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The Rise And Fall Of Lehman Brothers Case Study Solution

CASE SOLUTION

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The Rise And Fall Of Lehman Brothers Case Study Analysis

Background and Facts

The Rise And Fall Of Lehman Brothers a workplace supplies retailer for small and also average sized organisations has recently been associated with planning for a merger with its rival House Deport, which has influenced efficiency degrees in departmentswith the senior manager associated with legal difficulties put forth by the federal Trade Compensation. With the Marketing Head advancing the information of his separation from the business in one year, Jeannie Lewis, the current head of procedures has been asked to take the role in the near future. With difficulties in the form of a possible cultural change and low staff member spirits, the company requires a total reengineering effort at the advertising and marketing department.

Trouble Statement
Porter's 5 Forces Analysis
The potential cultural modification at the marketing department of The Rise And Fall Of Lehman Brothers is increasing uncertainty in the working environment causing 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 significant duty in affecting critical choices given that Stapes Inc. had to abandon its plans of merging with Workplace Deport after the Federal Profession Compensation's intervention in the process. Given the fact that the store has a global visibility with branches in UK, U.S.A., Canada as well as Germany, political factors in each of these countries might be able to impact performance or critical goals. Federal Trade Compensation's antitrust match versus the merger took up important time of the organization's senior monitoring suggesting that 'political' factors can have severe ramifications for an international service.

Economic Factors: Financial factors such as the appearance of small companies in the global circumstance recommend that The Rise And Fall Of Lehman Brothers is thriving in a setting where there is prospective growth of businesses. Along with this, fact that store customers are mostly seeking workplace supplies for home offices recommends that the market has a climbing trend of business owners and online services.

Social factors: Social fads in the economy reveal that clients are looking for convenience in addition to attractive prices. Market research demonstrates how the consumer for The Rise And Fall Of Lehman Brothers lacks recognition regarding finding solutions which can supply a combination of comfort and also low costs.

Technological factors: Innovation plays a vital duty in The Rise And Fall Of Lehman Brothers's business strategy particularly as the organization is piloting Modern technology centers which would certainly use technology sales and also support in the type of memory upgrades, outer installations. (Summary of BUG in appendix 2).

OB Issues and Manifestations.

A number of underlying Business Habits problems can be seen in The Rise And Fall Of Lehman Brothers's case as highlighted in this area.

Uneasiness regarding cultural adjustment: There is concern about a cultural change that would take place as soon as Todd Krasnow leaves from his setting as the Executive Vice Head Of State of Marketing with a lot of the employee already revealing unhappiness over this prospective step. This anticipated modification has actually produced tension in the office which has been combined with the past stress of preparing the company for a prospective merging with Residence Deport.
Pest Analysis
Demanding Job Setting for Newcomers: There is lack of workers that can match the stressful setting of a fast-paced company. Not only does this result in problem in discovering the ideal individuals, it places anxiety on brand-new hires as can not withstand the speed and stress that the organization expects them to bear.

Dual Coverage Lines: Newcomers discover this organizational society troublesome as well as challenging to handle especially as populated line relationships are suggested to be weak as a whole as well as unbiased setup and performance evaluation is still done by the strong line manager. This means that novices might shed clarity about their corresponding functions as well as purposes specifically as dotted line coverage does not maintain them in straight interaction with the strong line supervisors.

Resentment From Cross Departmental Hiring: Krasnow's choice to make Lewis his successor rather than Bridget Coles even though it had been speculated that the last would certainly take Krasnow's position came as an impact to her morale. Lewis might have been qualified and also suitable for the task but the reality that Kransnow's separation would certainly make Coles a direct report to Lewis may have been the reason for Coles' resignation from solutions.

Anxiety & Job Insecurity: Concern and also instability can be identified as 2 major issues that Lewis would certainly be dealing with specifically as the merging has actually now be cancelled and also two elderly executives of the advertising division would be leaving. The entire obligation of the division would certainly be dropping on Lewis's shoulders that would certainly not just supervise of brining about a cultural adjustment however would certainly additionally have to show herself in her brand-new function.

