Category: Organizational Structure

Excellence Theory

When looking at the growth avenues for the Al Habtoor Group, one should take into consideration models that can help it overcome challenges identified. Excellence theory was developed in 1985 by James Grunig following a study that was funded by the International Association of Business Communication. The theory holds that public relations help organizations to become more effective. In the competitive business environment, companies are struggling to come up with ways of offering superior products are the lowest cost possible. They are keen on ensuring that they can offer top quality products are the competitive price in the market. That is why the concept of excellence has become critical in most of these organizations. However, excellence is a product of so many factors.

One of the most important factors is public relations as explained in the Excellence Theory. A firm should be capable of engaging the public regularly to popularize the brand and develop a close relationship with the customers. Constant engagement with the public creates trust. When such a firm is hit by a crisis, it becomes easy to explain and convince the public because the trust had already been created. On the other hand, when public relations become important only when there is a crisis, it may not be easy to pass message effectively to the public. Grunig says that successful organizations have developed fully independent public relations department instead of having it as a unit in the marketing department. The role of such a department is not just limited to engaging members of the public. It should also be used to engage employees on internal issues relating to their performance, progress of the company, major plans ahead, and many other relevant pieces of information.

Matrix Organizational Structure

According to Burford, different companies choose different management structure based on organizational culture and practices. Some organizations prefer strict and formal hierarchical structure where information flows from the top leadership to the bottom. Others prefer a system where top leaders can easily interact with junior officers in what most organizations call the open-door policy. Other organizations use a blend of the two extremes. In the United Arab Emirates, the formal hierarchical structure has always been common, but as the market is increasingly exposed to the global forces, other models are becoming acceptable. The matrix organizational structure is one such model that is increasingly becoming popular. The fig. 1 below shows how matrix organization system is structured.

As shown in the figure above, a matrix organization structure focuses on pooling together people who have similar skills. In most of the cases, the structure is adopted when undertaking a specific project. The matrix structure can be used in different divisions of a firm under three different classes. Under the product structure, employees are pooled together based on the type of goods produced. As shown in the figure above, if a company is producing three products (A, B, and C), then employees will be pooled in the three different categories based on their skills and experience. Under this structure, employees can report to more than one manager depending on the circumstances prevailing at a given time. However, in each division, there will be a line manager or a project manager who is in charge of all other employees working in that group.

Under the market structure, employees with similar skills are grouped based on the markets in which a firm operates. For a firm like Al Habtoor Group that operates in various markets such as automobile sector, real estate sector, insurance, education, hospitality, and publishing, employees will be pooled based on their skills in these different markets. Experts in the automobile market will form a team while those specialized in the real estate sector will work as another unit. The goal of this form of division is to ensure that people with similar skills are allowed to work as a unit to enable them helps one another while at work.

The matrix organizational structure also allows for geographic classification. The Al Habtoor Group operates in various countries outside the United Arab Emirates. It hospitality segment has specifically been very successful over the recent past. Under the geographic structure, the firm brings together employees to work in a given location based on their ability to be physically present in these places. In each region, such as in the United Kingdom, a manager is assigned to oversee all the operational activities. All the employees within that region are answerable to the manager who, in turn, is answerable to the head of that department at the company’s headquarters in Dubai.

Reference List

Burford, D., Project Management for Flat Organizations: Cost Effective Steps to Achieving Successful Results, Ft. Lauderdale, FL, Ross Pub, 2013.

Child, J., Organization: Contemporary Principles and Practice, Hoboken, NJ, John Wiley & Sons Inc, 2015.

Griffin, R., and Moorhead, G., Organizational Behavior: Managing People and Organizations, London, UK, South-Western Cengage Learning, 2014.

Grunig, J., Excellence in Public Relations and Communication Management, New York, NY, Taylor & Francis Group, 2013.

Hoffmann, A., Co-Operative Workplace Dispute Resolution: Organizational Structure, Ownership, and Ideology, London, UK, Gower Pub, 2012.

Kortmann, S., The Relationship between Organizational Structure and Organizational Ambidexterity: A Comparison Between Manufacturing and Service Firms, Wiesbaden, German, Springer Gabler, 2012.

Wrench, J., Workplace Communication for the 21st Century: Tools and Strategies That Impact the Bottom Line, Santa Barbara, CA, Praeger, 2013.

Introduction

Gitman and McDaniel (2008) argue that the success of an organization depends hugely on the organization structure adopted by a company. This is because the organization structure helps in aligning an organization towards the achievement of its set goals and objectives. Also, it determines how well employee’s activities are managed by setting up the rules that guide how an organization is run. Mechanistic and organic organization structures are some of the most common organizational structures adopted by many companies throughout the world. Gitman and McDaniel (2008) note that these two organizational structures differ significantly in terms of design features and characteristics. This paper will compare and contrast the design features and attributes of mechanistic and organic organizational structures. It will also highlight the environmental circumstances that favor one of these organizational structures over the other.

Body

To begin with, a mechanistic or bureaucratic organizational structure is an organizational structure where everything is centralized. In this regard, the authority in a mechanistic organization structure flows from the top in a well-defined hierarchy (Daft and Murphy, 2010). This implies that top-level managers make most decisions in a mechanistic structure. As such, the decisions of top-level managers are supposed to be followed to the later by subordinates without questioning their grounds (Harris and Hartman, 2001). Also, communication in a mechanistic structure is done vertically. This implies that all communications in such an organization are done by top-level managers and communicated vertically to the subordinates. Some of the typical organizations that operate on mechanistic structures include universities, healthcare institutions, and governmental organizations, just to name but a few (Harris, and Hartman, 2001). Organic organizational structure, on the other hand, is highly decentralized (Harris, and Hartman, 2001). As a result, unlike in mechanic structures where all decisions are centralized, decision-making in organic structures can be delegated to subordinates and even employees of an organization. Therefore, decision-making also integrates the opinions of the subordinates. Also, unlike in mechanistic structures where communication is vertical, communication in the organic structure is done laterally (Harris and Hartman, 2001). This implies that communication needs not to come from the top, rather even from subordinates of an organization.

The two structures also differ in the way tasks are assigned to employees. In this regard, a mechanistic structure entails a high level of individual specialization in which each employee has designated a job according to their areas of specialization. Most tasks assigned in a mechanistic structure are relatively trouble-free (Daft and Murphy, 2010). In this regard, a bureaucratic organizational structure is viewed as a network of tasks and not people, as is the case in an organic organizational structure. Also, Daft and Murphy (2010) note that integration between departments and functional areas in a mechanistic structure is relatively low. This usually develops a situation where most functional areas are autonomous of each other (Daft and Murphy, 2010).

Organic structures, on the other hand, emphasize more on horizontal specialization. This implies a joint specialization in organic structures where employees work and coordinate tasks together. Since organic organizations are a network of people, individuals work in different capacities, alternately, and overtime. In addition, Gitman and McDaniel (2008) reveal that here departments and functional areas are highly integrated. This is because the environment in such an organization is uncertain, which calls for dependency between different functional areas (Daft and Murphy, 2010).

