Best Buy : organizational and structural problems - Research Paper Example

Best Buy : organizational and structural problems Abstract This paper presented structural and organizational problems of Best Buy, one of the best companies in electronics retailing. On organizational behavior, it showed the problems with personal assistants. In fact, company needs to control their work in order to complete Six Sigma approach of structural design. Moreover, Best Buy revealed complications with omni-channel consistency, which destroys its ability to maintain competitive advantage in offering both online and in-store service. In response to these problems, the paper recommended to check the relevance and effectiveness of Best Buy’s stores and pay close attention to the work of personal assistants in them. Introduction In competitive retail environment, Gulati recognizes the entering of Walmart as the key event in creating crucial challenges for Best Buy, because it led to the entrance of Amazon, Dell, and Costco in this business (18-19). In the given circumstances, previously successful company Best Buy faced the unprecedented need to save its sales and remain important in electronics retail sales. In particular, increased competition evoked Best Buy to integrate its disoriented organizational division under united agenda of driving customer’s value (Gulati 20). Therefore, the maintenance of certain structural and organizational problems within the corporate structure is the crucial problem for the company. In this context, recent sharpening of competition within electronics retail market is the important driver to solve the key problems of company in terms of organizational behavior and structural design. Because of this, current research discusses in detail organizational and structural problems of Best Buy in order to save company’s prominent position on electronic retail market. Problem statement Even though the company understands the importance of saving its current position on electronics retail market, it fails to maintain this recognized necessity to save its client base. In detail, the internal problems of Best Buy causes its inability to provide satisfactory service for the clients. As a result, sales significantly decrease and previously permanent customers do not appreciate company service no more (Rosenblum). In the given analysis, the main problems reveal themselves within the structural design of the company and the organizational behavior its workers demonstrate. On the one hand, enormous increase of Best Buy causes current inability to react quickly on market changes. Among the main structural problems, entrance of Walmart raised an issue of inability of Best Buy to produce and be innovative (Gulati 19). In addition, it has plenty of stores around the U.S. and in the world that are irrelevant (Rosenblum). On another hand, company did not create sustainable corporate culture that orients on clients’ satisfaction. In this context, organizational behavior of personal care of each customer and delivering online orders is not effective. In sum, both these dimensions of problems affect company’s productivity and endanger its sustainability on competitive market. Organization behavior concerns In order to start a discussion on current problems in organizational behavior within Best Buy company, it is crucial to clarify company’s current competitive advantage on market. In this case, Best Buy relies on its “store-within-a-store” concept as an ability to introduce customers “a great shopping experience using the same real estate” (Trefis Team 1). In other words, the importance of both physical stores and online sales creates a situation when company needs to pay equal attention to both these spheres. Due to this, the first concern refers to unequal development of online sales and in-store experience for customers. In 2012, Best Buy failed to fulfill many orders in time for Christmas (O’Donnell). In this context, observers say, “Best Buy is often a target of complaints about late and unfulfilled orders and is the only major store who routinely has these kinds of problems” (O’Donnell). Actually, Best Buy’s management recognized the structural dimension of this problem by stating that cancelation of pre-Christmas order was a result of “a combination of software and process issues” (O’Donnell). While the other competitors can develop only one field among these two, Best Buy’s management must always keep in mind that each decision of it should not only improve either offline or online service but also maintain high-quality cooperation between these platforms. In contrast to online-only electronics retailers, Best Buy needs to optimize its store chain in order to remain successful on this market. Solving of this problem is not that hopeless, since even with current troubles Best Buy’s website is the third most visited on in the U.S. (Trefis Team 2). At the same time, the current tendency of investing in mobile apps and cloud infrastructure (Trefis Team 2) brings danger that the gap between online ordering and in-store service will only deepen. Secondly, many scholars noticed that organizational behavior of low-rank workers in Best Buy does not meet the need to improve effectiveness of company’s service. From the very beginning, introducing personal