Tnglewoods Organizational Culture and Structure - Case Study Example

Running hed: NLYZING ORGNIZTION nme Nme of the School 2006 Introduction The structure of retil firm refers to the wy in which its humn resources re orgnized nd entils the hierrchy, deprtmenttion, spn of control, nd integrtion mong the vrious units. The structure nd design of n orgniztion re the result of its externl environment, its size, its technology, its gols, nd its leadership. dditionlly, culture ply crucil role. Of particular interest in retil orgniztions is the link between structure nd culture, s the fit between them is essentil to orgniztionl performnce ( Myers, Kssing, 1998) The following pper will discuss this link ssessing operting environment of Tnglewood store. Discussion will be mde bsing on one of mngement prdigms used to review the wy n orgniztion functions. The most suitble prdigm in discussion of orgniztionl culture nd structure is interpretive discourse. Current paradigm was chosen because it assists in defining organizational culture and visualizing the structure of an organization.( As long as interpretetive paradigm aims to characterize how people experience the world, the ways they interact together, and the settings in which these interactions take place and thus, the discussion in present paper will be based on this specific approach (Burrell, Morgn, 1979). In the end, current pper will provide recommendtions for n orgniztion in frmes of chosen prdigm. The structurl chnges of orgniztionl strtegy re presented nd recommendtions to the top mngement tem t Tnglewood re provided. Bckground Tnglewood is leding chin of retil stores proposing items such s clothing, pplinces, electronics, nd home decor. There re totl of 243 stores wth more thn 29600 people employed in the sttes of Wshington, Oregon, Northern Cliforni, Idho, Montn, Wyoming, Colordo, Uth, Nevd, New Mexico, nd rizon. The compny opertes in the moderte price niche, trgeting middle- nd upper-income customers. Tnglewood's strtegic distinction is n "outdoors" theme, with lrge cmping nd outdoor living section in every store. The store lso distinguishes itself by its simple, elegnt, nd uncluttered design concepts for the store nd their in-house products (ilwdi, Keller, 2005). The compny's mission sttement is: "Tnglewood will be the best deprtment store for customers seeking qulity, durbility, nd vlue for ll spects of their ctive lives. We re committed s compny to providing mximum vlue to our customers, shreholders, nd employees. We will ccomplish this gol by dhering to the core vlues of responsible finncil mngement, cler nd honest communiction, nd lwys keeping performnce nd customer service in the forefront" (Dunne, Lusch, Griffith, 2004, p 83). Relyng on sles of non-food tems nd on nterntonl sales particularly n emergng mrkets--for n mportnt prt of the compny's future expnson, Tnglewood hs delvered one of the fstest orgnc growth rtes of ny mjor retler n the world. The process of growth hs been very quick in the lst 5 yers, nd hs involved buyouts of severl smller chins of deprtment stores. While ll the stores under the Tnglewood nme hve the sme bsic look, the mngement styles nd humn resource (HR) prctices still reflect the historicl differences between stores. (Dunne, Lusch, Griffith, 2004). Underpnnng Tnglewood's success s excellent mngement nd n obsesson wth opertonl effcency nd productvty gns, whch the compny uses to keep prces low or to mprove servce rther thn to ncrese ts opertng mrgns. Despte ths mpressve record, Tnglewood s stll reltvely smll compred wth the lkes of Kohl's nd Trget, but t s growng fster (Dunne, Lusch, Griffith, 2004). Despte ths mpressve record Tnglewood stll fces number of chllenges during the fiscl yer. The US retler is smll n comprson wth the lke s Kohl nd TrgetCrrefour so it in order to rech hgher records it hd to substntlly nvest n hrdwre nd softwre of both compnes so tht the sustnble compettve dvntge n ts onlne retlng busness hs been reched. (Dunne, Lusch, Griffith, 2004). The trget udience of Tnglewood is people of ll ges who mke regulr visits to grocery shops. The occuption of people is of vst vriety nd of different income rnge. Prices in Tnglewood re formtted in the wy tht people with vrious money comings could fford the products of certin group. The prices for products differentite in order to stisfy the needs of ll groups of people. (Jones, 2003) Consumption of