, the management would certainly have little selection however to count on theory X and also outside control (Offer, 2003). Even while assessing Lewis's management style, theory X may have appropriated in the operations division somewhat but the Advertising division would certainly need dependence on Theory Y to get the creativity as well as originality from the groups.

Tuckman's Synergy Theory: Regarding Lewis's issue concerning bringing consistency between the marketing and advertising department is worried, this would initially cause clash as reviewed by Bruce Tuckman in his 'Synergy Concept'. (Tuckman, 1965). As per Tuckman's concept shown in appendix 3, throughout the preliminary stage of group growth, individuals might not bond, as they are active finding their area in the team. By incorporating the advertising and marketing department's job, there might coincide initial disconnect which could result in the 2nd stage of 'storming' where the teams challenge one another. Nevertheless, it is only throughout the third phase or 'norming' when they would collaborate to share suggestions before the group can produce harmony in the 4th phase 'carrying out'.

Bridges' Shift Design: According To William Bridge's theory (appendix 4), people are quite unpleasant with change, which is obvious by the circumstance at The Kashagan Production Sharing Agreement Psa The scenario can be seen as a typical training course of life if is examined as per Bridge's concept where he discusses that people undergo three phases of change when they experience modification. 'Ending, shedding and Releasing', 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 unhappiness, uncertainty, irritation, temper, anxiety, denial and also disorientation.The circumstance at the marketing division of The Kashagan Production Sharing Agreement Psa is similar so Lewis can get comfortable with the idea that it is not remarkable habits. In the 2nd stage, there might be a need to link the void in between the brand-new as well as old society so Lewis might have to encounter this ordeal as soon as Krasnow leaves. There might be low morale and also low efficiency at this stage which need to not be taken as a trouble. It is throughout this phase that Lewis will certainly have to provide support to the department so that they can discover a sense of direction. It can be seen just how Krasnow has actually already made this transition much easier by making Lewis get involved in the division a year prior to his actual separation. According to Bridges' Version, stage 3 will certainly bring about openness to knowing, High energy and also dedication as individuals will certainly embrace the modification (Bridges, 2004).

Abraham Maslow in his Theory of 'Demands Hierarchy' (appendix 5) has discusses the importance of 'safety needs as being a reduced degree need of a human for triggering motivation. As seen in the pyramid shared in appendix 3, we can see how 'the demand to really feel safe as well as out of threat' is at the second degree of needs. Prior to a staff member can be made to develop mentally, he requires to have his 'Physical 'and 'Safety and security' needs met.

SWOT Analysis for The Kashagan Production Sharing Agreement Psa Case Study

Implication of Analysis.

The OB analysis has actually considered different concepts to recognize exactly how to cope with the present circumstance available. The complying with three alternatives have actually been suggested to assist Lewis manage the business challenges in the advertising division. Each of these options has been suggested for easing the shift needed to bring the advertising division in line with the requirements of the marketplace and for making the social modification that would certainly follow when the current leader leaves.

Integration of advertising and marketing features. Separating Adverting and also Production functions. Integration of Advertising with Operations.

Analysis of Alternatives.

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

The advantage of this technique is that it will incorporate the two functions while decreasing the demand for employing an additional source for advertising and marketing. Lewis would be heading the advertising division and also in any case her replacement would be needed for the current function that she is carrying out. The downside of this choice is that external hiring might produce bitterness from inner employees who may be eying the placement of EVP after Lewis takes control of Krasnow's position.

Separating Adverting as well as Production: Provided the competitive stress as well as top quality job required from the advertising agency, it is suggested that Lewis ought to allow the production system to be a separate function from the advertising and marketing system. Since a lot of ad agency had these two functions as separate devices, it makes even more sense to adhere to the norm. In addition to this, both functions might have the ability to focus on their core activates extra successfully. However, the downside of this method would certainly be that extra costs would certainly need to be borne for setting up separate production functions. A manufacturing head may have to be worked with which might boost overheads for the organization.

Assimilation of Advertising with Procedures: Given that Lewis is currently taking treatment of the marketing as well as operations divisions simultaneously; it makes feeling to incorporate the two features considering that she has actually been successfully taking care of both ends. The fact that Lewis has to adapt her administration design for the advertising and marketing department recommends that these two divisions would certainly be culturally diverse.


An examination of the three choices indicates that integration of marketing and also procedures would not be a practical step due to the substantial differences between both divisions although that presently Lewis is dealing with both. While separation of the manufacturing feature may have been a desirable step for the advertising department, the reality that it would imply putting a 3rd function under Lewis's wing suggests this need to be stayed clear of too. The combination of the advertising and marketing department is the very best choice in regards to obtaining the optimum arise from the department. An action prepare for this alternative is discussed listed below.

Action Strategy.

Lewis will certainly take control of the role of EVP Advertising after Krasnow leaves.

Advertising and Marketing features would be combined.

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

Production function will certainly stay part of advertising under advertising function.

Lewis will separate herself from operations.

A democratic leadership style with employee empowerment will be used in marketing division.

Open up door plan and also emphasis on cross departmental interaction will be focused on removing discord.

Backup strategy.

If the combination does not work out as planned, a contingency plan would follow which would certainly separate the production function from the marketing function to reduce the load on the SVP of marketing and advertising. In case Judith Shapiro does not obtain hired, Lewis will be heading the advertising department without an SVP. Because case the manufacturing function will most definitely be separated by placing it under an SVP production.