assistants was a crucial improvement within the Best Buy organization, because it helped the company to survive the hardest times (Gulati 26). However, the practical manifestation of their work does not demonstrate a long-term effectiveness. When the company plans to introduce wedding gift as the part of its 2015 strategy on caring of each customer (Trefis Team 2), the failed process of purchasing neglects all the efforts of corporate management to increase company’s profits. In this perspective, Best Buy employees fail to provide “real assistance to shoppers” (Rosenblum). Even though company’s decision makers recognize different customer groups for its products, they fail to create the new value in contrast to other competitors on electronics retail market. In other words, strengthening of competition within electronics retail market requires from Best Buy to guarantee the practical operation of its incentives. Solutions to organizational and structural problems In the essence of company’s current problems, it faces the lack of talented employees and the presence of different prices online and in the store (Rosenblum). On the first issue, Best Buy needs to become more caring and attentive to the needs of workers who work with customers directly. In the circumstances when electronics retail is highly dependent on the level of customer’s satisfaction and in contemporary sharp competition on this market, Best Buy is better to take into account the position of stakeholders not only in terms of customers but also as company’s staff. On the latter issue of inconsistency, the corporation needs improvements in synchronizing all the platforms on which it sales its products. Even though Best Buy cooperates with Oracle on supplying new systems that forecast demand (O’Donnell) and introduced Curbside as mobile shopping application (Trefis Team 1), these incentives do not fix this core structural problem for the company. On this issue, Best Buy needs to maintain “omni-channel consistency,” which means it should provide identical information both on its website and in its stores (Rosenblum). However, the inconsistency of different retail channels is evident in Best Buy not only in case of providing price and information but also in delivering orders. In this light, the problem needs structural decision that will change the business process Best Buy controls to the core. It is highly important, because inability to fulfill online orders in the physical stores means that Best Buy is losing its competitive advantage on market. Organizational theories In general, organization theory is an interdisciplinary field that attempts to comprehend the phenomenon of organization. Among the spheres that communicate with organization theory, organizational behavior describes the position of person within the company. As a study, organizational behavior systematically investigates the way people act within organizations they work in. By people, this study understands the wide range of groups: from individuals to total organizations (DuBrin 3). Although, organizational behavior excludes direct researching on basic human processes (intelligence, perception, emotions or motivation) (DuBrin 11). At the same time, scope of organizational behavior study includes theories of motivation (as expectancy theories or goal-setting theory) and theories of leadership (role motivation and charismatic leadership theories, to name a few) (Miner). Because of this, it is necessary to mention the whole range of factors that influence organizational behavior, regardless to the nature of these processes. Thus, presented research did not include in its scope emotional component of working process within Best Buy. Moreover, it avoids researching on the exact way company motivates and learns its staff. At the same time, these components found their place in context of their impact on organizational behavior, because the way people feel about their working conditions affects their behavior as workers within Best Buy. In this context, organizational behavior deals with the motivations and types of leadership among company’s participants on different corporate positions (Miner 4). Moreover, the nature of Best Buy changes the type of behavior its workers have. In this case, the type of organization pushes people to behave in certain way. Ideally, most people ae ready to function as effectively as possible, which increases the effectiveness of company itself (Miner 4). In other words, creating of unfavorable conditions within the company decreases its possible effectiveness. So, organizational behavior is closely linked to the structural design of certain organization. In the case of Best Buy, proper research on customer’s needs improved the effectiveness of the work of personal assistant. Since the very establishment, Best Buy had had hierarchal internal organization. However, the changing retail market pushed corporate management to deal with the necessity to create integrated internal structure and appreciate “clustering” of different organizational units around the customer (Gulati 30). While these workers probably understood the needs of their clients, they became motivated and revealed leadership skills through talented sales that increased corporate profits. Structural design approaches