Mechanistic organizational structures also involve high standardization and formalization of tasks. This is because a job on a mechanistic structure is relatively stable, calling for formalization and standardization of tasks to ensure that there is the smooth operation of the organization without interference (Gitman and McDaniel, 2008). Organic structures, on the other hand, involves little formalization and standardization of tasks. This is because functions here keep changing, making it impractical setting up standardized and formalized tasks (Gitman and McDaniel, 2008). As a result, functions in an organic organizational structure usually are adjusted to ensure that all tasks are balanced with each other.

The two organizations also differ in the manner communication is relayed in the organization. In this case, apart from the fact that communication is vertical in a mechanistic organization, it is also much formal and relayed in written form. This is contrary to organic structures, where apart from the fact that communication is done laterally in the organization, much of it is relayed verbally (Daft and Murphy, 2010).

Environmental circumstances that suit organic and mechanistic structures

The finding shows that the two organizational structures work perfectly in different environments. In this regard, the report indicates that a mechanistic organizational structure suits organizations that function in stable and specific environments (Gitman and McDaniel, 2008). Organic organizational structure, on the other hand, works best in an environment full of uncertainties and dynamism (Daft and Murphy, 2010). In this regard, it becomes apparent that the two organizational structures operate effectively in two distinct environments. This implies that since the mechanistic structure only works best in specific and stable environments, it cannot work in an environment full of uncertainties and dynamism, as is the case with organic structures.

References

Daft, D. R. L., & Murphy, J. (2010). Organizational theory and design. Manson, OH: Cengage Learning EMEA.

Gitman, L.J., & McDaniel, C.D. (2008). The future of business: the essentials. New York, NY: Cengage Learning.

Harris, O.J., & Hartman, S.J. (2001). Organizational behavior. Binghamton, NY: Routledge.

Structuring an organization is a crucial part of establishing the company’s management style. Departmentalization is part of the business organization that “divides the company into separate divisions” (Nickels et al., 2022, p. 199). There are different ways of departmentalization: geographic, product, function, customer group, by process (Nickels et al., 2022). By examining a company’s size, values, product, markets, and customers, one can understand how and why a particular type of departmentalization has developed in a company.

PepsiCo is a large company that uses several division methods into departments. First, PepsiCo includes more than a thousand different drinks and food brands, which means division by product. Secondly, this company has various branches around the world and holds meetings with key investors in many countries, so PepsiCo uses geographical departmentalization. Thirdly, we can assume a division by customer group because the company cooperates with people directly and with various large retailers, manufacturers, and other institutions.

Walt Disney is a big company, but it makes media products, unlike PepsiCo. Cinematic content production requires more creative freedom for directors responsible for the content creation, targeting various consumer groups. There is a clear division by function, as a considerable part of the company is focused on the entertainment industry, managing Disney parks, and creating merchandise. Furthermore, Walt Disney has a geographical division for some countries in Asia and Europe.

The United Methodist Church has a flatter and broader organization as it relies on expansion through its disciples. It has three main governing bodies – the General Conference, the Council of Bishops, and the Judicial Council. This kind of departmentalization can be characterized as division by function because each institute has its purpose. In addition, there is a geographical departmentalization, as the church has over 12 million followers worldwide.

The organization’s structure and departmentalization depend on its size, corporate ethics and values, and market demands. Currently, different companies use more flexible options for organizing work. If they need more freedom and creativity, broader and flatter organization systems are used. For already established massive brands, departmentalization is geographical and product-based because, for them, it is essential to produce familiar commodities in large volumes.

Reference

Nickels, W. G., McHugh, J. M., McHugh, S. M. (2022). Understanding Business. 12th Edition. McGraw-Hill Education.

Organizational structure refers to a way in which an organization or a company arranges its employees and duties. It establishes hierarchy and line of authority. An organization should adopt a structure that is in agreement with its objectives and goals.

Matrix organizational structure employs a multi-dimensional approach (Amaral and Uzzi, 2007). It combines one or two of the other organizational structures. For example, it may combine bureaucratic organizational structure with functional organizational structure. This creates a dual reporting system in which people work together as a team while retaining a recognizable reporting system.

Matrix structure creates teams of workers in an organization based on both the product and department or function. This enables the organization to maximize on the strengths of each employee while making up for their weaknesses.

The teams work independently towards achieving a common goal. If a company produces two products for example, the practice is to departmentalize the production process of each product. All departments of each team would then work together to produce a high quality product (Braha and Bar-Yam, 2007).

Managers have in the recent past restructured their organizations to accommodate matrix organizational structure. It is suited for large multinational organizations with several products and distribution channels. The operations in each country or market segment are consolidated into business units.

Each unit has a manager who reports to the headquarters. Each of these managers acts with equal authority. The unit managers may in some instances report to the vice president who in turn reports to the president or the chief executive officer. Teams collaborate in formulating joint goals in order to project a one-company image.

Matrix organizational structure has been subdivided into three sub-groups.

Weak/Functional Matrix: this structure is found in large companies that use centralized structure as well. In this case, a project manager is given limited authority. The project manager often oversees certain aspects of the project but cannot make major decisions affecting the project.

The functional managers exercise control over their units. The project managers make decisions in consultation with the functional managers. The traditional hierarchy is maintained. Each individual has a superior to whom he is answerable. Therefore, there is a clear command system. Each superior gives orders to the subordinates and leaves room for the subordinates to make some decisions.

Balanced/Functional Matrix: a project manager is directly in charge of the project. However, there is power sharing between the managers of any given project. This approach combines the strengths of functional and departmentalized organizations.

Balanced matrix is challenging to operate because it requires delicate power sharing skills. If this is not done correctly, managers may clash over some duties and responsibilities (Grey & Garsten, 2001). This system requires close monitoring by the company’s chief executive officer or the president.

Strong/Project Matrix: a project manager is in control of the project. Project managers are answerable to the functional managers. Functional managers provide the technical know-how required for the project to run its complete course.

Project managers are able to save time that would have been wasted in tasks like negotiating with the functional managers. Saved time is then used to improve the quality and quantity of production.

Benefits of matrix organizational structure

Matrix organizational structure can benefit organizations in a number of ways. Some benefits are felt in the short term while others are long term benefits. These benefits include:

Reduced costs: staff in different departments work together towards a common goal. This saves time and reduces the cost of running business. Collective effort ensures that less money is spent on outsourcing some company activities. The total project cost is minimized since some employees with particular skills can be shared by several teams. Output and time are also well balanced.

Minimal conflicts: fewer conflicts arise since various departments work together for a common goal. Additionally, because all teams work together there is a sense of shared responsibility. Each member of the team is expected to work with the group to achieve the common goal.

The team works together to ensure success. Shared responsibility and authority means that the stress of responsibility is equally distributed. No individual member has to bear the weight of responsibility alone.

Use of specialized staff: this structure encourages the use of highly specialized employees. The highly specialized staff is shared among various departments. The staff is allowed to work in more than one department. This encourages flow of ideas from one department to another.

