Organizational Structure of C and C Grocery stores - Case Study Example

Report on the Organizational structure of C & C Name Subject Date Table of Contents Table of Contents 3 Executive summary 4 Introduction 5 Analysis of the Organizational structure 6 Shortcomings of the structure 7 The proposed organizational approach 9 Recommendations 12 Conclusion 15 List of References 16 Executive summary C & C Grocery stores has problems stemming from an organizational perspective. Thorough analysis of the whole company was done as required from the onset. The organizational design of the company whose structure was put to question was assessed with its inadequacies outlined. The weaknesses of the structure have been mentioned in details in this paper and as such, the recommendations on the new format have been proposed. The reasons for restructuring as recommended have been explained from a professional point of view that if implemented C & C Grocery stores will reclaim its lost glory as the leading distributor of grocery. The chain of command that creates conflicts has seen changes made to it by removing some of the layers. The merits that such a structure brings to C & C are exclusively captured in this report. The recommendations herein are made after critical analysis, comparison, and from an expert point of interpretation. Introduction C & C Grocery stores were established in the mid nineteenth century in Charlotte, North Carolina. The company began as a family business owned by Cummins and Bob who were brothers. The company supplied meat and produce in plenty to its clients. The success of the company was associated to many factors. These factors were based on the Cummins’ charisma that centred on his personality. His business style of service to customers though informal was quickly adopted by the employees of the company (Daft 2009, p. 130). This was in addition to the best products that C & C Growers availed to the clients. Good customer service together with high quality products led to the immediate success of the firm. This was coupled with the company’s location that was strategic, making it very accessible. It is through these qualities that the company’s customer base kept growing rapidly. The company simplified these qualities into customer service and satisfaction and in the process attained profitability, expansion, and growth just the two brothers had desired and struggled to achieve. This growth brought in more profits and as a result, the company started expanding. In 1985, the company shifted its headquarters from Charlotte to Atlanta. The move was strategic as the management intended to serve clients in a better manner as the company had grown to the level of operating internationally. The company enjoyed some form of monopoly for almost thirty years before problems that were brought by a poor organizational structure cropped up. The period that followed has seen C & C Grocery stores finding it very difficult to compete with other new companies in the industry including Wal-Mart. The problems that cause this inadequacy have been outlined in this report with proposals of new structures that will eliminate incompetence proposed. The deficiency in the organizational structure of the company contributed greatly to the loss of its position as the market leader in the sale of grocery items. The recommendations that are made have been elaborated in order to facilitate implementation. Analysis of the Organizational structure C & C had its headquarters in Atlanta. The president of the company was Cummins who based in Atlanta. He was deputised by five principal assistants. The first was the vice president in charge of Human resources, there was a vice president in charge of purchasing, and the third had merchandising as his docket. The other two vice presidents handled distribution, finance, and information technology. Three other vice presidents who took care of regions followed this layer of management. One was in charge of the South, the second managed southeast while the third controlled northeast. This team supervised district directors whose jurisdiction spread over various other officers. The officers include the meat and grocery merchandisers, operations and produce managers. The other officers were specialists in operating the district produce, meat, stores, and grocery (Beckman & Nolen 2007, p. 34). The manager in charge of stores controlled the lowest cadre of officers that comprised of departmental managers in the meat, produce, and grocery stores. The officers who were housed at the headquarters had their duties spelt out including supervisory roles in the real estate, merchandising, personnel, purchasing, and financial sections. The officers who oversaw regions had the responsibility of managing individual stores. It is important to mention here that few years before the turn of the twenty first century C & C had more than two hundred stores. Each region had approximately seventy stores spread out in the south, southeastern, and northeastern zones. The management had subdivided each zone so that each had five districts with a maximum of fifteen stores. Supervision of these stores was a duty of district directors. The coordination activities were done through four lines of authority based on specific functions. Only three of these lines reach down to the stores i.e. the produce, the meat, and grocery departments. The duties of the departmental managers included purchasing and selling perishable goods, supervising the green grocer chain, and ensuring that the stores were operating as required. Monitoring the shifts by the employees was also under their watchful eye in addition to ensuring cleanliness is maintained and checking that the actual prices are charged by the sales staff. The managers also maintained inventories records of the stock. All the advertisements whose main role was to attract customers and in the process expand the customer base for the company was a duty set aside for the district-merchandising officers. Shortcomings of the structure