Air Miles Canada Case Study Solution


Home >> Kelloggs >> Air Miles Canada >>

Air Miles Canada Case Study Analysis

Background and Facts

Air Miles Canada a workplace supplies store for tiny and also average sized services has actually just recently been involved in preparing for a merger with its competitor House Deport, which has affected performance levels in departmentswith the elderly supervisor associated with legal problems presented by the government Trade Compensation. With the Advertising Head advancing the information of his separation from the firm in one year, Jeannie Lewis, the present head of operations has been asked to take the function in the near future. With obstacles in the kind of a prospective cultural modification and also reduced employee spirits, the organization requires a full reengineering effort at the advertising and marketing department.

Trouble Statement

The potential social adjustment at the advertising and marketing department of Air Miles Canada is enhancing uncertainty in the workplace bring about various difficulties for the Jeannie Lewis who would certainly be replacing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant duty in influencing tactical choices because Stapes Inc. had to desert its strategies of merging with Office Deport after the Federal Trade Commission's treatment at the same time. Given the fact that the shop has a global existence with branches in UK, USA, Canada and also Germany, political factors in each of these countries may have the ability to affect efficiency or critical objectives. Federal Trade Commission's antitrust match versus the merging took up beneficial time of the company's elderly management recommending that 'political' factors can have major ramifications for an international service.

Economic Factors: Financial factors such as the development of local business in the worldwide circumstance suggest that Air Miles Canada is growing in a setting where there is possible growth of businesses. Truth that shop clients are primarily looking for workplace products for home offices suggests that the market has a rising fad of business owners as well as residence based businesses.

Social factors: Social trends in the economic climate show that customers are trying to find ease as well as appealing costs. Market research demonstrates how the consumer for Air Miles Canada lacks awareness about discovering remedies which can offer a mix of convenience as well as affordable.

Technical factors: Innovation plays an essential function in Air Miles Canada's business strategy especially as the organization is piloting Innovation centers which would certainly use innovation sales and support in the form of memory upgrades, peripheral setups. (Summary of BUG in appendix 2).

OB Issues as well as Effects.

A number of underlying Business Behavior concerns can be seen in Air Miles Canada's case as highlighted in this section.

Concerns about social modification: There is apprehension concerning a cultural modification that would occur as soon as Todd Krasnow leaves from his setting as the Executive Vice Head Of State of Marketing with the majority of the employee already showing discontent over this prospective relocation. This expected adjustment has actually produced tension in the workplace which has been combined with the past stress of preparing the firm for a potential merger with Residence Deport.

Stressful Task Setting for Newcomers: There is shortage of workers that can match the stressful environment of a hectic organization. Not only does this cause difficulty in discovering the right individuals, it places tension on brand-new hires as can not stand up to the pace as well as pressure that the organization anticipates them to bear.

Twin Reporting Lines: Newbies discover this organizational culture troublesome as well as challenging to deal with specifically as dotted line relationships are implied to be weaker in general as well as unbiased setup as well as efficiency assessment is still done by the solid line supervisor. This implies that novices could shed clarity regarding their particular functions and also goals particularly as dotted line coverage does not keep them in direct communication with the strong line supervisors.

Resentment From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower instead of Bridget Coles even though it had been speculated that the latter would take Krasnow's position came as an impact to her morale. Lewis may have been capable and also appropriate for the job but the truth that Kransnow's departure would make Coles a straight record to Lewis might have been the reason for Coles' resignation from solutions.

Anxiety & Job Instability: Fear and also instability can be identified as 2 significant issues that Lewis would certainly be handling particularly as the merging has actually currently be terminated and 2 senior execs of the marketing department would be leaving. The entire obligation of the department would certainly be dropping on Lewis's shoulders who would not simply be in charge of brining about a cultural adjustment however would certainly also have to verify herself in her brand-new role.

Inappropriate Administration Design of Leader: Lewis's monitoring design as well as its incompatibility with the advertising division's duty can also be seen as an OB difficulty specifically as she has actually been used to handling issues in the operations division where workers are taught to focus on processes and also get them right. The advertising and marketing department on the other hand can be seen as a group of individuals who are used to being nurtured by Krasnow who concentrated more on result than procedures.

Interdepartmental Disagreements: Interdepartmental disagreements between 3 divisions, advertising, merchandizing as well as operations specifically over the allowance of the marketing mix can be identified as another OB concern. The marketing division does not share the same vision as the other 2 divisions relating to the aloocation of the advertising and marketing mix twoards promos and also advertsing, the merchandizing as well as operations departments do not agree over the advertising mix allowance amongst one another either.

Fragmentation in Advertising Division: Fragmentation between the advertising and marketing divisions can be determined as another OB concern which can require additional interest. The fact that the advertising and marketing sections in the advertising division are detached is avoiding both departments from getting from each other's experience and also know-how. Combination of advertising and marketing with retailing and also operations would end up being more difficult if the advertising and marketing division itself is broken down which can be an additional prospective OB worry.

Air Miles Canada Analysis

Different theories have actually been utilized to clarify the situations to get more clearness about the situation at hand.