International identity: matrix organizational structure may help companies and organizations get an international identity. This structure is suited for a company that intends to expand its operations to geographically diverse areas.

This approach enhances the visibility of the company in new markets. The structure ensures that there is proper flow of information in the organization. It makes management easier since each unit operates as a semi-autonomous business. This model combines geographical areas with unique product functions.

Some corporations that have adopted this structure successfully include: Toyota, star bucks, Xerox, Chrysler, Proctor & Gamble, and Cisco.

Criticism of the structure

Matrix organizational structure has some inherent weaknesses. While these weaknesses are not major, they are still of particular importance to managers. Some of the weaknesses are immediately visible after the adoption of this system while others take some time to manifest. The following are the most common weaknesses associated with this structure:

It slows progress: introduction of this structure can significantly slow the progress of a company especially when implemented without putting into account the objectives and the goal of the organization. It tends to reduce the organizational clarity present in the bureaucratic structure. Every company needs leadership in order to be successful.

Since power is shared equally, allocation of responsibilities may be affected negatively. The structure is highly complex and this may lead to less clear decision making lines in an organization. In such a complex program, it is difficult to isolate those who are responsible for successes from those who are responsible for failures.

Fear of making mistakes: since responsibility is disbursed equally, some managers may fear to make mistakes (Jacobides, 2007). This often happens in the initial stages of restructuring. This may affect the overall results of the organization negatively. The decision making process is slowed. For an organization to be successful, top managers must be prepared to make decisions.

Power struggles: the product managers and the functional managers may get drawn into power struggles. Such power struggles have the potential to hold back the organizational functioning. The top management must be ready to arbitrate in such conflicts. The top management should put in place clear communication protocols.

Some organizations that had difficulty implementing this organizational structure include: Asea and Brown Boveri (ABB) and Unilever Company Limited. Unilever has been trying different organizational structures after matrix structure almost led to its collapse. Asea and Brown Boveri Company was among the first organizations to adopt matrix structure.

Flexibility of the structure

This structure is more flexible than the traditional structures like functional organizational structure. The decisions made at any level are upheld until better decisions are made by the top management. Its flexibility is best demonstrated by multinational corporations (Kogut, Urso, and Walker, 2007). In these organizations, the country manager assumes full control of the corporations’ operation in a country.

The unit is operated independently and decisions, innovations and products are made with the host country in mind. That is to say products are combined with geographical groups. The top management at the headquarters does not interfere much with these units. However, this structure leaves little room for change of plan later on in the course of a project. The plan of action remains the same even when the managers change.

Matrix organization structure is also designed to allow movement of individuals without interfering with overall productivity. Functional managers can change teams any time. This is possible because teams collaborate to realize a common goal.

Matrix organizational structure will continue to evolve in the future. Its complexity may reduce in the future as more and more organizations adopt it. Its main strength is cost reduction. Teams work together as a whole and are able to reduce costs.

It is currently used by large organizations like multinational corporations that operate in many countries. When it is not implemented correctly, it has a tendency to draw attention away from the customer. It may encourage self preoccupation. Customer needs and wishes may be ignored.

References

Amaral, L.A.N., and Uzzi, B. (2007). Complex Systems—A New Paradigm for the Integrative Study of Management, Physical, and Technological Systems. Management Science, 53 (7): 1033–1035.

Braha, D., and Bar-Yam, Y. (2007). The Statistical Mechanics of Complex Product Development: Empirical and Analytical Results. Management Science, 53 (7): 1127–1145.

Grey C., & Garsten, C. (2001). Trust, Control and Post-Bureaucracy. Philadelphia: Sage Publishing.

Jacobides., M. G. (2007). The inherent limits of organizational structure and the unfulfilled role of hierarchy: Lessons from a near-war. Organization Science, 18 (3): 455-477.

Kogut, B., Urso, P. and Walker, G. (2007). Emergent Properties of a New Financial Market: American Venture Capital Syndication, 1960–2005. Management Science. 53 (7): 1181-1198.

Freshii uses flat organizational structure type in running business. The flat organizational structure has become more popular in the recent years and has been replacing traditional hierarchal type of organizational structure in the recent years. This type of stricture means every employee own a piece of the company in their area of expertise. By giving employees a share in the company the heads of departments and CEO ensure their effectiveness. Because workers perceive the company as their own and thus are interested in its success. Therefore, they work out of passion and dedication to what they do.

Freshii’s corporate culture focuses on passionate and competitive working environment, which is why flat organizational structure suits the company’s values. Flat structure underlies the employee’s desire to make a company successful. Making the company reach certain goals requires the workers to be active and fierce at the work. Therefore, the company’s organizational structure and culture align and complement each other.

Franchises of Freshii are interested in making big profit because they are a business organization, therefore they guarantee adherence to the company’s culture. The corporate values and environment have proved to be a successful business model, which is why denying the ready business smodel would disadvantageous. Moreover, company headquarters choose like-minded employees and franchise partners in recruitment and rights sales. These factors prove that partners adhere to the company’s rules and working culture.

I would like to work in such type of structure because it fulfills my personal requirements of a right company. I believe that motivating workers shall be tangible, for example a company share. Employers should not convince workers to think of a company where they work as their own but rather should give a piece of ownership to the worker. Eliminating direct hierarchy is also beneficial because it provides space for creativity and initiative. Therefore, this type of structure is attractive to work in.

Reference

Freshii. (2017). Organizational Structure At Freshii. Viddler. Web.

An organizational structure refers to a system established to oversee the organization’s flow of activities to achieve its goals, which include roles, rules, and responsibilities. There are several organizational structures, such as product, functional, matrix, customer, and geographic. I prefer the functional one because it categorizes individuals as per their particular functions. The accounting, human resource, and purchasing departments have distinct secured zones from which they operate, thus independently managed. Another example of the functional organizational structure’s events is that there is a director to whom managers of various functional areas report (Young & Ghoshal 2016). The director acts as the overall in charge of the operations of the organization.

One of the vital advantages of the functional organizational structure is the fact that functions are run on the basis of expertise, which allows for maximum productivity of each individual because they are engaging in duties in which they are most efficient. However, a disadvantage of this system is that departments may tend to operate as solo units, which may lead to failure to support the functions of the other areas of expertise, thus making the organization lose its sense of unity, which is pivotal in any organization’s success. I also prefer an organizational structure that operates by some guidelines, which are of massive benefit to the organization. The functional Organization structure works by these guidelines. One of the guidelines includes having goals of the organization defined by those at high levels, such as the director of operations. There are also apparent job descriptions present for each job, ensuring each worker knows what is expected of them. There should also be clear lines of responsibility and authority that guide everyone’s behavior. Another guideline is that top management is the one that makes crucial organizational decisions—all these sum up a preferred organizational structure.

Reference

Young, C., & Ghoshal, S. (2016). Organization theory and the multinational corporation. Springer.

Introduction

Uniqlo Company Limited is a Japanese firm that deals with designing, manufacturing, and retailing casual wear fashion products. The firm was founded in 1949 at Ube in Yaamaguchi Prefecture. The firm operates a fully consolidated subsidiary of Fast Retailing Company Limited and its headquarters are located at Tokyo, Japan.

