Apex Furnishers: Organizational Development

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Introduction

• Apex furnishers in one of the leading retailer of furniture and furniture related products in the world.
• The company was started off by John Keane in 1962 as a solo venture in Atlanta, Georgia.
• During its early years, it concentrated on furniture assembly and repair.
• Later on it embarked on the selling and distribution of furniture, a venture that led to the growth and development of the company up to date.

John Keane started off the company on 1st March 1962. He used his mother backyard as the workshop of his small business. With increased request for orders and the desire to expand, Keane transformed the business from a repair shop to a local furniture manufacturing workshop.

• From its humble beginnings in Atlanta, Georgia, the Apex Furniture is now found in over 20 countries, mainly in America, Europe and Asia.
• It has 196 stores world wide with a workforce of approximately 97,200 individuals.
• The company has prospects of opening additional stores in Africa, South East Asia and China.
• This is due to the presence of emerging markets in these regions.

The founder of Apex Furnishers, John Keane had the dream that his company will have stores located all over the globe. Due to this fact, the management of the company has always strived to expand its activities into new markets. To achieve this, several market entry strategies have been used. In some situations, these strategies have been fruitful while in others, they have failed.

• The company is quite stable.
• In 2011, it recorded a net profit of $4.6 billion.
• On that year, its total sales amounted to $31.6 billion.
• Having entered the stock market in the early 1980s, Keane does not have full control over the company. However, he is the majority shareholder.

The company required a solid financial backup in order to expand into new markets. During the early days, Keane was against the idea of entering Apex Furnishers into the stock market. However, due to stiff competition and strict regulations from the state and financial institutions with regards to provision of loans, the company had no option but to join the stock market in 1983.

Since then, the company has been recording desirable profits. However, the global economic crisis that has been experienced since 2008 has had tremendous impacts on the its profits. With proper planning, the company has however managed to be profitable.

Historical Data

• The organization and management practices that are practices at Apex Furnishers are highly influenced by the founder of the company, John Keane.
• The company is mission driven. Its main aim is to provide its customers with state of the art furniture. This is furniture that is of a great design, high quality but affordable to all individuals.
• To ensure that the goals and objectives of the organization are achieved in the short run and in the long run, the founder ensured that all the employees at the firm adopt the cause of the organization.
• Organization structure and culture are essential aspects that ensure the effectiveness and efficiency of an organization and its sustainability in the short run and in the long run (Ritter, 2000).
• Apex Furnishers has implemented a decentralized organization structure. However, the views and needs of low level employees have always been neglected.
• This has resulted in labor conflicts between the management and its employees.

Over the last three years, the employees of Apex Furnishers have gone on strike on four different occasions. They have demanded for better pay, conducive working condition, union representation and the adoption and implementation of IT in their operations in order to reduce their physical burden.

• The recurring feud between the employees and management has resulted in a decline in the services and output of the organization.
• Since most of the goods available in their stores are not manufactured in-house, the quality of products has remained the same.
• However, the quality of services within the organization has declined.
• This factor also played a critical in reducing the overall profits of the company within the last few years

Due to the conflict between the management and employees, the services offered at Apex Furnishers shops has declined. This is due to the dissatisfaction that these employees get. This has in turn reduced their motivation and performance (Sobel, 2005)

Structure Data

• The management strategy at IKEA has been and still is:
  1. Formal
  2. Nonhierarchical
  3. Based on team work (Biddle at al, 2003)
• All the employees at the company have respect for one another.
• There are is no special perks for managers.
• Titles and privileges within the organization are a taboo.

Employees at all level of the organization have respect for one another. It is due to this fact that they even refer to each other by their first names and not sir names. Titles like ‘sir’ or ‘boss’ are not used at all.

• The company highly values creativity from its employees.
• It focuses on recruiting young individuals and training them within the system rather then employing highly qualified personnel.
• Employees are motivated by the passion for the work and the conducive working environment rather than high salaries and benefits.
• Employees are entitled to a 30 day leave annually and 14 day sick leave.
• Additionally, employees are given entertainment and holiday allowances.

During the times that employees are on leave, they still receive their normal salaries. Additionally, they also get leave pay.

• The employees work together as a team and maintain close ties with one another.
• Due to this fact, they have been able to come up with strategies and ideas of improving their products and services.
• In 2003, the company joined the stock market.
• The company has thus been facing the pressures of profit realization from stakeholders.
• This has resulted in its vigorous expansion activities.

The fact that employees work together as a team has increased the bond between them. This is essential in determining the production rate of the organization (Sobel, 2005).

