Sears organization's style systems and structural integration

Sears Organization & Systems

Sears Organization

The organizational structure of a company reveals a substantial amount of information about its strategy, change attitude, and the environmental and competitive landscape. A company's organizational design should correspond to their core competencies and strategic orientation. Sears is a company focused on stability and prosperity and is an organization that is prepared to embrace change.

Organizational Style

Overholt (2003) developed a framework for analyzing the organizational subsystems of an organization. The subsystems delineated by Overholt (2003) include: Genetic core, philosophy, formal organization, and information, technology work & processes. An organizations genetic core is its source of individual or team-based decision-making. Its philosophy is the level of contingent or pre-set rules that are used in the organization. When analyzing formal organization, the hierarchical levels, degree of control, and the reward systems are of interest. Information, technology, and work processes is fairly self-explanatory, including the decisions about technology, the degree of information sharing, and the direction of work process flow, whether bottom-up or top-down. This type of organizational archetype is useful for identifying the levels of decentralization or centralization that is present in a company's structure and systems.

Sears genetic core has its foundations in the former Sears Roebuck, a company that had a long-term, intimate relationship with its American consumers ("Sears Holdings," 2007). Sears is rooted in traditions and formality -- the company's pride in its brand and products largely determines its actions ("Marketline," 2007, p. 17).

Key Systems

Sears employs a Sears University system for educating and training employees about the Sears culture and systems, best practices, business leadership, and business knowledge. The system uses aggressive tools like town hall meetings and the Learning Maps® that are used to teach employees about their impact on key performance and profitability ("Organizational Change," 1997).

Structure, Strategy, & Systems

Early management at Sears was characterized by something unheard of in corporate organizational structures: Democracy (Kanter, 2007). "We have deliberately tried to treat you as free, independent merchants and men (Kanter, 2007). We have endeavored in a chain-store system to have a cooperative democracy," Robert Wood, who as CEO in 1949, told his managers (Kanter, 2007). The men in charge of Sears considered the threats to a democratic society to be the same threats to a business enterprise: Centralization of authority, an excessive growth of authority, growing dependence on formal systems, bureaucracy, and technical or mechanized solutions to human problem" (Kanter, 2003, p. 165) Sears wasn't having any of it.

Privacy, Transparency, & Reliability

By the 1970s, oil prices had surged in the U.S., and Sears experienced market saturation (Kanter, 2007). Growth was half of projections, Sears stock plummeted, and layoff happened for the first time in Sears' history (Kanter, 2007). The organization had become flat, tensions between the selling employees and the buying employees were enormous and growing, and Sears came under public scrutiny for discriminatory hiring practices and bait-&-switch marketing (Kanter, 2007). Wood understood one thing -- the company governors had been taught to grow but they had not been taught to change (Kanter, 2007). Wood couldn't see deeply into his organization as it was layers, upon layers of special good-ol'-boy arrangements (Kanter, 2007).

Improving Organizational Performance

In the early days at Sears, performance measures meant only one thing -- profits. But over the decades, as Sears came near the brink of collapse and then used diversification (Discover Card, Allstate insurance, K-Mart) to bootstrap itself back to solid ground, it was no longer okay for managers and directors to be freewheeling maverick agents (Kanter, 2007). Sears adopted the employee measures that had become expected and common in the day.