Fast Retailing Company Limited adopted different strategies in its pursuit for competitive advantage. For example, in 1997, the firm adopted the private-label strategy, which was one of the major strategies used by The Gap – a major American retailer. Fast Retailing Company established its first Uniqlo store in Tokyo in 1998 and later spread to other cities.

In 2001, Uniqlo integrated internationalisation as one of its strategic actions. Consequently, the firm separated from the parent company, viz. Fast Retailing Company Limited. This move led to the establishment of outlets in different parts of the world. In 2002, Uniqlo established its first outlet in London. Currently, the firm operates 10 stores in different parts of the UK. Nine of the firm’s stores are situated in Greater London.

However, Uniqlo experienced a number of challenges after entering the UK retail industry, which led to a significant decline in the volume of sales. The UK fashion industry has undergone remarkable growth over the past two decades. Thompson (2012, par.1) asserts that the ‘industry is the most internationalised and fiercely competitive retail sectors, while structural changes have changed the way fashion retailers do business’.

This paper focuses on Uniqlo’s competitive position in the UK clothing retail industry. Findings of the study will give the firm’s management team insight on the best practices that it can adopt in order to gain sufficient competitive advantage. The paper focuses on internal and external business environments, with specific reference to the Uniqlo Company in the UK. Moreover, the paper evaluates the various strategies that Uniqlo should consider in order to improve its competitive advantage.

Market analysis

Businesses are subject to changes emanating from the environment of operations, which is comprised of external and internal environments (Baker 2012). Consequently, it is imperative for firm’s managers to gain ample understanding of the business environment. Conducting a macro-environmental analysis is one of the ways through which firms can gain an understanding of the external business environment.

Baker (2012, p. 23) argues that macro-environmental analysis ‘seeks to provide information about events and relationships in a company’s future environment’. Such information would assist the firm’s management team in charting the organisation’s future course of action, hence enhancing attainment of the desired competitive advantage.

In a bid to understand the macro environment, it is imperative for marketing managers to adopt effective business models such as the PESTLE model. The model aids in understanding the political, economic, social, and legal factors affecting a business. Aniqlo’s operations are not shielded from macro-environmental changes.

PESTLE model

The illustration below shows an analysis of the fashion business environment in the UK using the PESTLE model.

Political environment

The performance of businesses in the retail sector is subject to the prevailing political trends and structure in different ways. Some of these ways relate to political stability and policies on land-use planning systems. The UK is one of the politically stable countries in Europe.

Its stability has arisen from the adoption of a monarchical system of government. Consequently, the country is characterised by a relatively low degree of political risk, which has made the UK an attractive investment destination to a large number of foreign investors. On the other hand, the UK has implemented effective land-planning system, hence providing retailers with an opportunity to locate their businesses strategically.

Economic environment

Uniqlo’s management team should be conscious of the fact that the firm’s operations will be subject to economic changes. The global fashion industry has undergone remarkable transition over the past two decades and the UK clothing industry has not been excluded. Some of the major changes relate to economic uncertainty. The 2008 global economic recession coupled with the 2010 Euro Zone sovereign debt crisis has made consumers sceptical about the future (Nichols 2010).

Consequently, consumers have reduced their consumption on luxury and fashion products remarkably. Moreover, the consumers’ marginal propensity to save has increased remarkably compared to marginal propensity to spend. The commitment of the UK government to enhance the country’s economic recovery is likely to improve the consumer’s purchasing power and this trend is likely to lead to improvement in Uniqlos’ sales volume in the UK.

Social environment

Firms are also subject to changes emanating from the sociological environment. Some of these changes relate to changes in tastes and preferences. The changes in consumers’ tastes and preferences are motivated by lifestyle considerations, which are fuelled by change in the consumers’ beliefs and attitudes. Fombrun (2008, p.15) asserts that the ‘modern consumers are a mass of contradictions, many of which are inexplicable on any rational basis’.

Currently, branded products are more marketable as compared to non-branded products. The fashion industry in the UK has experienced a remarkable change with regard to the consumers’ tastes and preferences. The customers’ requirements relate to both the service provided and the product purchased.

One of the most evident trends in the UK fashion industry relates to the increment in demand for variety and high quality clothes. Consequently, it is essential for firms in the industry to consider adjusting their operations in order to meet the customers’ needs and expectations.

It is imperative for retailers to understand the prevailing demographic structures and trends. For example, the UK children have become a key element in the determination of their spending in the ‘tweenies’. Therefore, it is imperative for the fashion retailers to forecast possible demographic trends and their influence on the consumers’ behaviour (Fombrun 2008).

Technological environment

Technology has had a significant impact on the UK fashion industry. First, the emergence of information communication technologies has empowered consumers with regard to fashion trends. Consequently, consumers are increasingly demanding firms in the industry to design and develop fashion products in accordance with the prevailing market trends.

Technology has empowered fashion retailers by providing them with an opportunity to share data on fashion, hence enhancing their ability to make optimal business decisions. Technological changes in the UK with regard to information communication technology have changed how businesses undertake their marketing practices such as marketing communication. Moreover, the development of the broadband technology has revolutionalised how retailers communicate to their customers (Thompson 2012).

Firms are increasingly adopting emerging social networks such as Tout, Flickr, You Tube, Google +, and Facebook in their marketing communication. Similary, consumers have embraced technology in the consumption processes. Therefore, adopting the above technologies will improve the effectiveness and efficiency with which Uniqlo communicates with its prevailing and potential customers.

Technology has also provided fashion retailers with an opportunity to be effective and efficient in their manufacturing process. For example, improvement in computer-aided technology has enhanced the effectiveness and efficiency with which fashion firms design and produce their fashion products. Integrating these technologies will improve Uniqlo’s competitive edge and hence its position in the UK fashion market.

Legal environment

The UK government has instituted effective legal structures in an effort to stimulate the country’s economic growth through entrepreneurship. For example, the government has established a number of special economic zones in an effort to stimulate economic growth across the country.

Investors in the set economic zones are offered tax holidays. Moreover, the UK government has instituted comprehensive intellectual property laws in an effort to protect innovation. Consequently, investors cannot lose their invention to counterfeit products. The government also implemented laws that aim at curbing unfair business competition. Thus, both local and foreign investors are protected.

Industry analysis

Porter’s five forces

Prior to formulating the business-level strategy, it is essential for firms’ management teams to develop a comprehensive understanding on the forces that influences the industry’s level of profitability. The Porter’s five forces model is one of the tools that businesses can exploit. The model is comprised of five main components, which include the threat of rivalry, buyers bargaining power, supplier bargaining power, threat of new entrant, and threat of substitute.

Threat of entry: moderate

The UK fashion industry is characterised by a moderate threat of entry, which arises from the view that the industry has been dominated by global and local stores. Some of the major players include departmental stores such as Lewis, Selfridges, and John Lewis. The threat of entry is further minimised by the existence of supermarkets and individual stores such as Gap, Next, and Tesco, which have diversified their product offering by selling fashion clothes. Gap ranks as the leading casual apparel retailers in the UK (Companies and Markets 2013).