Tnglewood products is of high rte s long s the brnd is very fmous mong the people of different ge nd occuption. When choosing grocery people would rther prefer the one tht is of cool brnd, thn shop "by the corner of house" tht does is bd-known in public nd does not provide wide mjority of discount system or other specific peculirities tht groceries of such wide scle s Tnglewood usully hve (Jones, 2003). "The concept of being distinguished" is prt of Tnglewood's culture (Jones, 2003). It is common people's psychology to buy the things with fmous brnds. In such wy they tend to prove tht they re different with others, the reson why you cn find mny imittions in the night mrket. Tnglewood might focus on the brnding imge nd price strtegy; it might ttrct more customers to purchse the products (Jones, 2003). Orgniztionl structure of Tnglewood is quite complicted s the objectives nd strtegies for the big compny should be shped by principle "from bottom to the top", mening tht ll personnel should be engged in the performnce of orgniztionl mission. There re mny gents under the hedqurters of Tnglewood, nd the gents re bove the Shop Owner (Jones, 2003) . When creting new product Tnglewood send the smple to the gents in ech re first, then the gents report the order list to the hedqurters fter the Shop Owners order product from them. The Shop Owner pys directly to the hedqurters. Usully there re more thn one Shop Owner of Tnglewood grocery, the hedqurters did not sign contrct with ny Shop Owner. The hedqurters produce the product, the Shop Owner sell the products. However the gents will demonstrte to the Shop Owners (Dunne, Lusch, Griffith, 2004). Analysis/critique In contrast to the classical scholars, most theorists today believe that there is no one best way to organize. What is important is that there is fit between the orgniztion's structure, its size, its technology, and the requirements of its environment. This perspective is known as "Interpretivist Paradigm" and contrasts with the perspective of classical theorists like Weber, Tylor, Fyol, etc. who thought that there probably was one way to run organizations that was the best (Burrell, Morgn, 1979). The structure of most retil stores is reltively similr nd Tnglewood hs essentilly evolved to hve structure tht looks something like the fmilir orgniztionl hierrchy. This ppernce is deceptive, becuse employees t ll levels of the corportion re encourged to mke suggestions regrding opertions. More thn one mjor opertionl chnge hs come from n employee suggestion (Chndler, 2001) According to Bddeleys and Jmes' (1990) research on organizational structure, they firmed resources nd they sustined competitive dvntge. Retil orgniztionl structure hs numerous dimensions: formliztion, speciliztion, stndrdiztion, hierrchy of uthority, complexity, centrliztion, professionlism, nd personnel rtios. mong them, complexity, formliztion, nd centrliztion re focl to our discussion of retil orgniztion (Bddeleys, Jmes, 1990) see Appendix 1. ) Complexity Complexity refers to the number and variety of hierrchicl layers, job titles, and divisions and deprtments within an organization. The more layers and divisions, the higher the complexity of an organization (Bddeleys, Jmes, 1990). It is needed to say that the level of complexity varies within the retail organization. Within Tnglewood, the legal department has many layers of lawyers and staff members servicing the legal needs of different regions of the country, whereas manufacturing may have only one location with two hierrchicl levels. (Bddeleys, Jmes, 1990) b) Formliztion The company that is being discussed has decentrlized retail administration. It is counted to be the cornerstone of organizational policy that is crucial when it comes to company's retail success and some difficulties to overcome every now and then. The latter may relate to the local overpricing of goods, poor service, out-of-stock conditions, and excessive and unbalanced inventories. At the meantime, company officers assume that the dvntges of decentrliztion previl over its disadvantages (Bddeleys, James, 1990). c) Centralization Centralization refers to the distribution of power nd decision mking within n orgniztion. The less the number of groups nd levels involved in decision mking, the more is centrlized firm. In centrlized orgniztions, lrge mjority of ll decisions re mde by top mngers. In decentrlized