Incompatible Management Design of Leader: Lewis's management design and its incompatibility with the advertising division's duty can likewise be seen as an OB obstacle specifically as she has been made use of to taking care of problems in the operations department where workers are shown to focus on processes and also obtain them right. The marketing department on the various other hand can be seen as a team of people who are used to being nurtured by Krasnow who concentrated more on outcome than procedures.

Interdepartmental Arguments: Interdepartmental arguments in between three divisions, advertising and marketing, merchandizing as well as procedures respectively over the allocation of the advertising and marketing mix can be recognized as an additional OB concern. Although the advertising and marketing department does not share the same vision as the various other two divisions concerning the aloocation of the advertising and marketing mix twoards promotions and advertsing, the merchandizing and also operations divisions do not agree over the advertising mix allowance amongst each other either.

Fragmentation in Marketing Division: Disintegration in between the advertising and marketing departments can be identified as an additional OB concern which could require additional interest. The reality that the advertising and marketing sections in the advertising and marketing division are disconnected is stopping both divisions from gaining from each various other's experience as well as knowledge. Assimilation of advertising and marketing with retailing and procedures would end up being more difficult if the advertising and marketing department itself is broken down which can be an additional prospective OB issue.

The Rise And Fall Of Lehman Brothers Analysis

Various theories have actually been made use of to discuss the scenarios to get further quality regarding the circumstance handy.
Swot Analysis
McGregor's Concept X & Y: According to Douglas McGregor's Concept X, most supervisors think that staffs are easy and also lazy, have little aspiration as well as stand up to change. The scenario at The Rise And Fall Of Lehman Brothers is not totally adhering to Theory X, it can be seen that new hires are discovering this setting instead difficult which might ultimately lead to a better inclination of the monitoring towards Concept X. Even while examining Lewis's monitoring design, theory X may have been appropriate in the operations division to some extent but the Advertising division would certainly call for dependence on Concept Y in order to obtain the imagination as well as creativity from the groups.

Tuckman's Synergy Concept: As far as Lewis's concern concerning bringing consistency in between the advertising and marketing department is concerned, this would initially result in contrast as talked about by Bruce Tuckman in his 'Teamwork Theory'. (Tuckman, 1965). According to Tuckman's concept displayed in appendix 3, during the first stage of group advancement, people may not bond, as they are active discovering their place in the group. By incorporating the marketing and advertising department's work, there might coincide preliminary disconnect which can result in the second phase of 'storming' where the groups challenge each other. It is only throughout the third phase or 'norming' when they would certainly come with each other to share suggestions prior to the team can bring around harmony in the fourth phase 'doing'.

Bridges' Shift Model: According To William Bridge's theory (appendix 4), individuals are fairly uneasy with change, which is noticeable by the circumstance at The Rise And Fall Of Lehman Brothers The scenario can be viewed as a regular program of life if is studied according to Bridge's theory where he explains that people go through three phases of transition when they experience change. 'End, shedding as well as Releasing', The Neutral Zone as well as 'The New Beginning' (Bridges, 2004). When individuals exist with change, they get in stage one and so there might be emotions like despair, unpredictability, frustration, temper, anxiety, denial and disorientation.The circumstance at the advertising department of The Rise And Fall Of Lehman Brothers is comparable so Lewis can get comfortable with the idea that it is not amazing behavior. In the 2nd stage, there might be a need to bridge the gap in between the brand-new as well as old society so Lewis may need to encounter this challenge as soon as Krasnow leaves. There may be reduced morale as well as reduced productivity at this phase which must not be taken as a trouble. It is throughout this stage that Lewis will certainly need to provide guidance to the division to make sure that they can find a sense of direction. It can be seen how Krasnow has actually already made this shift easier by making Lewis obtain involved in the division a year before his real separation. Based on Bridges' Version, phase 3 will cause visibility to understanding, High power and dedication as people will certainly embrace the adjustment (Bridges, 2004).
Vrio Analysis
Abraham Maslow in his Theory of 'Demands Pecking order' (appendix 5) has discusses the significance of 'safety needs as being a lower degree demand of a human for causing inspiration. As seen in the pyramid shared in appendix 3, we can see just how 'the demand to really feel safe and secure and also out of threat' is at the 2nd degree of requirements. Before a staff member can be made to establish mentally, he requires to have his 'Physical 'as well as 'Safety and security' needs fulfilled.

