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LTC WEEK 6 PRESENTATION ON FACILITATING CHANGE
Transcript of LTC WEEK 6 PRESENTATION ON FACILITATING CHANGE
Broke $1 billion Sales
With 50 stores
2,252 Stores in
Strategies of the Leaders
Customer Centric Approach
Command and control-type management structure
military background, six-sigma strategy from GE
Centralized management approach
functional structure: he made all major decisions and monitored division activities.
eliminated and consolidated division executives
installed processes and streamlined operations
low morale , hate and discontent
decreased customer satisfaction
Decentralized management, use the Inverted Pyramid model
Customer centric approach, well-trained associates
Corporate Social Responsibility
Current Organization Structure
Inverted Pyramid Management Practice
Challenges of the Organizational Design
Fierce Competition - Lowes (primary), Ace Hardware & Dixieline (secondary), Walmart (Indirect), and IKEA in China
Unpredictable housing market
Challenging supply chain
Entering Chinese market
Training and development of associates
Retention of personnel
Summarize the existing structure of the company.
Describe the existing organizational design.
Discuss the challenges of the existing design.
Summarize the changes in strategy.
Recommend changes to current structure.
Explain how the recommendations will help the company to remain effective.
Home Depot: A lesson in leadership
increased organizational effectiveness
managing corporate-divisional relationship
Coordination problems b/w divisions
Strategic Summary for Organizational Change
Identify current values
and how these values affect the organizational behavior.
Assess the goals, norms, and rules which help transmit the values of the organizational culture to employees and identify areas of improvement.
Examine the methods to socialize new employees, assess the effectiveness of the socialization practices, and recommend ways to improve socialization.
Develop organizational ceremonies to help employees learn cultural values
Extend use of technology to improve operations
Sell products that are technologically advanced
- Power Tools
- Solar Energy
- Energy Efficient Appliances
High retail price and disappointing service
Chinese consumers never took to the company's ethos of do-it-yourself (DIY).
Most Chinese do not have garages.
More convenient and cheaper to outsource labor.
More competition in the niche offering lower and quality products.
2006 entered China with 12 stores.
2012 closed all big box stores, retained 2 specialty stores (paint/flooring)
CENTRALIZED vs. DECENTRALIZED?
Top managers coordinate organizational activities and keep the organization focused on its goals.
Centralization becomes a problem when top managers become overloaded and immersed in operational decision making about day-to-day that they have little time to spend on long-term strategic decision making.
allow lower-level managers to make on-the-spot decisions.
managers have the opportunity to assume greater responsibilities and take potentially successful risks.
allows managers to demonstrate personal skills and competences making them more motivated to perform for the organization.
planning and coordination may become difficult which may lead to losing control of the organization's decision-making process.
The design challenge for managers is to decide on the
correct balance between centralization and decentralization
The ideal solution is a
balance between centralization and decentralization of authority
so that middle and lower managers are allowed to make important decisions and top manager's primary responsibility becomes managing long-term strategic decision making.
result is a good balance between long-term strategy making and short-term flexibility
and innovation as lower-level managers respond quickly to problems and changes in the environment
Reasons for Failure
Learning Team "D"
January 12, 2015
Existing Organizational Design
Reevaluate China Strategy:
* The "do it yourself" mentality doesn't work
* Focus on home decor
* Provide market education
* Increase in-store support
* Various subcultures require product differentiation from store to store
* Excess inventory VS "just-in-time" to match unpredictable consumer needs
* Use IKEA as benchmark
* Expatriate manager