Cadwell, Christopher Organizational Analysis

May 6, 2012 MGMT 206: OBM Section #2

Organizational Analysis Select a business with which you are familiarperhaps you have worked there/are working there or are a frequent customer. You should notify me of your choice by April 10, 2012 via Sakai. No two students may analyze the same company, and it is first come, first served. If you do not supply an organization, I will assign one to you Imagine you are an organizational consultant hired to improve the organization. Youve been asked to look specifically at structure and culture. Answers to each part of the assignment should be well-developed with detailed examples and justification using course material. When you include a claim, be sure to justify it with evidence. Remember to personalize the header and use the correct file name format for your document (LastNameFirstName-OrgAnalysis). HINTS/SUGGESTIONS 1. You may number your answers; no need to write a formal paper. 2. If you have contacted the company and searched the library databases with no luck for some of the elements of Part I, discuss how the organization should organize based on their contextual factors. Be sure to justify your responses. 3. If you cannot find articles about your organization (particularly for smaller, independent organizations), you may include articles that discuss contextual factors. Try to find sources that discuss the industry as a whole or the local economy. 4. I strongly recommend you make an appointment to see me to go over a draft of your analysis. This assignment is worth 100 points. Part I: Structure Analyze the organizations structure by covering the following points: 1. Briefly describe the organization. Target Corporation, incorporated in 1902, is a retail chain that allows consumers to purchase products either online or by locating them in one of its stores. Targets slogan is to Expect More, Pay Less. This tells the consumer that they can expect the quality and value of their product to be better than what they expected but also be offered the lowest price compared to Targets competitors. Target operates as a general merchandising store, which offers an assortment of general merchandise plus a more limited assortment of food than traditional supermarkets. The food includes some perishables, dry, dairy, and frozen items. Target sells under its own exclusive brands. This includes private-label brands including up & up and Archer Farms. Targets

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products are: mens and womens shoes, clothing, and accessories; baby clothing, shoes, car seats, diapering, feeding, strollers, toys; boys and girls clothing, shoes, and accessories; home bath supplies, bedding, dcor, appliances, kitchen and dining supplies, and storage/organization; furniture and patio; electronics; health and beauty; books, movies, and music. Target prides itself on clean, spacious, and guest-friendly stores. 2. Identify the unit you will analyze (entire organization, division, department, etc.). I will be describing the entire organization. From the CEO to sales associates. 3. Describe the contextual variables facing your organization (size, technology, environment, strategy/goals). These DO NOT mean what you probably think at first; be sure to read the chapter. Size- Target currently operates in 1,765 stores in 49 states as well as an online business at Target.com. As of 2012, target has approximately 365,000 employees. Large corporations, such as Target, emphasize that formalization, specialization, and standardization all tend to be greater because they are necessary to control activities within the organization. Technology- Target uses many different forms of technology to reach either its day-to-day goals or its long-term goals. Since Target is such a large corporation, there is greater variation in technologies across units in the organization. Corporate headquarters may have an entirely different technology scheme than a standardized store half way across the country. Target.com creates an interface that any consumer can shop from. This kind of technology creates increased sales and allows consumers to be able to shop in the comfort of their own home. Human resources, modes of transportation, operations management, machines, materials, readily accessible information, and money/assets are all forms of technology that are necessary to make the products and services that the organization offers to Targets consumers. Environment-Being a company in the retail industry, there are environmental factors that could possibly influence the buying process. This means that Target has to be observant of certain economic, political, regulatory, competitive, and technical considerations. From an economic standpoint, Target may be susceptible to economic recession. Hard economic times could have a devastating effect on customers ability to buy and Targets ability to buy from suppliers. Due to the fact that Target provides a pharmacy, they may also need to consider regulatory policies set by Drug and Food Administration. Environmental threats can also influence the purchasing process of Target. If Wal-Mart has a better deal on televisions, Target will probably lose customers to Wal-Mart. Likewise, if WalMart has more attractive advertising, Target customers may be enticed to leave and become Wal-Mart customers. If Target relies heavily on a few suppliers, an environmental disaster could possibly wipe out operations for a particular product or list of products. To lower the risk

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of environmental influencers that may hinder the buying process, it is a good idea to diversify suppliers. Strategy and Goals- Targets mission is to offer their consumers anything that need while emphasizing and striving to save the consumer money. In order for Target to reach this goal, a specific organizational strategy has to be implemented in order to efficiently offer these benefits in every single store, department, or section throughout the country. There are four Senior Vice Presidents that control the Northwest, West, Southeast, and East regions of the United States. Each region has 6-8 Group VP or Director to manage a certain area of the region. Each Group is broken down into multiple regions each controlled by a specific District Team Leader. This process makes sure that each district is managed through highly qualified leaders to regularly maintain the companys message and objective.