Moreover, the presence of variety stores such as M&S and BHS has diminished the threat of entry. The intense competition in the industry has led to a significant decline in switching cost. Consumers can easily shift to competing firms in their consumption process. New entrants face a major challenge in their quest to attain an optimal market position in an industry that is dominated by major competitors. The large fashion retailers in the industry have developed remarkable economies of scale, thus making it difficult for new entrants to succeed.

Threat of substitute; high

The UK clothing and textile industry has experienced a substantial increment in the volume of fashion products over the past decades. One of the major challenges relates to the existence of a large number of local and foreign retailers. The retailers produce and market different apparels. The intense competition presents a major challenge to fashion retailers as consumers can easily switch to competitors at a low cost.

For example, if the competitors are offering high quality and stylish clothes, the likelihood of customers switching to the products being offered is high. The threat of substitute is further complicated by the existence of counterfeit clothes in the UK clothing industry. Melik (2012) asserts that counterfeit clothes are increasingly being produced and sold in the UK market in an effort to raise cash for charity. This aspect presents a major threat in Uniqlo’s quest for an optimal market position in the UK.

Supplier power; low

According to Kohli and Thakor (2007), high supplier power refers to the ability of suppliers to influence product prices upwards through raw materials, labour, and other services that they provide to a particular firm. The UK clothing industry is characterised by a relatively low bargaining power due to numerous suppliers of the necessary raw materials. Consequently, the suppliers cannot influence the market price.

Buyer power; high

The industry is characterised by a high buyer bargaining power due to the intense competition. Consumers have a wide range of options to select from in the course of making their purchase decision with regard to apparels. This aspect has provided consumers with an opportunity to influence the market price of apparels downwards. The high buyer bargaining power has led to the creation of price wars amongst casual wear retailers in the UK in an effort to develop customer loyalty (Yee & Sidek 2008).

Rivalry-high

The UK fashion industry can be described as mature as evidenced by the intense competition emanating from local and global players and the large number of substitutes. In a bid to survive in such an industry, it is imperative for Uniqlo to ensure that it integrates effective operational strategies.

SWOT analysis

A number of industry trends and opportunities can be identified from the above analysis. First, the industry is experiencing unpredictable fashion trends emanating from the high rate of product innovation and development. The volume of counterfeit products has increased remarkably, which is a major threat to the survival of Uniqlo. Furthermore, the intensity of competition in the industry has increased significantly over the past decades. Below is a summary of the Uniqlos’ strengths, weaknesses, opportunities, and threats.

Businesses have experienced a significant increment in the degree of complexity emanating from different sources over the past decade. Some of the major sources of complexity relate to the high rate of development with regard to information technology, global economic changes, and change in consumer behaviour amongst others.

Despite these aspects, firms must survive in order to attain their long-term goals and objectives. According to Birkin (2012), developing and sustaining competitive advantage is a critical element in the long-term survival of firms. Business managers are increasingly being concerned on how their firms can attain the desired level of competitiveness.

Furthermore, most business managers are of the opinion that developing sustainable competitive advantage will play a critical role in their firms’ pursuit for above-average performance. In order to attain the desired level of competitiveness, it is imperative for business managers to integrate effective competitive strategies. Some of the strategies that Uniqlo can exploit in order to develop the desired competitive advantage are evaluated herein.

Developing competitive advantage

Brand equity

One of the most important aspects that Uniqlo should focus in its quest to attain competitive advantage is brand management. Kayaman and Arasli (2007) argue that branding is one of the most essential elements in the success of firms in different economic sectors.

Erdem et al. (2006, p.34) define brand as ‘a name, term, sign, symbol, design or combination of them which is intended to identify the goods and services of one seller or a group of sellers and to differentiate them from those of competitors’. Another study conducted by Michael Porter shows that branding becomes a source of competitive advantage if it enables an organisation to exploit operational excellence, product leadership, and develop customer intimacy.

Branding enhances the effectiveness with which an organisation develops a strong relationship with its customers (Rubini 2010). The intensity of competition in the UK clothing and apparel industry has led to the introduction of products of comparable quality. Consequently, it is essential for the industry players to consider the most effective strategy that it can integrate in order to build value for its products (Fombrun 2008).

Branding is comprised of a number of activities, which culminate in the development of a high brand identity. Branding serves a number of functions to consumers. One of these benefits relates to identification. Through branding, consumers are in a position to identify with a particular product due to its high quality, which culminates in development of a high level of customer loyalty (Healey 2008).

In a bid to leverage on brand management as a source of competitive advantage, it is imperative for Uniqlo to focus on how to develop brand equity. Rubini (2010, p.3) defines brand equity to include ‘the differential effect of brand knowledge on customer response’. The firm should take into account a number of aspects in the course of managing brand equity, which include brand vision, identity, awareness, image, loyalty, and premium.

Developing a clear brand vision

In an effort to attain competitive advantage by developing brand equity, it is imperative for the Uniqlo’s management team to consider a number of issues. First, the management team should develop a clear brand vision. The brand vision outlines what an organisation stands for and intends to deliver to the target audience consistently. In a bid to achieve this goal, the firm’s management team should integrate a number of leadership values.

One of the leadership values that Uniqlo should consider entails designing and developing innovative apparels in order to meet and exceed the customers’ expectations.

Moreover, the brand vision should be clear and consistent. The firm’s management team should focus on delivering the brand promise, which is essential in businesses’ efforts to develop a high level of trust amongst customers. With regard to consistency, the firm should ensure that the value that its products create to its customers is improved consistently in order to align with the market trends.

Enhancing brand identity

Hitt, Ireland, and Hoskisson (2009, p.6) define brand identity as ‘all elements by which the brand communicates with the world around it’. Brand identity is comprised of three main elements, which include the logo, brand name, and the slogan. The brand name acts as the foundation for a particular product or service identity.

Consequently, it constitutes the various elements of brand identity. Developing an effective and unique brand name is fundamental in an organisations’ effort to develop sustainable competitive advantage. Sahaf (2008, p.281) argues that the ‘brand name contributes to the success or failure of a product’. The brand name should be distinctive, short, easy to pronounce, timely, and simple. Furthermore, the brand name should be easily adopted by different advertising mediums (Sahaf 2008).

Adopting such a brand name enhances the effectiveness with which businesses differentiate their products. Hansen and Christensen (2003) argue that an organisation can change its corporate name successfully. On the contrary, changing the brand name poses a major risk to organisations’ equity.

Subsequently, an organisation’s brand name can be regarded as a long-term commitment. Currently, Uniqlo has adopted an effective brand name, viz. ‘Uniqlo’ in marketing its products. The brand name is derived from the term ‘unique’, which communicates the distinctiveness of the firm’s casual wear products (Williamson 2007).

