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Charlotte Beers at O & M Worldwide

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4/6/12

Ashish Pandey Paul Sunny Sudhanshu Vardhan Sunil Mohta

Group 1: (G11-069) (G11-093) (G11-110) (G11-113)

Was the crisis of O & M in late 1980s due to WPP group acquiring it or was it impending? 4/6/12 .

Yes. it was Impending!! 4/6/12 .

There was the need for cost efficiencies and this prompted the companies to consolidate the product lines and to sell them in more markets worldwide. This effort requires a “strong center” but O & M had “light center and strong regions”. O & M needed a culture of collaboration A quote from the executive -“As clients demanded lower costs and greater service. For example.Changing Business Environment • The businesses were getting globalized so there was a need for advertising agencies to get globalized. The company was aggressively looking to grow in Europe and US. at the start of 1980’s Unilever was the world‘s 26th largest business.” Instead of changing the organization according to the 4/6/12 changing environment O&M focused on doing the same • • • . Advertising agencies were directed to sell the brands worldwide. Ogilvy & Mather – like many large agencies at the time – was slow to make adjustments.

First three disciplines were under a single umbrella but the direct marketing was an independent subsidiary. The role of worldwide headquarters in New York was limited to that of an administrative office.Organization Structure • Local offices had great deal of autonomy. Four core disciplines – Sales promotion.” • • . public relations. a lack of focus on cost. advertising and direct marketing. The model of “light center and strong regions” initially worked wonders for O & M when the globalization was not in the picture. Quote from an executive – “We were a high-cost operation in a low-cost world. and a lack of structured decision 4/6/12 making on business issues. The Local offices had to concentrate on the local clients. There was a lack of financial discipline.

4/6/12 . Shell and American Express raises suspicions regarding the effectiveness of the WMS. WMS served as the crucial point of contact for local offices of O & M and client offices. They were the critical links of the network • The loss of global clients such as Unilever.Worldwide Management Supervisors – Effective?? • Worldwide management supervisors (WMS) were responsible for the coordination of requirements of the Multinational clients.

“The office was run by czars with big accounts . middle-of-the-road. A Quote by longtime executive – “ The next four chairmen did not have his presence. New York” The failure of leadership was evident. People got used to a highly political way of working and work deteriorated” • • 4/6/12 . they were straight forward. David is quirky.Leadership Vacuum • O & M couldn’t find charismatic leaders to fill in the shoes of the David Ogilvy.

The problem was further aggravated by hostile takeover by WPP. 4/6/12 .Conclusion The crisis of O & M in late 1980s was due to change in external environment and it’s failure to change itself according to the environment.