4. Describe how your organization in terms of the design dimensions of formalization, centralization, specialization, standardization, complexity, and hierarchy of authority. From a structural perspective, every manager and organization look for the best combination of differentiation and integration for accomplishing the goals of the company. Formalization is the degree to which an organization has official rules, regulations, and procedures. Since Target is a Fortune 500 company, it is very formalized. For example, Target is pursuant to Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934 where they are required to have disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports filed with the SEC under the Exchange Act is recorded, processed, summarized and reported correctly within the time periods specified in the SECs rules and forms. An accountants role is very important since there are many details and time constraints to be considered. Not only are the report documents formalized but the procedure to making these reports is formalized further. The degree of formalization in this instance for Target is very high.

Centralization- This can be defined as the extent to which decision-making authority has been delegated to lower levels of an organization. An organization is centralized if the decisions are made at the top of the organization and decentralized if decisionmaking is pushed down to lower levels in the organization. If Target used a centralized
operation system, it would focus most of its efforts toward securing long-term relations with suppliers. On the other hand, if they operated with a decentralized system, they would direct their decisions toward short-term results. Depending on if Target wants to pursue long-term financing decisions or short-term profits without much change, the degree of centralization could be high or low. Standardization is the extent to which work activities are described and performed routinely in the same way. Since Target stores are all run, delegated, and standardized the same way, its

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degree of standardization is high. Target has the same rules, written policies and procedures, and job descriptions for every Target store operating in the United States. This level of standardization helps Target maintain the same quality and correct inventory of products no matter where a store is located. Specialization is the degree to which organizational tasks are subdivided into separate jobs. The degree of specialization is high in the corporate management structure. At the corporate level, some jobs are specialized and some are not. Some lower degrees of specialization positions including the CFO, Chief Acct. Officer, and Executive Vice President are all the duties of one individual, Tony Risch. Another non-specialized corporate job by one individual is Robert J. Ulrichs position. He is the Relationships Chairman, Chairman of Executive Committee, Chairman of Target Stores Division and CEO of Target Stores Division. All other corporate positions are specialized as one position per individual. These jobs include the CEO, President of Target Sourcing Service, President of Target.com, President of Target Financial Services plus many more positions. The complexity within the organization is also very high. Just within one store there are 5 levels of organization with much differentiation. The Store Team Leader(STL) controls everything in the store like a manager would. Under them, the ETls(Executive Team Leaders) control big sections of the store like food, Softlines(clothes), Hardlines(everything but food and clothes), HR, assets protection, and general exchanges. Team leaders control areas within the ETLs area. Under the Team Leaders are the specialists who are in charge of specific sections like electronics or shoes. Under the specialists are the Team Members or sales associates. Each position is necessary in order to carry out the operations of the store effectively and the give its consumers the best shopping experience. The number activities and the amount of differentiation of each position are very high. Target has 10 different levels of authority from CEO down to a Team Member. Each position has different tasks to be performed so its vertical differentiation is high and has a tall hierarchy of authority. Since Target is high in terms of all 6 design dimensions, it is highly bureaucratic.

5. Identify the means of coordination used within your unit. (Not in book see BB reading on Mintzbergs control mechanisms.) For in store purposes, Target mostly uses the Direct Supervision coordination mechanism. This is where one individual takes responsibility for coordinating the work of others by issuing order to them and monitoring progress. Every level within the store (STL, ETL, TL, specialists, and Team Members) has at least one individual who directly supervises them, making sure all in-store operations run smoothly and effectively. This tree hierarchy is mostly due to the fact that Target is suited for simple and predictable work.

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6. Assess your unit on the organic-mechanistic continuum. Be sure to relate to design elements. Target is a very mechanistic organization. Mechanistic organizations are rigid bureaucracies with narrowly defined tasks, strict rules, and top-down communication. By analyzing Targets organizational structure it seems as if a simple sales associate would have to go level by level in order to talk to an individual in the corporate ladder. In order for a corporation like Target to effectively carry out its operations, strict rules and narrowly defined tasks need to be implemented so that not one of Targets 1,765 stores fails to meet the needs of every consumer. 7. Provide a diagram of an organization chart with at least three levels for your chosen organizational unit. You should not use a chart downloaded from the internet you need to create your own. Describe the bases of departmentalization (simple, function, product or project, customer or client, geographical location, OR multiple bases) within your chosen unit. (If you are not familiar with how to create an organizational chart electronically, the easiest method is using PPT.) I will give this to you at the exam.