Logo

A logo refers to a graphical mark that is used to distinguish a particular company and its products. Logos are considered as organisations’ intangible assets and they have become an essential element in organisations’ efforts to develop and sustain a high identity.

Foxall, Goldsmith, and Brown (2006, p.97) contend that logos ‘enhance the effectiveness and efficiency with which an organisation products and services penetrate the market especially in situations where consumers make purchase decisions at the point of sale, where the brand logo can be displayed prominently on the packaging or point-of-sale displays’. Logos enable consumers to be familiar and exposed to an organisation’s products and services.

Consumers comprehend graphic information more effectively and holistically as compared to textual logos. This aspect attracts consumers to a brand, hence influencing their purchase decision. Therefore, logos play a critical role in organisations effort to differentiate their brand.

Currently, Uniqlo produces plain casual wear, which has affected its ability to market its casual wear products to the UK consumers (Long 2009). In a bid to develop a strong customer base in the UK, it is imperative for the firm’s management team to consider improving its casual wear products by designing and integrating an effective logo. The logo should be incorporated in Uniqlo’s casual wear. The firm should also consider undertaking a continuous improvement on the logo, but it should only be modernised if necessary.

Slogan

The slogan is an essential element in an organisations’ branding effort as it increases the rate of consumer retention and desire to purchase in a particular store. Therefore, one can describe a slogan as an advertising statement, which aims at communicating what the brand entails. Barnes (2007) asserts that the slogan adopted should be clear and concise. The slogan should appeal the targeted consumer group and address the consumers’ needs.

Currently, Uniqlo has adopted the phrase ‘Made for Everyone’ as its slogan. This slogan communicates the market acceptability of the firm’s products amongst consumers from diverse demographic characteristics. Spies-Butcher, Paton, and Cahill (2012) are of the opinion that embedding the slogan and logo on the product aids in establishing a high brand identity amongst the consumers. Therefore, it is imperative for the firm’s management team to consider this move.

Building a strong brand awareness

Uniqlo should focus on creating a sufficient level of brand knowledge in the market. This aspect will increase the degree with which consumers identify its products. In a bid t achieve this goal, the firm should take into account two main elements, which include brand recognition and recall.

Brand recognition refers to the ability of consumers to confirm prior knowledge or exposure to a particular product or service if given the brand as a cue. This assertion means that the consumer is in a position to discriminate the brand. Brand recall on the other hand refers to the ability of the consumer to remember the brand if provided with a wide range of brands to select from (Pride, Hughes & Kapoor 2008).

Kuang, Yeh, and Yang (2009) contend that brand awareness is a fundamental component in consumers’ decision-making process. In their decision-making process, consumers think about the brand. Subsequently, increasing Uniqlo’s brand awareness will enable the firm to increase its market dominance.

In a bid to attain a high level of brand awareness, it is imperative for the firm’s management team to ensure that its products are of high quality, as consumers tend to prefer familiar and well-established brands. Kuang, Yeh, and Yang (2009, p.4) further argue that brand ‘awareness affects consumer decision making b influencing the formation and strength of brand associations in the brad image’.

Shimp (2013) is of the opinion that the core objective of advertising is to create brand awareness. Advertising aids in creating brand exposure. Therefore, it is imperative for Uniqlo’s management team to adopt an effective market advertising strategy in order to create the desired level of brand awareness.

The firm should consider leveraging on digital marketing. Green (2013, par.1) argues that it ‘is no secret that in this day and age, online presence equals brand awareness’. However, the effectiveness with which an organisation presents its brand online determines its success. Green (2013) further argues that it is essential for organisations to ensure that their brands are highly recognisable, authentic, and relatable, as this aspect will aid in differentiating the firm form competing products.

Uniqlo should strive to improve its online brand presence, which will enable the firm to attract a large number of consumers who are increasingly becoming technological shrewd. Uniqlo should consider a number of issues in order to leverage on its online brand presence successfully as illustrated below.

Consistent branding

The firm should consider adopting a consistent branding strategy in all the online platforms that it integrates in its brand awareness effort. This assertion means that Uniqlo should not adopt a different branding strategy on one marketing communication platform and a different one on another. Being consistent in its branding will enable the firm to reinforce its brand.

Optimising the company website

Uniqlo has developed an effective official website through which customers can access product information and purchase goods online. However, it is important for the firm’s management team to consider the most effective strategies that it can adopt in order to enhance the volume of traffic in the website.

Uniqlo should consider leveraging on the growth of search engines. Currently, consumers are increasingly using the Internet to search for product and service information. It is estimated that approximately 93% of consumers use the Internet to search for product information, while 83% use the Internet to evaluate alternatives.

This aspect illustrates the significance of the Internet in the consumers’ decision-making process (Reynolds & Olson 2001). Gao (2005) asserts that information search is a critical step in the consumers’ decision-making process. This knowledge presents a perfect opportunity in Uniqlo’s effort to enhance the level of brand awareness.

Uniqlo’s management team should consider registering with major search engines such as Google, Yahoo, Ask, and MSN in order to increase the volume of traffic to its website. However, the firm should evaluate the effectiveness of the search engine in order to determine its feasibility. Through this strategy, Uniqlo will be in a position to communicate its brand to a large number of potential customers (Riesenbeck & Perry 2008).

Social-media

Uniqlo should consider developing competitive advantage by integrating social media marketing. In the 21^st century, social media has become an important component in businesses’ efforts to improve brand visibility, brand recognition, and brand loyalty.

Moreover, businesses are increasingly using social media by to grow their sales, as an organisation is in a position to reach a large number of consumers (Rubini 2010). The firms’ management team should consider creating awareness regarding its casual wear products on different social media platforms such as Facebook, Flickr, Twitter, You Tube, Metcafe, Vimeo, and Tout amongst other.

In 2010, Uniqlo adopted a social media marketing campaign through its Twitter account dabbed ‘the lucky counter campaign’ (Whitehead 2010). Consumers who commented positively regarding the firm’s product on Twitter were awarded a price discount. Moreover, it is important for the firm’s management team to consider creating blogs and wikis in order to interact with customers.

Green (2013, par.9) contends that blogging ‘is one of the most effective ways to improve the visibility of a brand online’. Moreover, blogging contributes towards the establishment of a strong relationship with different stakeholders such as customers and influencers.

Social media will improve the effectiveness and efficiency with which the firm interacts with its customers. One of the major concerns in its social media marketing effort should be how to gather sufficient market intelligence.

For example, the firm should use social the information [the customers’ opinion and comments] gathered on social media such as Facebook to develop and improve its products. Zarrella (2010) argues that such a move is critical in improving an organisation’s ability to develop products that align with the prevailing market trends.

Improving brand image

Uniqlo should focus on developing a strong brand image. One of the ways through which this goal is achievable is by ensuring that its casual wear products are characterised by appealing attributes. This aspect will culminate in the development of a strong perception regarding the consumers’ products and services.

In the course of developing a strong brand image, Uniqlo should focus on product-related attributes. Hoyer and Maclnnis (2008) define product attributes as the various ingredients that are used in the process of producing a particular product. Uniqlo should ensure that its casual wear products are designed effectively. The firm should seek the services of qualified and innovative designers. Fashion and innovation are inseparable due to the timeliness and newness of fashion products (Ind 2007).