orgniztions, on the other hnd, decisions re delegted or pushed down to lower levels (Bddeleys, James, 1990). Tanglewood stores are decentralized each of which is managed by a single individual who has three assistant store managers working beneath him or her. Operations is technically in charge of the smallest number of employees, this tends to be a more powerful position because it includes more managerial responsibilities, including staffing the store and training new hires. Department managers are in charge of specific product groups such as electronics, women's clothing, or shoes. For each shift there is also a designated shift leader who completes most of the same tasks as store associates, but also has some administrative responsibility (Jones, 2003). When speaking of organizational culture and structure at Tanglewood, it is needed to separate management's responsibilites carried out within it. Like any company, Tanglewood stands for three main mngement functions that cohesively create an organizational profile of one of the best retail stores. These functions are as follows: 1) plnning: involves defining orgniztionl objectives nd developing the methods nd resources by which they will be ccomplished. (Jones, 2003) 2) controlling: controlling is the process of developing, implementing nd using feedbck systems tht provide continuous informtion on the success of ll system elements tht hve been put in plce in order to chieve the orgniztionl gols. (Jones, 2003) 3) orgnizing: the ctivity of designing nd deciding upon the most pproprite orgniztionl structure for chieving the orgniztion's gols. (Jones, 2003) In compliance with these functions, the company that is being analyzed carries out basic management functions while consciously deciding wht form of position interction network (structure) is the best mtch between the tsk of the orgniztion nd the type of people who re nd will be orgniztionl members. Personnel is one of the lrgest nd most importnt resources at Tanglewood and it is orgnized on the bsis of creting n orgniztionl design tht is consistent with nd supports the selected strtegic choices. The wrong form of structure for the type of people nd/or the tsk leds not only to orgniztionl inefficiencies nd ineffectiveness, but also to people's problems tht so mny environmentl helth mngers complin bout on regulr bsis. Unfortuntely, the orgnizing function at Tanglewood often receives only cursory ttention, presumbly becuse the structure of the orgniztion is ssumed to be wht it is; nd other thn some minor tinkering, usully with titles of positions, it remins the stndrd clssicl design. From working with wide vriety of orgniztions tht were experiencing problems, experience hs shown tht the underlying cuse cn often be ttributed to n imblnce in the people-tsk-structure tringle, nd often it is mismtch between the people nd the orgniztionl structure (Chndler, 2001). Culture nd structure re inseprble, since structure is one of the mjor mnifesttions of culture. The culture of n orgniztion is one of the fctors tht determines the reltionship mong employees nd mngers. s with the other elements, however, the culture of n orgniztion my lso be the result of structure. For exmple, in highly centrlized orgniztion, the implementtion of prticiptive mngement nd employee empowerment will be impossible without chnge in the structure. Thus, the two elements re totlly intertwined. (Bullis, Bch, 1989). Culture within the retil orgniztion cn be referred to s culturl web which is useful tool when considering the culturl context for its business. (Brrett, 1999). Culture generlly tends to consist of lyers of vlues, beliefs nd tken for grnted ctions nd wys of doing business within nd outside the compny. Therefore, the concept of culturl web is the representtion of these ctions tken for grnted for understnding how they connect nd influence the strtegy (Veliyth nd Fitzgerld, 2000; Johnson nd Scholes, 2003). It is lso useful to understnd nd chrcterise both the compny's culture nd the subcultures in dpttion of future strtegies. Wheres mny elements of the Tnglewood opertionl pln hve been bsed on other firms within the retil industry, the compny's culture nd vlues re distinct from most of its mjor competitors. From its inception, this compny hs emphsized employee prticiption nd tems. At orientation, every employee hers the philosophy that Wood and Emerson proclaimed s their