Target uses a function based departmentalization to carry out its operations. Each position has a certain function and clearly defines which position leads subordinate positions. 8. Assess the appropriateness of your organization's structureif appropriate, explain why; if not, suggest an alternative. Be sure to relate the structure to the contextual factors. Targets organizational structure is appropriate in terms of its contextual variables. Targets enormous national size mainly explains why its structure has so many vertical levels. Two to three levels is not enough to effectively operate that many stores over the thousands of square miles it occupies. Tons of preparation is needed in order to account for any environment variables affecting the organization. If revenues are down, Target needs an entire financial district in order to analyze how they are going to fix this issue. If a distribution center burns down, Target must revalue its assets and set insurance claims on damaged property. Finally, in order for Target to reach its mission for their consumer to be happy, be able to design their own lives, but also save money in the process, Target needs a hierarchy of leadership. Each employee is under the skin of their superiors, so everyone naturally meets the constraints of their job objectives in order for the company as a whole to meet its mission and objectives.

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May 6, 2012 MGMT 206: OBM Section #2

Part II: Culture 1. Identify and describe several artifacts of the business culture. You may want to consider the logo, uniforms, rituals, stories, ceremonies, office layout, etc. Feel free to paste images into the document, but adjust the page length accordingly. Not all of the artifacts should be from marketing communications! Hint: Check to see if your company is on Fortunes Top Companies to Work for list. Targets logo is a bulls-eye represents Targets image. The logo consists of two red rings, one outer and one inner. Studies indicate that 94% of Americans can recognize Targets logo. In its marketing, store design, product offering and its web site, Target uses the right tactics to keep its logo and brand message relevant and consistent. Along with Targets motto of Expect More, Pay Less the retailer has set high expectation and quality before lower pricing to attract customers. With a sense of higher quality and design, Target has set themselves ahead of their competitors. The Expect More really emphasizes the strategy to create a superior design scheme. Targets store design is focused on conveying a clean, youthful, and functional environment so customers walk away with a positive shopping experience.

2. Discuss what values and assumptions might be represented by the artifacts. Explain the connection you see between the values and the artifacts. Do you think there is a gap between the enacted and espoused values? Justify your answer.

Some of Targets company values include diversity, community giving, working as a team, and its mission to creating a great design and brand for the well-being of the shopper. Since 1946, Target has committed 5% of its income to support local communities. If they keep that going, Target is on track to reach a total of $1 billion in educated-related giving by the end of 2015. They also invest in the career development and well-being of its 355,000 employees, emphasizing how diversity will bring in different perspectives, talent, and commitment to enhance the company and the community. It seems as if Target really values their community and is committed to making it strong, healthy, and safe. The artifact of a clean and functional brand and design coincide with their values of enhancing the community. There is not much of a gap between enacted and espoused values. Targets website has an entire page explaining the importance of diversity and dedicates an anthem video to support its claims. I think employees really respect and adopt Targets values and enjoy working in a consumer-friendly environment.

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3. How does the leadership style of the owner/manager/CEO relate to the culture of the organization? What is the leader doing well? What should the leader do differently? Be sure to justify your answer.

The CEO of Target, Gregg Steinhafel, states that diversity is much more than a goal or campaign, but a core value that they integrate into every area of Targets business. From our suppliers, to our teams, to the shopping experience in our stores, we foster an inclusive culture that allows our high-performing and diverse team to drive innovation. Mr. Steinhafel thinks that by integrating diversity in all areas of Targets business, efforts toward creating the most benefits for the company, employees, and the community will increase dramatically.