The complexity of the structure of management within C & C was the source of all the problems in the company. The structure did not allow proper channels of communication and neither did it give an opportunity for all management levels to undergo the right training (Lusch 2007.p. 167). This comes out clearly, since the success enjoyed by the company for about fifty years was based on Cummins’ charisma. Employees adopted this informally. Poor communication leads to poor performance because the specialized departments fail to strike a balance on matters that relate to specific functions. The company had various departments; this forced it to hire managers of equal number of managers who unfortunately lacked the necessary training, skills, and full authority. If you deny the departmental managers the above needs that will inhibit their upward movement during promotions and transfers. The limited authority was evident when the system required departmental managers to report to district functional specialists. The coordination of these departments towards the company aims became unrealistic forcing most decisions to be handled unilaterally by the management that was at the core of the company. This meant that the company could not respond to both technological and market dynamics as the decision makers were not in touch with the agents of change (Perkins 1999, p. 87). Matters were complicated bureaucracy caused by many levels of management. The irrelevance of this was that most of these line managers did not have specific duties and competence to perform their duties. The long chain resulted into poor cooperation among various departments this in addition to the fact that departmental managers did not have authority to implement changes. Some of them were so simple such as making orders based on the market changes and customer tastes. It became very difficult for the company to achieve the overall aims that could include diversification of products. Employee dissatisfaction especially at the managerial level since it became obvious that personal employee development was never considered. This would have source of motivation to the staff that belonged to that layer. The district supervisor who used their authority to frustrate attempts by the departmental managers to undergo management-training courses caused this problem (Madison 2002, p.66). The plans to derail efforts of the junior managers were executed by making sure they concentrated on operational areas. These actions strained relationships among employees and as such, the company began experiencing poor cooperation among its members of staff. The other effect was that particular managers for instance those in the meat and produce department reported to the district specialists thereby bypassing some of the immediate bosses. These issues contributed to having poor relationships among employees and chances of sabotage could not be ruled out. The proposed organizational approach To solve the problems at C & C it is advisable that the company adopts a three-pronged approach that covers effectiveness. The approach centres on achieving the overall goals through proper operations. This structure examines the whole company organizational structure and singles out the most important areas that need to be eliminated, merged, replaced, and improved. Since it is evident that the problem that is affecting the company stems from the internal management process, the efficiency of the output by these feuding process will be assessed and the outcome will be used to make decisions. Efficiency would play a big role in determining the healthy level of the company as a whole Scroop 2008, p. 47). To get to the conclusions, this structure will analyse role assessment of the different players to identify their specific duties. There is lack of concern by the company structure to link the company to the external environment. This was the reason that led the company to fail to take note of the other companies within the industry that were rising quickly. The new system will establish a structure that would standardize coordination activities (Wisconsin & Indiana 2010, p. 36) . This will create an adaptable working environment for the employees at all levels and enhance communication that will lead to teamwork. By reducing the layers of management, the new approach will decentralize decision-making and encourage clear coordination between the various departments that will spread to the whole company. The new structure will put the three departments that comprise of produce, meat, and grocery under the supervision of the stores manager. The manager also gets the authority needed to control all the transactions in the stores. To make sure that those employees in management have the right skills, the district supervisors’ role that was causing controversies will be changed to overseeing training and skills development. Their roles would also be expanded to include coordination in the stores (Henry 2010, p. 88). The reduced layers of management would translate to increased freedom and authority among the employees. Decisions would be made putting in mind the particular market dynamics where the stores are situated. The new system encourages the company to diversify the products they trade in. Proposals are made to the management to include pharmaceutical products and gourmet products among others. The changes come with increased authority to the stores manager to control and coordinate all activities within the stores. Conflict of interest and confusion of where the final authority rests is eliminated. The creation of team that will be charged with the responsibility of giving advice and help to the employees in the stores will develop teamwork and generate information from the ground as often as possible. This will put the company in touch with what happens in the market and within the industry regularly. This will develop an approach of working as team by employees in the stores (Henry 2010, p. 112). This motivating action will boost the morale of the