In the course of designing its casual wear clothes, it is important for Uniqlo to understand the benefits that the consumers intend to derive by purchasing a particular product. These benefits are categorised into experiential, functional, and symbolic benefits. Functional benefits refer to the effectiveness with which a product satisfies the consumers’ motivation.

Experiential benefits refer to the consumers’ feeling after consuming a certain product or service, while symbolic benefits refer to the extent to which a product contributes towards the improvement of the consumers’ self-esteem and social status (Pride & Ferrell 2011).

Considering the high rate of technological advancement with regard to how clothes are designed and marketed, it is imperative for Uniqlo’s management to consider leveraging on modern technology. This move will contribute towards development of innovative and high quality products clothes (Mozota 2003).

Conclusion

Businesses operate in an environment that is characterised by a high rate of dynamism and change. Consequently, it is imperative for the firms’ management teams to understand the prevailing market conditions in order to develop and sustain a high level of competitive advantage. This paper has shown that the UK clothing market has become very competitive over the past decades due to the transformations within the macro environment.

For example, the attractiveness of the industry has led to the establishment of a large number of local and international companies such as Next, Gap, and Tesco. The market is characterised by a large number of departmental stores and supermarkets, which deal with different casual wear products. Moreover, changes in consumer behaviour with regard to apparel products have presented a major challenge to industry players.

The large number of industry players has made it difficult for new entrants to enter. However, the existing firms should strive to gain from the high market potential, which is only achievable if the firms develop and sustain a high level of competitive advantage. Numerous authors have asserted that competitive advantage acts as a defence mechanism in an organisations effort to attain long-term survival.

Despite the high degree of industry rivalry, Uniqlo can achieve long-term survival by enhancing its competitive advantage. However, this aspect will depend on how effective it implements its competitive strategies. Uniqlo should consider integrating effective brand management strategies. One of the elements that the firm should focus relates to improving its brand equity, which will entail a number of elements such as developing a clear brand vision and brand leadership.

Uniqlo should also focus on improving its brand identity by investing in the development of slogan, brand name, and a slogan. One of the major sources of weaknesses in Uniqlo’s effort to market its product in the UK is that it offers plain casual wear products. In a bid to improve its performance, Uniqlo should consider branding its casual wear clothes by embedding a logo and a slogan on the apparels manufactured.

It is also essential for the firm to consider developing strong brand awareness by integrating effective marketing communication strategies. The firm should consider leveraging on digital marketing by adopting emerging marketing communication technologies such as social media. Social media marketing will enable the firm to communicate to a large number of customers.

Through social media, Uniqlo will be in a position to interact with potential customers, hence enhancing the level of customer relationship. Furthermore, the firm should consider entering into a contract with major search engines. The contract will enhance the number of customers visiting the firm’s official website, hence improving the likelihood of increasing its sales.

Uniqlo should also focus on improving its brand image and to achieve this goal, the firm’s management team should ensure that its products are designed and manufactured effectively. High quality and safe materials should be used in manufacturing the casual wear clothes. Moreover, the firm should hire qualified, creative, and innovative designers to aid in the process of designing the casual wear clothes. Integrating the above strategies will significantly enhance the firm’s competitive advantage and hence its market position.

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Executive summary

The paper analyzes the MAC Cosmetic business plan, its strengths, weakness, opportunities and threats. In addition to that, its essential qualities have been compared to its competitors. Moreover, recommendations have been provided to ensure the effective execution of the MAC Cosmetics’ organizational structure.

Introduction

Background Information

MAC also referred to as Make-up-Art Cosmetics, is a highly distinct corporation. The business strategies and founding principles of MAC are extremely simple yet very effective in terms of contributing to the success of the company. Mac does not utilize business schemes that are fancy. In addition to that, it is greatly concerned with its consumers.

In the initial stages, the company struggled to establish itself. However, at the moment it has gained momentum and it is now a multimillion-dollar enterprise. Furthermore, the company is growing rapidly and has some of the most demanded and popular cosmetics present in the market environment. MAC as a company is remarkably dynamic and produces various products such as hair care, skin care, cosmetics and beauty products.

These products are meant for everyone such as the young or old, conservative or trendy, poor or rich, male or female. Given the fact that the company has the ability to easily expand to various locations, the company does not advocate for the idea of expanding. This is because the company believes that, for purposes of maintaining high quality levels, remaining in control is the key to the company success (Anonymous. Fragrance Wholesome, 2012)

MAC cosmetics were created with an extremely creative vision. The vision aim was to fill the existing gap between fashion photography and makeup artistry. In order to meet the increasing demand of beauty and entertainment professionals, Frank Toskan, a fashion photographer and Frank Angelo a salon chain owner, launched in 1985 a fashion frontward line in Toronto.

Long before MAC company history, the founders of MAC cosmetics (Toskan and Angelo) diverted their product line towards the fashion and beauty professionals industry that relied heavily on cake makeup, heavy cosmetics and stage makeup.

This was done in order to create the visual effects required to endure bright light during their shooting of photos.” Who better rise up to this demand than a fashion photographer”. With a product line that is celebrity endorsed and a glamorous image, MAC cosmetics takes the lead in the beauty industry (Machalack, 2012, p.1).

Revenue, Global Reach and Company Size

Estee Lauder in 1998 bought MAC and helped the company grow globally. Estee Launder generates 6.3billion dollars yearly between their twenty-five distinct brands. MAC is responsible for one hundred and sixty million of the revenue generated by Estee Lauder. Currently, MAC has over one thousand stores and is present in sixty seven countries around the globe (Anonymous, MAC Capaign, 2012)

Strategic Options for MAC Cosmetic

For the company to remain significant in the highly competitive market, it has to utilize the following modeling tools: Balanced Score Card and SWOT analysis. A SWOT analysis of the company helps in bringing out the strengths, weaknesses, opportunities and threats to the company as illustrated below

MAC SWOT Analysis

Solutions for Each SWOT Analysis

Make-Up Art Cosmetic has more strength compared to weakness. The direction being pursued by the Company is quite promising to a future increase in both of its finances and brand name. The company can utilize this increment to their advantage such as creating more demanded products such as lip shade palettes and or/ eye shadows. Despite the MAC Company made for makeup artist, it is being sold to Estee Lauder and the general public.

In that case, the MAC owners need to keep their statement in mind” Wanting to touch everyone.” Their major competitor, NARS, a make-up Art Cosmetics won the competition because when they sell their products to consumers, the consumers feel like they are achieving more. In addition to that, they like the compactness of NARS.

Given the fact that online shopping creates a great opportunity for the MAC Company, it can also be a great threat to their personal services that are pampering in nature. MAC customers have the urge of purchasing the company’s products online; however, they might also need to try first the product.

