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The Kashagan Production Sharing Agreement Psa Case Study Analysis

Background and Facts

The Kashagan Production Sharing Agreement Psa an office supplies retailer for tiny and average sized businesses has just recently been involved in planning for a merger with its competitor Home Deport, which has actually affected effectiveness degrees in departmentswith the elderly manager associated with legal problems put forth by the government Trade Compensation. With the Marketing Head putting forward the news of his departure from the firm in one year, Jeannie Lewis, the current head of procedures has been asked to take the duty in the future. With obstacles in the form of a prospective social modification and also reduced employee spirits, the company requires a full reengineering effort at the advertising department.

Issue Statement
Porter's 5 Forces Analysis
The potential social adjustment at the advertising division of The Kashagan Production Sharing Agreement Psa is enhancing unpredictability in the workplace resulting in various challenges for the Jeannie Lewis that would be changing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a major function in affecting calculated choices given that Stapes Inc. had to desert its plans of combining with Workplace Deport after the Federal Profession Commission's treatment in the process. Provided the fact that the shop has a worldwide visibility with branches in UK, UNITED STATES, Canada and Germany, political factors in each of these countries may be able to affect efficiency or tactical objectives. Federal Trade Payment's antitrust suit versus the merger used up important time of the organization's senior management recommending that 'political' factors can have major effects for a global organisation.

Economic Factors: Financial factors such as the emergence of local business in the international circumstance suggest that The Kashagan Production Sharing Agreement Psa is prospering in a setting where there is potential development of companies. Along with this, reality that store customers are mainly searching for office supplies for office suggests that the marketplace has an increasing trend of entrepreneurs as well as home based businesses.

Social factors: Social fads in the economic climate reveal that consumers are trying to find benefit along with appealing rates. Marketing research demonstrates how the consumer for The Kashagan Production Sharing Agreement Psa does not have recognition regarding discovering remedies which can provide a combination of ease as well as low costs.

Technological factors: Technology plays a crucial role in The Kashagan Production Sharing Agreement Psa's company method particularly as the company is piloting Technology centers which would certainly offer modern technology sales and support in the form of memory upgrades, outer installations. (Recap of BUG in appendix 2).

OB Issues and Manifestations.

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

Apprehensions regarding social adjustment: There is uneasiness about a cultural change that would certainly occur once Todd Krasnow leaves from his placement as the Exec Vice Head Of State of Advertising And Marketing with most of the team member currently showing discontent over this potential step. This anticipated modification has actually produced tension in the office which has been coupled with the previous anxiety of preparing the firm for a possible merger with House Deport.
Pest Analysis
Stressful Work Environment for Newcomers: There is shortage of employees that can match the demanding atmosphere of a busy organization. Not just does this bring about difficulty in locating the ideal individuals, it places tension on new hires as can not hold up against the speed and pressure that the company anticipates them to bear.

Double Coverage Lines: Newcomers discover this business culture cumbersome and difficult to deal with especially as populated line partnerships are suggested to be weaker generally as well as objective setup as well as performance examination is still done by the solid line supervisor. This means that newcomers could shed clarity concerning their respective duties and objectives especially as dotted line coverage does not keep them in direct interaction with the solid line managers.

Animosity From Cross Departmental Hiring: Krasnow's choice to make Lewis his successor instead of Bridget Coles although it had actually been guessed that the latter would certainly take Krasnow's position came as a strike to her morale. Lewis might have been qualified and proper for the work yet the fact that Kransnow's departure would certainly make Coles a straight report to Lewis might have been the factor for Coles' resignation from solutions.

Fear & Task Insecurity: Fear as well as insecurity can be determined as two major problems that Lewis would certainly be taking care of especially as the merging has actually now be cancelled and two elderly executives of the marketing department would be leaving. The whole responsibility of the department would certainly be falling on Lewis's shoulders that would certainly not just supervise of brining regarding a cultural change yet would certainly likewise have to verify herself in her new duty.

Inappropriate Management Style of Leader: Lewis's monitoring style as well as its conflict with the marketing division's duty can likewise be seen as an OB difficulty specifically as she has been made use of to managing concerns in the operations division where personnel are educated to concentrate on procedures as well as get them right. The marketing department on the various other hand can be viewed as a group of people that are used to being supported by Krasnow that focused a lot more on output than procedures.

Interdepartmental Disputes: Interdepartmental differences in between three divisions, advertising and marketing, merchandizing and operations specifically over the allocation of the marketing mix can be determined as an additional OB concern. Although the marketing department does not share the very same vision as the other 2 divisions relating to the aloocation of the marketing mix twoards promos and also advertsing, the merchandizing as well as operations divisions do not concur over the advertising and marketing mix appropriation among one another either.

Disintegration in Advertising Division: Disintegration between the marketing and advertising divisions can be recognized as an additional OB problem which can require additional interest. The reality that the advertising and marketing sections in the advertising and marketing department are detached is avoiding both divisions from obtaining from each various other's experience and proficiency. Integration of advertising and marketing with retailing as well as procedures would certainly end up being harder if the advertising and marketing division itself is degenerated which can be an additional prospective OB worry.

