Organizational behaviorgroup assignmentsears holding and organizational structure

NATIONAL ECONOMICS UNIVERSITY -*** - ORGANIZATIONAL BEHAVIOR GROUP ASSIGNMENT SEARS HOLDING AND ORGANIZATIONAL STRUCTURE Class: NLQT1102E(122)CLC_03 Group 6: Vũ Thị Thanh Vân – 11219152 Nguyễn Diệu Linh - 11213226 Thái Khánh Huyền - 11219606 Nguyễn Thị Ngọc Minh - 11214435 Vũ Thị Thanh Phương - 11216465 Nguyễn Khánh Linh - 11213267 Lecturer: Assoc Prof Dr., Phạm Thị Bích Ngọc Ha Noi - 2022 TABLE OF CONTENTS ABSTRACT I/ INTRODUCTION .4 1/ About Sears Holdings Co 2/ About Edward S Lampert 3/ About the case II/ PROBLEMS .6 1/ What is the most important problem in this case? a) Organization Structure b) Organization Structure problem in this case .6 2/ What person factors are most relevant? a) Leadership .7 b) Leadership problems in this case 3/ What environmental characteristics are most important to consider? a) Economic factors b) Competitors .10 4/ Do you need to consider any processes? Which ones? 11 III/ CONCLUSION .12 1/ Crirical point 12 2/ Recommendations 12 a) Organizational Structure 12 b) Organizational Culture 14 c) Leadership 15 REFERENCES 16 This is a preview Do you want full access? Go Premium and unlock all 16 pages ABSTRACT For a long time, people haveAccess been getting to going shopping in retail stores to allused documents After COVID-19, even for businesses that sell online, physical retail presence is Get Unlimited Downloads still important to build trust with customers A lot of pure play online retailers realized this and started having a physical retail presence, even in the form of popImprove your grades up locations Many customers still want to touch and feel the product before they buy or try it on to make sure it fits Other customers prefer ordering it online and picking it at the store location on the way home Upload your documents to unlock role in connecting We cannot deny that retailerShare chains still play an important manufactures of goods to the end consumer One of the giant retailer chains in America we must mention is Sears Holdings Co It actually reshaped the nation, transformed the average citizen's lifestyle and even was known as a symbol of American capitalism Free Trial Get 30 days of free Premium However, once the biggest retailer in America, Sears Holdings Co went bankrupt after 132 years in business Besides financial problems and competition, organizational structure also plays an essential role in the failure of Sears Holdings Co Already Premium? Log in I/ INTRODUCTION 1/ About Sears Holdings Co Sears, Roebuck, and Company, also known as Sears, is a chain of department stores It was founded in 1982 by Richard Warren Sears and Alvah Custis Roebuck The company began its operations as a mail ordering catalog but soon opened retail stores in various locations around the United States of America Sears had several brands and products working with subsidiaries such as K-Mart and DieHard Moreover, it offered products for home appliances, clothing, and various other consumer goods The company was one of the largest co-operations in the United States that has built its way up to one of the leading firms in the industry However, in early 2019, Sears Holdings Co closed because of its bankruptcy 2/ About Edward S Lampert Edward Lampert is an American billionaire businessman He took over as CEO of struggling retail giant Sears Holdings in 2013 with hopes of a turnaround but failed miserably He is also founder of Transform Holdco LLC, and founder, chairman, and CEO of ESL Investments 3/ About the case Lampert, a hedge fund billionaire, acquired control of Kmart-emerging from bankruptcy-in 2003 through his hedge fund ESL Investments In 2005 Lampert used Kmart as a platform to acquire the financially troubled Sears, creating the Sears Holding Corporation Thanks to aggressive cost-cutting Sears Holdings thrived at first, and its stock price soared But by 2007, profits had declined 45 percent The stock, used to be $182, changed up and down and finally decreased to $30-40 In January 2013, Lampert directly took over the company Under Lampert's direction, Sears Holding has gone up and down but not retained any of its mild increases in valuation Lampert's problems relate in part to organization This is a preview Do you want full access? Go Premium and unlock all 16 pages II/ PROBLEMS 1/ What is the most important problem in documents this case? Access to all Organization structure is the most essential problem in this case Get Unlimited Downloads a) Organization Structure Improve your grades  Definition Organization Structue is the system of task, reporting, and authority relationships within which an organization does its work The purpose of the structure is to order and Upload cooordinate the actions of employees to achieve organizational goals Share your documents to unlock  Objectives - To link individuals in an established network of relationships Free Trial - To group together the tasks required to fufil the objectives of the organization Get 30 days of free Premium as a whole and to allocate them to suitable individuals or groups - To allocate to individuals or groups the authority they require to perform their functions Already Premium? Log in - To coordinate the objectives and activities of separated units - To enable the flow of work, information, and other