vision for employee reltions, "If you tell someone exctly wht to do, you're only getting hlf n employee. If you give someone the spce to mke their own decisions, you're getting whole person." (Jones, 2003, p 31) (is not possible to provide the date, this is just quotation, the date was not indicated) Most retil stores hve strict hierrchy with ssistnt store mngers providing directives to their subordintes, nd most ssocites' primrily follow orders (Jones, 2003). Tnglewood, on the other hnd, hs llowed ech deprtment mnger to formulte distinct methods for running their deprtments in coordintion with the employees they are being supervised. There is still well-defined ordering of job responsibilities, but efforts re mde to involve employees in the decision process when possible(Dunne, Lusch, Griffith, 2004). One of the most importnt culturl elements of the orgniztion is n emphsis on "stright tlk" in ll res of the business (Jones, 2003). This means that managers should co-work with employees in such a way that the latter felt comfortable in proposing new ideas, promoting strategies, improving the culture and working for the positive profile of the company on the market. At Tanglewood employees are provided with informtion on the compny's shre price nd overll profitbility for ech qurter, long with other detils bout compny ctivities. Profit-shring for ll employees is prt of Tanglewood's push to encourge employees to think like mngers. Every shift is run bsed on tem concept. While the most senior ssocite is designted s shift leder, the other members of the tem re encourged to provide ongoing suggestions. ll employees shre ll tsks, so there re no designted "customer contct" or "disply" employees. It is lso expected tht ssocites will mke themselves vilble to help the other members of the tem. Qurterly performnce evlutions include severl items specificlly reflecting the ssocites' interctions with other tem members nd inititive to improve the deprtment.(Jones, 2003). Such an organizational design of Tanglewood provides organizational efficiency and growth. The most important assetes of organization, its employees, are working in a team and successfully carry out projects under strict coordination of manager. Special promotions and individualized programs provide motivation and friendly supporting environment at a company leaves out routine and unites employees. Recommendtion wll further dscuss concrete steps of mplementng the strtegy whch beleve wll mke Tnglewood grocery even more compettve Compny. Lewn (2005) chnge mngement theory sttes tht ll forms of lernng nd chnge strt wth some form of dsstsfcton or frustrton generted by dt tht dsconfrm our expecttons or hopes. So the frst step n promotng the strtegy s dsconfrmng the current stuton n the Compny to the beneft of settng the hgher gols n the future. n order to become motvted to chnge, the Tanglewood must ccept the nformton nd connect t to somethng t cres bout. The dsconfrmton must rouse wht Tnglewood cn cll "survvl nxety" or the feelng tht f nythng wll be chnged the compny wll fl to meet the needs or fl to cheve some gols or dels tht hs been set for themselves ("survvl gult")(Porter, 1980). Secondly, in order to feel survvl nxety or gult, the compny must ccept the dsconfrmng dt s vld nd relevnt. Lernng nxety s the fundmentl restrnng force whch cn go up n drect proporton to the mount of dsconfrmton, ledng to the mntennce of the equlbrum by defensve vodnce of the dsconfrmng nformton. t s the delng wth lernng nxety, then, tht s the key to producng chnge (Johnson, Scholes, 2003). The third step in the chosen theory fter creton of suffcent psychologcl sfety nd denyng dsconfrmng nformton, fter no survvl nxety s felt, nd no chnge tkes plce t s needed to blnce the mount of thret produced by dsconfrmng dt wth enough psychologcl sfety to llow the chnge trget to ccept the nformton, feel the survvl nxety, nd become motvted to chnge. Ths prt of the strtegy n ccordnce to Lewn's strtegy refers to creton of psychologcl sfety or overcomng of lernng nxety. (Lewn, 2005) The next nd the lst step of the strtegy refer to cogntve redefnton. Frst, t s needed to re-defne temwork s the coordnton of ndvdul ctvtes for prgmtc ends, not the subordnton of the ndvdul to the group. f temwork s ndvdul subordnton s redefned, s tretng the group to be more mportnt thn the ndvdul, ll the defenses tht led to qups lke cmels beng horses