The Kashagan Production Sharing Agreement Psa Analysis

Various theories have actually been used to describe the circumstances to obtain further quality about the situation at hand.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Concept X, the majority of supervisors believe that juniors are easy and lazy, have little aspiration as well as withstand modification. The situation at The Kashagan Production Sharing Agreement Psa is not entirely adhering to Theory X, it can be seen that brand-new hires are locating this atmosphere rather demanding which may ultimately lead to a higher inclination of the management in the direction of Theory X. Also while examining Lewis's administration design, theory X might have been appropriate in the operations division to some level but the Marketing department would certainly need reliance on Concept Y in order to get the imagination as well as originality from the groups.

Tuckman's Team effort Theory: As much as Lewis's worry concerning bringing harmony between the marketing and marketing division is concerned, this would originally lead to conflict as discussed by Bruce Tuckman in his 'Synergy Theory'. By combining the advertising and marketing and also advertising division's work, there may be the very same initial detach which can lead to the second stage of 'storming' where the teams test one an additional.

When people are presented with modification, they enter phase one and so there may be emotions like unhappiness, uncertainty, stress, temper, anxiety, denial as well as disorientation.The situation at the advertising department of The Kashagan Production Sharing Agreement Psa is comparable so Lewis can obtain comfortable with the suggestion that it is not amazing habits. It is throughout this stage that Lewis will certainly have to offer assistance to the department so that they can discover a sense of direction. It can be seen how Krasnow has currently made this change much easier by making Lewis obtain entailed in the department a year prior to his actual departure.
Vrio Analysis
Maslow's Demand hierarchy: The OB concern related to instability at the workplace has actually been activated firstly by the adjustment in management and also second of all by the truth that the merger will certainly no longer be started. Abraham Maslow in his Theory of 'Requirements Power structure' (appendix 5) has discusses the significance of 'protection needs as being a lower degree demand of a human for causing inspiration. As seen in the pyramid cooperated appendix 3, we can see exactly how 'the need to feel safe as well as out of danger' goes to the second level of requirements. Prior to a worker can be made to develop psychologically, he requires to have his 'Physiological 'and 'Safety and security' needs satisfied. This suggests that unless the workers are made to really feel safe concerning their current work status in The Kashagan Production Sharing Agreement Psa they might not reach 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for The Kashagan Production Sharing Agreement Psa Case Study

Ramification of Analysis.

The OB analysis has actually looked at different theories to understand how to deal with the present situation at hand. The adhering to three alternatives have actually been proposed to help Lewis take care of the business challenges in the advertising and marketing division. Each of these options has been proposed for relieving the change needed to bring the advertising division in accordance with the demands of the marketplace and also for making the cultural modification that would follow as soon as the existing leader leaves.

Assimilation of advertising and marketing functions. Dividing Adverting and Production functions. Assimilation of Advertising And Marketing with Workflow.

Evaluation of Alternatives.

Judith Shapiro who has earlier been talked to by Lewis during the earlier merger days has know-how in business-to-business marketing along with firm and also retail advertising experience. As soon as Krasnow leaves, Lewis can employ Shapiro as an EVP for advertising and marketing to manage both advertising as well as advertising features.

The benefit of this strategy is that it will incorporate the two functions while minimizing the need for working with an extra source for marketing. In addition to this, Lewis would be heading the marketing department as well as regardless her substitute would be needed for the existing role that she is performing. The negative aspect of this option is that exterior hiring might cause resentment from interior workers who might be eying the position of EVP after Lewis takes control of Krasnow's placement.

Dividing Adverting and Production: Given the affordable pressures and excellent quality job required from the advertising agency, it is advised that Lewis needs to enable the production device to be a separate function from the advertising and marketing unit. Because most advertising agencies had these 2 functions as separate units, it makes even more feeling to comply with the norm. Both features may be able to focus on their core activates much more efficiently. The drawback of this approach would certainly be that additional expenses would have to be birthed for setting up separate manufacturing functions. Along with this, a production head might need to be worked with which might raise expenses for the organization.

Assimilation of Advertising with Procedures: Considering that Lewis is already taking care of the marketing and also operations departments simultaneously; it makes sense to incorporate the 2 functions because she has been successfully taking treatment of both ends. The fact that Lewis has to adjust her administration design for the marketing division recommends that these 2 divisions would be culturally varied.


An evaluation of the 3 alternatives shows that combination of marketing and operations would not be a feasible relocation because of the substantial differences between both departments although that currently Lewis is handling both. While separation of the manufacturing function might have been a positive relocation for the advertising and marketing division, the truth that it would certainly indicate positioning a third feature under Lewis's wing suggests this ought to be stayed clear of. The integration of the advertising division is the most effective choice in regards to getting the ideal results from the department. An action plan for this option is gone over below.

Activity Plan.
Lewis will certainly take control of the duty of EVP Advertising after Krasnow leaves.

Advertising and Marketing functions would certainly be merged.

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

Manufacturing function will certainly remain part of advertising under advertising function.

Lewis will separate herself from operations.

An autonomous management design with worker empowerment will certainly be utilized in marketing department.

Open up door plan and emphasis on cross departmental interaction will certainly be focused on getting rid of dissonance.

Contingency plan.

If the assimilation does not exercise as prepared, a contingency plan would certainly comply with which would 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 get hired, Lewis will be heading the advertising and marketing division without an SVP. In that case the manufacturing feature will definitely be separated by putting it under an SVP production.