staff. This is important, as the company has to take a local approach when making decisions. Recommendations After an elaborate analysis of the organizational structure of C & C it is recommended that, the company puts emphasis on achieving both the overall goals and having an operational internal working environment. A good internal operating climate will redefine the duties and responsibilities of the various players internally. This will share out the needed authority and in the process remove rivalry and confusion. Reducing the layers of management meant that the total number of employees to be supervised by one district officer was reduced and as such, the workload would reduce hence increasing efficiency. Training and developing skills by the managers will boost their morale and develop their career. This will give them confidence while delegating duties as they will be sure of what they will be doing. This will make the junior staff members to accord them the deserved respect. The company will also be comfortable for having knowledgeable staff. The training gives the employees a chance to learn other jobs. This puts them at an advantaged position to rise through promotions. This is good for employee development (Castillo 2010, p. 52). The company is also assured of continuity if such cases as death, resignations, transfers, and sickness would occur. The replacement becomes immediate, as one of employees would be called upon to take over the duties of the affected employee. Encouraging the company to diversify the products is very beneficial. The company would gain competitive advantage by investing in various products. This means the company will spread out its risks. This serves as a shock absorber if one sector of the industry is hit. The company could also diversify not just its products but also the markets for the same products. The company should hang onto the current clients and move forward to get new ones. This action will serve to market the company. C & C has a broad customer, it should focus on retaining the same base while advancing into areas that it has not. The company could do this by enhancing customer satisfaction. To fight of competition the management should use the two approaches of effective service delivery and customer satisfaction. It is easy to follow up on this, as the company will have taken a local mechanism with decentralized decision-making. The stores’ manager will be able to know the exact desires of customers. Chain stores do fail in this one area. Emphasis on employees having enough public relations skills is important as they portray the image of the company. Investment into the modern research and technology will be another key area that the management will have to look into. The company lost its prestige as the unrivalled chain store because it did not undertake research to help in outlining the changing dynamics both in the market and in technology. Improved channels of communication will reduce conflicts and as such, it would be very easy for the top management to communicate with the junior employees. Embracing advancement forms of communication will ease the process of making decisions, as information will easily flow from top to the bottom and vice versa. Better forms of communication will make conflict resolution mechanisms easier. Moving into the future the company could consider making the developed branches semi autonomous. This would reduce the workload on the remaining decisions at the headquarters. It would also create a feeling of ownership by customers in the respective areas the outlets are situated. Conclusion The long time success enjoyed by C & C Grocery stores took a downtrodden path more than a decade ago. This was attributed to very many factors among them the world economic recession, competition from companies that run large-scale retail business while offering big margins of discounts such as Wal- Mart, and the vastness of C & C Grocery stores that had spread wide from Canada to international levels. In spite of these hindrances, the biggest problem that affected the company was its organizational structure that could not the best way to improve the business to match the competition from rival firms. This was to be done using the resources and the chain of stores that the company had. This report has examined and evaluated the current organizational structure used by C & C Grocery stores and in the process pointed out the key areas that bring problems. The report analyses the important parts that managers of C & C Grocers must consider when making changes in order to see the problems within the company are finished. Incompetent layers of the structure have been identified in the process of assessment. Proposals on the new structure have been outlined with explanations on why the new structure would be a solution to the organizational structure problems ailing the company. The recommendations made at the tail end of the report if implemented will take the company back to its days of glory. It is worth noting that regular investment into research will help the firm to be in tandem with changes in the market considering it is highly competitive and dynamic. List of References Daft, R, 2009, Organizational theory and design, Cengage, New York. Beckman, T & Nolen, H, 2007, The problem of chain stores, McGraw-Hill, New York. Lusch, R, 2007, Marketing’s evolving identity, Public policy & marketing publishers, New York. Perkins, J, 1999, Organizational reform and retailing development, Service industries publishers, New York. Madison, J, 2002, Changing patterns of Urban retailing, Cengage, New York. Scroop, D, 2008, Local and national identities in the politics of consumption, History compass, New York. Wisconsin & Indiana, Univ, 2010, The Chain store system, Noble & Noble, Michigan. Henry, H, 2010 Executive chain store management, H.H Lestico pub, Minnesota. Henry, H, 2010, School of chain store management, H.H Lestico pub, Minnesota Castillo, C, 2003, A journey into the future, Liberty pub, New York. Read More