4. Evaluate the extent to which the organizational structure and organizational culture are aligned or are in conflict (do they support each other or go against each other); describe how the organization can improve the alignment by changing either the culture or organizationbe sure to justify your approach. Gregg Steinhafel may strive to support highly diversified store atmospheres but the organizational structure of Target is too big for him to control every aspect of this value. Targets bigger projects like developing relationships with minority vendors and suppliers or strengthening the community through sponsorships and volunteerism are better suited to the demands of upper management. On the other hand, building a team with different backgrounds and unique points of view for the hundreds of different stores would be quite the challenge for each Group Vice President, District Team Leader, and Store Team Leader in every region of the country. In order for Target to successfully align itself with its core values, every one of its middle management positions also need to emphasize diversity as much as upper management do. By doing this, every store can be diversified as much as the website conveys. 5. To what extent does the culture and structure of the organization help it achieve its goals? Explain your response. By developing a strong diversified team of employees, Target believes that they can better understand how to exceed the expectations of everyone who visits the stores and on Target.com. Target also achieves its goals by investing in the success of small and large businesses across the country by buying from diversified suppliers. By Target developing a bureaucratic organizational structure, it can better accentuate goals by specializing in different functions. Higher management can strengthen communities to raise its public relations within the community at the same time gaining millions of sales through strict rules and regulations in each store mandated by lower management. Part III: Recommendations

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What are your recommendations for improvement? Remember, even if they are doing things very well, they can always do things better! Justify your responses. -Target Corporation is currently located only in the United States. They could greatly benefit by expanding globally into the Chinese and Indian retail markets. This could bring in many new consumers and new competition on a global level. -Although the consumer is left to expect more and pay less, they are not always informed of what exactly Target offers for them. The consumer knows that its a corporate retail store, but what kind of products does Target have that differentiate them from their competitors? Target also lacks in valuing customer service. The Expect More is emphasized more on the design of the stores rather than the relationship between the customer and the employee.

Sources: Brown Rachel. (2006). Target aims to please. Display and Design Ideas, 18(9), 40. Retrieved from http://web.ebscohost.com.ezproxy.ithaca.edu:2048/ehost/detail?sid=5546b343-39b0-4135a71aabadf1b3ece1@sessionmgr113&vid=1&hid=105&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29 wZT1zaXR

Target:company:diversity. (n.d.). Retrieved from http://sites.target.com/site/en/company/page.jsp?contentId=WCMP04-031762 Target:investors:annual report 2008. (n.d.) Retrieved from http://sites.target.com/site/en/company/page.jsp?contentId=WCMP04-037916 Target corporation. (n.d.). Retrieved from http://www.hoovers.com/company/Target_Corporation/rfccif-1.html www.target.com

Be prepared to share with the class some of the highlights of your report during Week 14. You should have at least three outside references. One may be the companys website (including promotional materials and annual reports) while two must be articles from reputable sources. Include a reference list in APA style. I also encourage you to use pictures, advertisements, and other artifacts for your assignment. You may also want to visit the organization for observation if there is a location in Ithaca.

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Organizational Analysis Grading Rubric Points Earned Mastery Part I: Structure (/51) 1. 3. Describe the total organization (size, mission, industry). Describe the contextual variables facing your organization (size, technology, environment, strategy/goals). Describe how your organization in terms of the design dimensions of formalization, centralization, specialization, standardization, complexity, and hierarchy of authority. 6 Size: Tech: Evn: Strat: Form: Cent: Spec: Stand: Comp: HoA: 3 3 3 3 2 2 2 2 2 2 5

Proficiency 5 2 2 2 2 1.5 1.5 1.5 1.5 1.5 1.5 3

Emerging 3 1 1 1 1 1 1 1 1 1 1 1

4.

Identify the means of coordination and control used within your unit. (Not in book see BB reading.) 6. Assess your unit on the organic-mechanistic continuum. 7. Provide an organizational chart 8. Assess the appropriateness of your organization's structureif appropriate, explain why; if not, suggest an alternative. Part II: Culture (/34) 1. Identify and describe several artifacts of the business culture. You may want to consider the logo, uniforms, office layout, etc. Feel free to paste images into the document, but adjust the page length accordingly. 2. Discuss what values and assumptions might be represented by the artifacts. Explain the connection you see between the values and the artifacts. Do you think there is a gap between the enacted and espoused values? Justify your answer. 3. Relate leadership to culture of the organization. 4. Evaluate the extent to which the organizational structure and organizational culture are aligned or are in conflict (do they support each other or go against each other); describe how the organization can improve the alignment by changing either the culture or organizationbe sure to justify your approach. 5. To what extent does the culture/structure of the organization help it achieve its goals? Explain your response. Part III: Analysis and Recommendations (/15) What are your recommendations for improvement? Remember, even if they are doing things very well, they can always do things better! Justify your responses. References /100

5.

5 4 6

3-4 3 5

1-2 1 3

10

6 5

3 3

1 1

10