As previous section mentions, nature of organization has a direct influence on the productivity of the company in terms of organizational behavior. Thus, it is crucial for the company to create such an internal structure that will create favorable conditions for people working in it and improve company’s effectiveness. In this light, scholar raise the issue of business process design. In this theoretical framework, business process refers to “how something is done in an organization” and design means the way organization’s management manufactures these processes for business (Laguna and Marklund 4). Thus, discussion on structural design approaches refers to vital interests of a firm on maintaining constant functioning of the company. In its essence, business process design is concerned with configuring process architecture in order to satisfy customers in effective manner (Laguna and Marklund 24). Thus, restructuring within Best Buy in creating customer-oriented business refers to the nature of any structural design within organization. In addition, “a profound understanding of what the customers want and thereby what the process is supposed to deliver” (Laguna and Marklund 26) is necessary. Best Buy applied this in part when they used several focus group while clustering their customer base. However, the exact way Best Buy launches changes in the company refers to its business strategy as the style of competing on market (Laguna and Manklund 31). In other words, while working on business process design it is crucial to keep in mind the necessity to maintain company’s competitive advantage in any change applied. As the example of improvements in Best Buy both in operation of online platform and work of personal assistants in stores faces the uniqueness of company’s service in contrast to the other ones. The comprehensive way of meeting customers’ needs in stores fits Six Sigma approach in structural design. In theory, it has five methodological stages; namely, they are defining, measuring, analyzing, improving, and controlling the problem (Laguna and Marklund 84). In practice, in order to change the internal design of electronics stores to satisfy young mothers Best Buy curated several focus groups, analyzed the results of test in already existing store, and improved its sales in the district where young mothers were in the majority of company’s customers. However, the company is still not successful in controlling this process. Recommendations The first recommendation refers to structural design dimension. In this part, there is a necessity to provide sustainable balance between online orders and their offline delivering in stores. In other words, company is better to pay close attention to its omni-channel consistency, which means not only developing of online platforms but also improving service in stores separately. Otherwise, current investments in online platforms bring danger to create a misbalance between online and offline sales. Consequently, Best Buy may lose its competitive advantage and destroy its ability to be the prominent player on electronics retail market. Secondly, in terms of organizational behavior Best Buy needs to control the way their personal assistants work with clients in stores. In this case, company needs to turn back to personal assisting after comprehensive analysis of client base. Because the company has chosen Six Sigma approach to structural design, lack of control on the activity of personal assistants neglects all the previous steps on stores’ restructuring. To solve this, management needs to control personal assistants in more effective manner. Conclusion In sum, this paper analyzes two main problems of current business process of Best Buy. On the one hand, organizational behavior dimension revealed the lack of control over personal assistants. The severity of this problem is so important, because these low-rank workers have direct impact on the level of customers’ satisfaction with company’s service. On another hand, structural design of Best Buy revealed the omni-channel inconsistency between online receiving of orders and in-store delivering of them. In this context, current incentives of Best Buy to create mobile applications and cloud platforms only deepens the gap between these two fields of sales. If not to maintain the balance, company will lose its current competitive advantage on electronics retail market. Work Cited: DuBrin, A. Fundamentals of Organizational Behavior: An Applied Perspective. New York: Pergamon Press, 1978. Print. Gulati, R. Reorganize for Resilience: Putting Customers at the Center of Your Business. Boston: Harvard Business School Publishing, 2009. Print. Laguna, M. and J. Marklund. Business Process Modeling, Simulation and Design. Second edition. Suite: Taylor & Francis Group, 2013. Miner, J. Organizational Behavior 1: Essential Theories of Motivation and Leadership. Oxon and New York: Taylor & Francis, 2005. Print. O’Donnell, J. ‘Best Buy still faces customer service problems, experts say’. USA Today. 12 January 2013. Web. Rosenblum, P. ‘Can Best Buy Survive? Yes, If It Doesn’t Forget to Fix Its Stores, Not Just Sales’. Forbes Business. 12 August 2013. Web. Trefis Team. ‘Four Key Steps Best Buy Has Taken This Far in 2015’. Forbes Investing. 26 February 2015. Web. Read More