Since the company joined the stock market in 2003, it has expanded rapidly into new markets. This is due to the availability of financial resources.

Organization Functioning

• Apex Furnishers has always strived to be the leading furniture retailer in the world.
• To achieve this, the company has always been alert on internal and external factors that may affect its operations.
• It has focused on its strengths, improved on its weaknesses, maximized on its opportunities and has implemented strategies to eliminate its threats.

For a company to be sustainable in the short run and in the long run, it needs to be alert on all factors that may affect its operations. It is due to this fact that companies must conduct a SWOT analysis (Ritter, 2000). For Apex Furnishers, the results of the analysis have always revealed that it stands on a competitive advantage over its rivals. This is a good indicator of success in the short run and in the long run.

• With the help of its decentralized organization structure, communication and passing of information within the organization flows within all levels of the organization.
• The company also gives its employees the opportunity to further their knowledge through seminars and workshops.
• Scholarships are also provided.
• Knowledge and information is essential as it will result to the organization being able to understand the market effectively and meet the needs and demands of consumers.

Information is essential as it gives the management the opportunity to analyze the performance of the firm. This is achieved through internal and external analysis. it is also essential for the staff to have up to date information with regards to the market status and trends. This gives them the chance to provide better services to customers.

• Through its strategies, Apex Furnishers has always enjoyed a greater market share.
• The main strategy that Apex Furnishers has is the identification of its target market.
• The company has always been targeting middle class individuals who are in the 20s and 30s.
• The configuration of Apex Furnishers stores also ensure that customers spend as much time as possible and make a lot of purchases while there

Through its strategies, the actions of Apex Furnishers has led to the success that the company is currently enjoying.

• The stores are located outside town to avoid congestion, have multiple products in a single section, have a day care center to carter for the customer`s children, ample parking and a restaurant.
• The products at Apex Furnishers are readily available unlike other companies where a customer has to wait for several weeks for the arrival of their products.
• For convenience, Apex Furnishers has a home delivery service.

Location is also an important aspect in marketing.

Attitudes and Relationships

• Apex Furnishers has an organization culture that is based on consumer satisfaction.
• Each employee at every level has a specific role to play.
• Employees thus perform the roles and duties with the aim of satisfying consumer needs.
• To achieve this goal, the organization has an attitude that fosters team work.

The attitude that an organization has with regards to task agents is essential in the determination of the status of its operations. In the quest of satisfying its consumers, Apex Furnishers has adopted a team work approach. This has ensured that the operations within the organization are run effectively and efficiently.

• The company has also being against merges and acquisitions.
• The management of the company believe that the company can grow, expand into new markets and flourish on its own.
• With its consistency with profitability, the shareholders of Apex Furnishers have backed up the decision of their managers.

In the course of operating an organization, mergers and acquisitions are at times helpful in assisting a company succeed in the market. Despite this information, the management of Apex Furnishers have faith on their corporation. Due to its strong brand name and brand loyalty, the organization has managed to maintain its customers during the tough economic times that we are currently experiencing and still be profitable.

Analysis

• Despite the fact that the company has labor issues, its operations are still effective and efficient.
• The profits that were reported by the company in 2011 were the highest in the furniture industry and one of the highest to be reported by a company in the world.
• The company has also been exhibiting favorable financial trends over the last 10 years. This is an indication of stability and a good base to project the future sustainability of the company.
• The company also holds a large market share.
• Its target market comprises of enthusiastic individuals with a strong purchasing power and unique taste and preference.
• The buying power of Apex Furniture target group is characterized by brand sensitivity and identity, high volume purchases and price sensitivity. To meet their needs, Apex Furniture has a variety of products that are of high quality and pocket friendly.
• The substitutes of Apex Furniture products are either of a lower quality or are highly priced. This gives the company an upper hand of winning, maintaining and attracting new customers

The fact that Apex Furnishers has high quality products and a favorable pricing mechanism, it has been virtually impossible for rival companies to come up with substitute products of a similar or superior quality. This has enable Apex Furnishers to command a large market share in the furniture industry.

Conclusion

• From humble beginnings, Apex Furnishers has grown to become the leading furniture retailer in the world.
• Apex Furnishers therefore needs to conduct a market survey to determine the needs and requirements of its customers.
• The company also needs to embrace and apply technology, in its operations; from management to manufacturing.
• This will guarantee the sustainability of the company in the long run.

References

Ritter, L.S. (2000). Principles of Money, Banking, and Financial Markets. Addison-Wesley, Menlo Park

Sobel, J. (2005). A Theory of Credibility. Review of Economic Studies, 52 (6), 557-73.

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