resources via lines of cooperation and communication b) Organization Structure problem in this case Lambert decided to reorganize Sears Holding’s structure in 2008 It is considered Atomized structure:  Lampert ran Sears like a hedge fund portfolio, with dozens of autonomous businesses competing for his attention and money;  Sears Holdings was ravaged by infighting for fewer resources and no cooperation across divisions It is obvious that the structure Lambert built made hugely bad effects on the company's overall performance 2/ What person factors are most relevant? Leadership behavior and leadership style are the most relevant person factors in this case a) Leadership  Definition Leadership is the ability to influence a group toward the achievement of goals It is a property - the set of characteristics attributed to someone who is perceived to use influence successfully And leadership is also an influence - the ability to affect the perceptions, beliefs, attitudes, motivation, and/or behavior of others  Trait approaches to leadership  Attempts to identify stable and enduring character traits that differentiate effective leaders from non-leaders focusing on: o Identifying leadership traits; o Developing methods for measuring them; o Using the methods to select leaders  Current limited set of leadership traits: Emotional intelligence, drive, motivation; honesty and integrity, self-confidence, cognitive ability, knowledge of the business, charisma  Traits can predict leadership, but they are better at predicting leader emergence than effectiveness  Behavioral approaches of leadership  Specific behaviors differentiate leaders from non-leaders  Behavioral theories of leadership imply we can train people to be leaders  The leadership Grid  The Leadership Grid provides a means for evaluating leadership styles and then training managers to move toward an ideal style of behavior  It draws on both studies to assess leadership style: o “Concern for People” is Consideration and Employee-Orientation o “Concern for Production” is Initiating Structure and ProductionOrientation  Style is determined by position on the graph: b) Leadership problems in this case Lampert was dramatically criticized by his takeover at Sears Holdings  Leadership behavior This is a preview Do you want full access? Go Premium and unlock all 16 pages ● Lampert's approach to leadership contributes to the company's difficulties He believed “Selfishness begets effectiveness and rational business Access to all documents decision” This force divisions to compete with each other like in outside in the open market Get Unlimited Downloads ● Lampert often appeared to be ignoring the executive entirely, checking on Improve your grades email and not asking questions He peppered the employees with comments and questions and forced people to follow his point of view and did not care what they were doing  Leadership style Upload Share your documents to unlock ● Lampert had still run Sears like a hedge fund portfolio, influenced by his previous successes with ESL And Lampert was failing as his strategies did not fit the times Free Trial days of freeand Premium ● Lampert's rule scared Get the30employees caused a lot of infighting Therefore, his employees are dissatisfied In short, Lampert and the departmental heads followed a traditional type of authority Traditional Already authority Premium? was not the Log perfect in choice for Sears in the market, because the competition and innovation were increasing But this traditional authority posed a form of dominant power affecting the whole organizational strategies It resulted in lacks the capability to lead the company and follow legal standards 3/ What environmental characteristics are most important to consider? During the time that Lampert took over Sears as CEO, there were things that made Sears begin to stumble into a gradual downfall a) Economic factors  Income In the USA, the general population's declining in income levels, so consumers' purchasing power is declining too This has an impact on all businesses, including Sears  Inflation Inflation has a significant impact on Sears' business strategy since it lowers both the purchasing power of money and its ability to compete on price in global markets  Economic Recession Business growth slows down during a recession, which in turn results in decreased profits As a result, dividends decline and shares lose appeal, which ultimately results in a decline in profitability  Unemployment In 2007-2009, the US economy experienced rising unemployment, which lowered peoples' income levels People are reluctant to spend and try to save money more, which results in a poor allocation of resources in the economy Therefore, Sears strive to stock less in order to cut the cost of the inventory c) Competitors Sears’s competitors were primarily in the Department Stores industry and also in the Apparel & Accessories Retail, Auto Parts Retail, and Consumer Electronics Appliances Retail sectors 10 Major Sears’s competitors are J C Penney, Target, and Wal-Mart These competitive environments largely affected Sears’s business performance and its strategies 4/ Do you need to consider any processes? Which ones? We should consider the HR process: Compensation and benefits - especially about the incentives  Lambert did not make any incentives for employees