Organizational structure and functions at Target Corporation

Target Corporation

Target Organizational Structure

Target Corporation operates in three major market segments. It operates the U.S. Retail segment, the U.S. credit card segment, and the Canadian credit card segment. In the U.S. Retail segment, consumers can purchase items either online or by locating them in one of its stores. Target operates in the discount general merchandise retail segment. Its credit card segment offers a Target visa, Target card, and branded Target debit card. As of January 2012 Target had 1,763 stores in 49 states and in the Distinct of Columbia (Money .CNN.com, 2012). This research explores Target's Organizational Structure.

Organiuzational Functions

Target has many of the same organizational functions as other similar retail stores. Functions can be divided into eight general categories. These eight categories also consist of more specialized functions within the category. However, for the purposes of this study, it is only necessary to mention the general categories. The categories are store atmosphere, cash handling, loss prevention/safety and security, customer service, refunds and returns, visual merchandising, training, and inventoried and stock management.

Marketing

Like many discount retailers, Target relies on its value chain to allow it to continue to offer low prices. However, Target did not feature its low prices as part of its original marketing campaign. Instead, it chose to use marketing to achieve product differentiation over competitors such as Wal-Mart and Costco. Target was a discount store that intended to look like a more upscale store. It focused on promoting quality and price, rather than just price. However, in a 2008 study, it found that its customers did not perceive Target to have lower prices than Wal-Mart, but rather they perceived Target to have prices that were 20% higher than Wal- Mart.In reality, prices were lower than Wal-Mart on comparative items, but customers did not perceive it that way. Therefore, a new marketing campaign was developed that featured lower pricing (Reingold, 2008). However, this is inconsistent with store appearance.

Finance

Target achieves financing through proceeds from store operations and stock offerings to the general public. It uses proceeds to cover existing operational costs, and to provide capital for the financing of new stores and expansion projects. It also uses a portion of its finance proceeds to pay for marketing studies and research into new product lines that it should offer in the future. Cash flow has allowed Target to pay down much of its long-term debt (Datamonitor, 2012).

Human Resources Operations and how they determine Organizational Structure

In the past, human resources was thought of as a limb of the organization. Human resources made certain that the organization had sufficient employees to carry out their daily business. Recently, attitudes towards human resources have changed, and human resources is now considered an important part of the strategic management plan of the organization.

Human resources has an effect on whom to hire, pay and benefit structure, as well as making certain that personnel practices are aligned with the strategic goals of the organization. Human resources helps to define job roles in conjunction with management. Human resources must hire workers that are in alignment not only with the needs of the organization presently, but with a future strategy of the organization. They must hire workers that bring value to the organization and the job that they perform.

Human resources plays a significant role in helping the organization to achieve maximum competitive advantage through the people that they hire. Organizational structure has a significant impact on knowledge transfer and value creation within the organization (Mahesh & Suresh, 2009). Having the right policies and strategies in place allows them to achieve this goal. Human capabilities and core competencies dramatically affect organizational structure and future strategic planning (Wen-Chang, Chien-Hung, & Ying-Chien, 2011).

Organizational Design

Organizational design considers the arrangement of organizational structures and how they relate to one another. It is often difficult to determine the organizational design of a major corporation such as Target or Wal-Mart. However, the organizational chart appears to be organized according to function. Within that function is a geographic organization with managerial tasks broken down into regional, and store level activities. Therefore, Target could be considered a hybrid between function and geographic organizational design.