SWOT Analysis for The Rise And Fall Of Lehman Brothers Case Study



Effects of Analysis.

The OB analysis has taken a look at different theories to recognize just how to cope with the current scenario available. The following 3 options have actually been suggested to assist Lewis manage the business challenges in the marketing department. Each of these alternatives has been proposed for alleviating the change needed to bring the advertising division in line with the requirements of the market and also for making the cultural modification that would certainly follow when the existing leader leaves.

Integration of advertising and marketing functions. Separating Adverting as well as Production features. Integration of Advertising And Marketing with Operations.

Examination of Alternatives.

Judith Shapiro that has actually earlier been spoken with by Lewis during the earlier merger days has experience in business-to-business advertising and marketing along with company as well as retail marketing experience. When Krasnow leaves, Lewis can employ Shapiro as an EVP for advertising to handle both advertising as well as advertising and marketing features.

The benefit of this strategy is that it will integrate both features while decreasing the requirement for hiring an extra source for advertising and marketing. Along with this, Lewis would be heading the marketing division and also in any case her replacement would certainly be needed for the current duty that she is executing. The disadvantage of this choice is that outside hiring may bring about bitterness from internal personnel that may be considering the position of EVP after Lewis takes over Krasnow's setting.

Dividing Adverting and Production: Given the affordable pressures and top quality work required from the ad agency, it is advised that Lewis should allow the production system to be a separate function from the marketing unit. Since many ad agency had these 2 functions as separate systems, it makes even more sense to follow the standard. Both features may be able to focus on their core activates more effectively. However, the drawback of this method would be that additional costs would certainly have to be birthed for establishing separate production functions. In addition to this, a production head might need to be hired which can boost expenses for the organization.

Assimilation of Marketing with Workflows: Given that Lewis is currently caring for the advertising as well as procedures divisions simultaneously; it makes sense to integrate the two functions because she has been efficiently looking after both ends. The fact that both divisions currently have significant differences over allotment of resources recommends that this integration may have the ability to bring about consistency specifically as Lewis would certainly be heading both ends.However there are numerous downsides of this action particularly as it would certainly place too much worry over Lewis's shoulders. The truth that Lewis has to adapt her management design for the marketing division suggests that these 2 divisions would be culturally diverse. Along with this, Lewis might not have the ability to apply one type of leadership design to both departments which could cause inefficiency in either one of both features.

Recommendation.



An examination of the 3 options shows that integration of marketing and operations would not be a feasible step due to the vast differences between the two divisions in spite of the reality that presently Lewis is dealing with both. While splitting up of the production feature may have been a beneficial relocation for the advertising and marketing division, the reality that it would certainly imply putting a 3rd function under Lewis's wing means this ought to be avoided.

Activity Plan.
Recommendation
Lewis will take over the function 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 location as SVP of marketing and advertising.

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

Lewis will separate herself from operations.

A democratic leadership style with employee empowerment will be made use of in advertising department.

Open door plan and focus on cross departmental interaction will certainly be aimed at eliminating discord.

Backup strategy.

If the combination does not exercise as planned, a backup plan would comply with which would certainly separate the manufacturing feature from the marketing function to lower the load on the SVP of marketing and advertising. In case Judith Shapiro does not obtain employed, Lewis will certainly be heading the marketing division without an SVP. In that case the production feature will definitely be divided by putting it under an SVP production.