constructed by commttee, negtve mges of "group thnk," lynch mobs, etc rouse. (Brrett, 1999) Second, the redefnton of temwork lso wll llow Tnglewood to redefne ndvdulsm n wy tht preserves ts prmcy, not to "substtute" groupsm for ndvdulsm (Barrett, 1999). Ths process of redefnton n effect enlrges the concept of ndvdulsm to nclude the blty nd oblgton to work wth others when the tsk demnds t. n other words, helpng tem to wn s not nconsstent wth ndvdulsm. nd, thrd, Tnglewood cn chnge the stndrds by whch ndvdul performnce s rewrded. nsted of rewrdng "rugged ndvdulsm" or the compettve wnnng out over others (whch mkes collbortve behvor look "wek"), ndvduls cn be ncresngly rewrded for ther blty to crete, led, nd prtcpte n tems (whch mkes collbortve behvor look "strong"). The best ndvdul, then, s the one who cn be n effectve tem plyer. (Brrett, 1999) Conclusion Through the report, I hve identified Tnglewood's organizational culture and structure. The reserch hs shown tht Tnglewood tries to build the company uniting these two elements in order to reach best organizational performance and to compete on the retail market. When following such a strtegy it is importntly to her up the reccomndtions to implementing integrted mrketing communictions in the Tanglewood which is the effective process of continully religning mngers' priorities nd resources with orgniztionl gols; science of "plying gme" on the mrket under the conditions of high rivlry nd competing prices. Finlly the growth strtegy is vital prt of every prospering compny which undoubtedly is Tnglewood. When suggesting the growth strtegy I used Lewn's bsc model of chnge tht leds to whole rnge of nsghts nd new concepts in order to enrch chnge theory nd mke chnge dynmcs more understndble nd mngeble. suppose ths model provdes n optml mrketing strtegy for Tnglewood Compny nd wth the help of ths strtegy t wll be possble to buld further becuse ts fundmentl concepts were nchored n emprcl relty. Lewn's concept of cton reserch s bsolutely fundmentl to ny model of workng wth humn systems, nd such cton reserch must be vewed from clncl perspectve s set of nterventons tht must be guded prmrly by ther presumed mpct on the clent system. The mmedte mplcton of ths s tht n trnng consultnts nd chnge gents one should put much more emphss on the clncl crter of how dfferent nterventons wll ffect clent systems thn on the cnons of how to gther scentfclly vld nformton. References: 1. ilwdi, K. nd Keller, K.L. (2005), "Leding retil stores tody," Journl of Retiling, 80 - IS A VOLUME , pp. 331-342 2. Bullis, C., & Bch, B. W. (1989). Sociliztion turning points: n exmintion of chnge in orgniztionl identifiction. Western Journl of Speech Communiction, 53 (IS A VOLUME), pp. 273-293. 3. Burrell, G nd Morgn G (1979) Sociologicl Prdigms nd Orgnistionl nlysis, ldershot: Gower, Seoul: Sgyejul. 4. Bddeleys, Jmes, K. (1990). Firm resources nd sustined competitive dvntge. Journl of Mngement, 17(1), pp. 99-120. 4. Brrett, J. (1999). The trining needs of smll firms. Humn Resource Mngement Journl, 2 (IS A VOLUME), 1-15. 5. Chndler, .D. (2001), Strtegy nd Structure, MIT Press, Cmbridge, M - IS EDITION. 6. Dunne, P.M. Lusch, P.F. nd Griffith, D., (2004), Retiling, Hrcourt College Publishers, Foxworth - IS EDITION, pp. 81-89. 7. Johnson G. nd Scholes K. (2003) Exploring Corporte Strtegy, 6th ed.,Prentice Hill: London - IS EDITION 8. Jones, G. (2003), "UK retil expnsion - the cse of Tnglewood," Interntionl Journl of Retil nd Distribution Mngement, 31 (7) - IS A VOLUME, pp. 18-34. 9. Lewn H. Hl, Organizations: Structures, Processes, and Outcomes, (Prentice-Hall. 2005 - IS EDITION), pp. 184-204. 10. Myers, S. ., & Kssing, J. W. (1998). The reltionship between perceived supervisory communiction behviors nd subordinte orgniztionl identifiction. Communiction Reserch Reports, 15 - IS A VOL, pp. 71-81. 11. Porter M. (1980). How Competitive Forces Shpe Strtegy, The McKinsey Qurtely, Spring 1980, Thousand Oaks, CA: Sage - EDITION, pp.34-50; 12. Veliyth R. nd Fitzgerld E. (2000) Firm Cpbilities, Business Strtegies, Customer Preferences, nd Hypercompetitive rens: The Sustinbility of Competitive dvntges with Implictions for Firm Competitiveness, Competitiveness Review, Vol. 10 Issue 1, pp.56-82; PLEASE NOTE, THAT THE WORD VOL THAT STANDS FOR EDITION IS NOT ALWAYS MENTIONED IN REFERENCING. Appendix 1 CENTRLIZTION STRUCTURE FORMLIZTION COMPLEXITY Read More