to coordinate with each other in different departments and support the company overall performance  He incentivized the aggressive competition between departments as to bring the most profitable results to the department individually This led to unintentionally incentivizes dysfunctions at work and in coordination 11 This is a preview Do you want full access? Go Premium and unlock all 16 pages III/ CONCLUSION Access to all documents 1/ Crirical point Get Unlimited Downloads In conclusion, Lambert led the Sears Holding Corporation in a toxic culture and led the company like a Improve hedge fund yourportfolio grades The problems were about Organizational Structure, Organizational Culture, Leadership Behavior, and Style 2/ Recommendations a) Organizational StructureUpload Share your documents to unlock  Theories  Matrix Structure o The matrix organization attempts to maximize the strengths and Free Trial minimize the weaknesses of both the functional and product bases  Typically seenGet as 30 a balanced compromise days of free Premium between functional and product organization  Characterized by the existence of a dual authority system, which can cause conflicts Already Premium? Log in  Facilitates the utilization of highly specialized staff and equipment  The flexibility of this system allows speedy response to challenges o Matrix Designs  Combines two different designs to gain the benefits of each  A structure that creates dual lines of authority and combines functional and product departmentalization  Key Elements:  Gains the advantages of functional and departmentalization while avoiding their weaknesses 12 product  Facilitates coordination of complex and interdependent activities  Breaks down unity-of-command concept  Matrix structure is appropriate when:  External pressure exists for a dual focus  Pressure exists for a high information-processing capacity  Pressure exists for shared focus  Mix of the mechanistic and organic models o The mechanistic model is a structure characterized by extensive departmentalization, high formalization, a limited information network, and centralization 13 o The organic model is a structure that is flat, uses cross-hierachical and cross-functional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making  Recommnendations Build the Matrix Structure and the Mix of the mechanistic and organic models Departments will be connected together with the goal that is contributing to the organization, not for the department only By that, the departments need to work in harmony, and in sync, stop infight each other to compete for Lambert- the CEO’s investments There will also be a free flow of information, which helps each department know different information needed for their work and decision-making is flexible between being decentralized and centralized d) Organizational Culture  Theories: The Clan culture  Clan culture is an inward-focused characteristic of many small organizations and start-ups It nurtures company employees by emphasizing interpersonal interactions, communication, and collaboration It aspires to build one huge happy family in this way  Clan culture, which replaces traditional organizational hierarchies with a more horizontal structure, breaks down barriers and creates strong, closeknit teams Mentoring connections grow, people share their knowledge, and leaders freely seek input and suggestions from their subordinates It's also a model that accepts change, as evidenced by start-ups' adaptability 14 This is a preview Do you want full access? Go Premium and unlock all 16 pages  The clan model is one of happiness Employees who feel valued, supported, and respected are more willing to go above and above, which Access to all documents is excellent for both people and business  This form of organizational culture Downloads can be extremely effective at uniting Get Unlimited teams and inspiring loyalty in firms that rely on remote working or have Improve your grades a significant proportion of frontline workers, such as salespeople and other offsite staff  Recommnendations Suggest following TheUpload Clan culture, which helps to improve employee Share yourattached documents unlock affiliation They will be more andtocollaborate effectively The working environment is positive and supportive e) Leadership  Theories: Transformational Leader theory Free Trial 30 days of free  Idealized Influence: Get Provides vision andPremium sense of mission, instills pride, gains respect and trust  Inspirational Motivation: Communicates high expectations, uses symbols to focus efforts, expresses important purposes in simple ways Already Premium? Log in  Intellectual Stimulation: Promotes intelligence, rationality, and careful problem solving  Individualized Consideration: Gives personal attention, treats each employee individually, coaches, advises  Recommnendations We propose applying the Transformational Leader theory, Lambert needs to change his leadership style and behavior in a way that inspires and motivates followers The communication between him and the employees needs to be two-way, Lambert understands his followers and leads them to the right path 15 to the overall goal of the organization Then, he can fulfill follower autonomy, competence, and relatedness needs The employees may work productively, give respect and follow him REFERENCES 16