McGregor's Theory X & Y: According to Douglas McGregor's Theory X, a lot of managers believe that subordinates are passive and also careless, have little passion as well as stand up to adjustment. The situation at Air Miles Canada is not completely adhering to Theory X, it can be seen that new hires are discovering this atmosphere rather demanding which might ultimately lead to a better disposition of the management towards Theory X. Also while evaluating Lewis's administration design, theory X might have been appropriate in the procedures department to some level yet the Marketing division would certainly call for reliance on Concept Y in order to get the creativity and also originality from the groups.

Tuckman's Synergy Concept: As for Lewis's worry regarding bringing consistency in between the marketing and advertising department is concerned, this would originally bring about contrast as reviewed by Bruce Tuckman in his 'Synergy Theory'. (Tuckman, 1965). As per Tuckman's concept displayed in appendix 3, throughout the initial stage of group advancement, people might not bond, as they are active finding their area in the team. By integrating the advertising and marketing division's job, there might coincide preliminary detach which could lead to the 2nd stage of 'storming' where the groups test each other. However, it is only during the third stage or 'norming' when they would certainly collaborate to share ideas prior to the group can produce harmony in the 4th phase 'executing'.

When individuals are offered with modification, they get in stage one and so there might be feelings like sadness, uncertainty, disappointment, anger, concern, denial and also disorientation.The circumstance at the marketing department of Air Miles Canada is similar so Lewis can obtain comfy with the suggestion that it is not phenomenal actions. It is throughout this stage that Lewis will have to give guidance to the department so that they can find a sense of direction. It can be seen exactly how Krasnow has currently made this transition easier by making Lewis get involved in the department a year before his actual separation.

Abraham Maslow in his Theory of 'Needs Power structure' (appendix 5) has discusses the value of 'security requires as being a lower degree demand of a human for triggering 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 risk' is at the 2nd degree of needs. Before a staff member can be made to develop emotionally, he needs to have his 'Physiological 'and 'Safety' requires fulfilled.

SWOT Analysis for Air Miles Canada Case Study

Ramification of Analysis.

The OB analysis has actually considered different theories to understand exactly how to cope with the present circumstance available. The complying with 3 choices have been recommended to help Lewis take care of the business challenges in the advertising division. Each of these alternatives has been suggested for relieving the change needed to bring the marketing department according to the requirements of the marketplace and also for making the cultural change that would certainly comply with as soon as the present leader leaves.

Integration of marketing and advertising features. Separating Adverting as well as Manufacturing functions. Integration of Advertising with Operations.

Evaluation of Alternatives.

Assimilation of Advertising & Marketing Functions: The internal advertising and marketing firm of Air Miles Canada is currently strength for the organization in regards to conserving up on expenses connected to marketing as well as promotion. Since no new recruitment has actually been done after Bridget Cole's departure with the coverage line being directly appointed to Krasnow for the advertising and marketing function, this is a desirable opportunity for integrating the marketing and advertising features. Judith Shapiro who has actually earlier been talked to by Lewis throughout the earlier merger days has proficiency in business-to-business marketing together with agency and also retail advertising experience. Once Krasnow leaves, Lewis can employ Shapiro as an EVP for marketing to deal with both advertising and marketing functions.

The benefit of this method is that it will incorporate the two features while reducing the demand for hiring an added resource for advertising. Along with this, Lewis would be heading the marketing division and all the same her substitute would certainly be required for the present function that she is doing. The disadvantage of this option is that outside hiring might cause animosity from internal workers that may be eying the setting of EVP after Lewis takes control of Krasnow's setting.

Separating Adverting as well as Production: Provided the affordable pressures and top quality work required from the advertising agency, it is recommended that Lewis must allow the production system to be a separate function from the advertising system. Given that the majority of advertising agencies had these 2 functions as different systems, it makes even more sense to comply with the standard. Both functions may be able to concentrate on their core triggers more successfully. The drawback of this approach would certainly be that added prices would have to be borne for establishing up separate production functions. Along with this, a production head might have to be worked with which might increase expenses for the organization.

Integration of Marketing with Workflows: Because Lewis is already taking treatment of the marketing and procedures divisions at the same time; it makes feeling to integrate the two features because she has actually been effectively taking care of both ends. The reality that Lewis has to adapt her administration style for the marketing division suggests that these two departments would certainly be culturally varied.


An analysis of the three choices shows that combination of marketing and also operations would not be a feasible step because of the substantial differences in between the two departments despite the fact that currently Lewis is dealing with both. While separation of the manufacturing function might have been a beneficial relocation for the marketing department, the truth that it would mean putting a third function under Lewis's wing indicates this need to be avoided. The assimilation of the advertising division is the best choice in terms of obtaining the ideal results from the division. An activity prepare for this alternative is discussed listed below.

Activity Plan.

Lewis will certainly take control of the function of EVP Marketing after Krasnow leaves.

Advertising and Marketing functions would be combined.

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

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

Lewis will certainly divide herself from operations.

An autonomous management design with employee empowerment will certainly be used in advertising division.

Open door policy and also focus on cross department interaction will be aimed at getting rid of discord.

Backup strategy.

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