For instance, majority of individuals often want to try Make Up products to find out if they actually blend with their skin. Similarly, it is mandatory for them to confirm if a product is suitable for their skin. The company should go ahead and promote their online store. However, MAC should continue promoting celebrity posters on their standing stores that are free for purposes of keeping their personal experience celebrated by its consumers (Joines, 2009, P.12).

Balance Score Card

A balance scorecard is a management and strategic planning system utilized to align the business activities to an organization vision statement.

Ideally, balance scorecard tries to translate pious and vague hopes of a company’s mission statement/ vision into practicalities of effectively and efficiently managing the business. Therefore, through the use of a balance scorecard, MAC Company needs to look at the following areas in order to improve these areas. As a matter of fact, these areas are seldom exhaustive and in most cases are specific to a company.

Once MAC has analyzed its quantifiable and specific outcomes of the above, it should be ready to use the approach of the balanced scorecard in order to improve the deficient areas. Moreover, the metric in place must be specific, achievable, measurable, timely and reliable.

This is because an organization cannot improve on what it cannot measure. Generally, the four perspectives of Balanced Scorecard approach are customer, internal business processes, growth and learning and financial. MAC company effective balance scorecard implementation would result in the following: educated/motivated employees, improved processes, information systems that are enhanced, greater customer satisfaction, monitored progress and increased financial utilization (Anonymous. Balance scorecard. N.d)

Comparative understanding of the weakness and strength of MAC Cosmetics with its competitors (Revlon & L’Oreal”)

Currently, the cosmetic industry is in a flux state. Traditional brands such as L’Oreal and Revlon are perceived by customers as being old. In that case, the customers are looking forward to a more healing and holistic benefits from the skin care products. The consumers are no longer contented with the traditional brands thus making it a great challenge to Revlon & L’Oreal products.

The MAC Cosmetics has been able to supply consumers with awareness of natural and cruelty free products. This has impacted greatly on the knowledge of the consumers. The consumers have become more inquisitive about the benefits of MAC personal care products. MAC Cosmetics protects its consumers from damaging rays of the sun, moisturizing their skin and reducing aging effects. The major limitation with MAC cosmetics is that, it has a great demand, but there is no supply.

Whereas the MAC cosmetics are highly demanded than those of its competitors, it has been hectic to find out discounted products (Vasen 2007, p.1). In addition to that, outside United States, there are no media advertisements and most of the people are not aware of MAC products advantages and benefits.

According to statics, the effective way of getting MAC products information is via referrals (Bates, 2006, p.2). Given the fact that there is lack of MAC products promotional campaigns with absence of free samples, the company relies majorly on their existing customers to distribute information about their products.

In the light of the above, L’ Oreal is a company known internationally and their products are sold everywhere in the globe. Nevertheless, its products are distributed around the globe depending on the economical, social and cultural factors as the demand of women are quite distinct from each other.

In addition to that, it offers a variety of products to various countries in order to fulfill the needs of all women. Unlike MAC, L’ Oreal expenses of advertising are fairly high. This is because the company believes that it can only increase its profits via advertising (Uzun 2010, p.1). Just like L’Oreal, Revlon products are sold all over the globe and marketed under various brand names. Their products are meant to satisfy specific needs of the consumers.

Creating Options for the Future Organization Strategy

The most important thing is to assess the external context of the company, clustering and prioritizing threats and opportunities, developing strategic options, rating the options in terms of their significance and implementing them.

MAC external context

Current Legal, economic conditions and regulatory issues

Estee Lauders are expanding their niche in countries that are foreign. This has triggered the issue of foreign exchange, interest rates and each and every country individual issue including war and terrorism. In the year 2008, the interest rates for Estee Lauder contracts were thirty-one million dollars.

Furthermore, it had a currency forward contract of one million dollars in which the most competitive currency was the Euro’s. Various consequences pose a threat to the establishing up of brand new stores in the Middle East. The threats are such as retaliation and terrorist attack. On the contrary, according to 2008 Estee Lauders annual fiscal report, the sales had increased by 20% in the Middle East and approximately half of the stores net sales emerged from foreign countries.

The increased profits were as a result of increased urge of people and their ability to have their personal pampering. In consideration to these sales increase, The Make-up Art Cosmetics (MAC) exhibit an opinion that is optimistic of the economy in its present condition. With this in mind, MAC has been able to expand both regionally and financially (Joines, 2009, p.10).

Importance of technology advancement

Even though MAC has succeeded tremendously by their word-of –mouth strategy, their online environment boosting will help in improving their sales. With a wide recognition of its brand, MAC should exhibit a positive name and more capability of having wide variety of freestanding stores.

Given the fact that MAC is recognized widely by word-of-mouth, channeling more concentration to online will be of great advantage for the company promotional aspects. With more available online shopping, the company will have to incur more advertising expenses. Nevertheless, it should be viewed as a Make-up Art Cosmetic investment (Joines, 2009, p.11).

MAC strategic options

Strategies that are effective have an industry and a company point of view. They aid an organization in making fundamental choices and communicating them for purposes of aligning resources appropriately. The MAC company strategic options will be business growth and emphasis on competition. Business growth will help in answering various questions such as, how will MAC as a company generate new growth?

At what point will the value chain of MAC “anchor” and create internal capabilities that supersede those of its competitors? On the other hand, emphasis on competition will help in finding solutions to the questions such as, how will MAC as a company distinct itself in the eyes of its client?

Company leaders, who channel their investments to principal competences that align themselves to strategy, help in building market value. As a result, investors will have more confidence in the company. Since they believe the strategy will be executed by the company and deliver earnings in the future.

In terms of relevance, identifying a growth strategy comes fast. The growth strategy consists of product service, market/ customer, production capacity, technology and distribution. It is only after a company has chosen its growth option that it can identify its competitive emphasis.

This is where the company finds out the tactics to use in order to differentiate themselves in their customer’s eyes. There exist five principal ways in which a company can differentiate itself. These are such as low cost provider, speed, quality, innovation and service (“Strategic Options”).

Suitable structure for MAC Cosmetic

The organization design essence is to manipulate various parameters that determine coordination achievement and division of labor. Keeping in mind the needs of the organization of MAC, there is need for a matrix organizational structure that focuses on grouping by functions and the market.

This structure will enhance the MAC company end markets. Furthermore, given the significance of the workflow interdependencies, and the company cannot handle them easily via the use of standardization, using of this structure will highly favor grouping market bases for purposes of encouraging adjustments that are mutual and direct supervision. Through the adoption of the matrix organization structure, the MAC will benefit because, projects cost will be minimized and principal people can easily be shared.

The structure minimizes conflict and those in need of referrals that are hierarchical can be resolved easily. It ensures effective balance between performance, cost and time, sharing of responsibility and authority made easier, enhances rapid decentralization of decisions, improved access to a wide range of perspectives and skills that are diverse, improved regional and global projects, increased coordination and communication across the business and lastly reflects the regional customer needs (Scholz 2008, p.248-249).

Criteria for reviewing potential options for a strategy plan

For purposes of reviewing organizational structure and management strategy potential options and the environment, MAC Company must make sure that the perfect strategy considers clearly the size and age of the organization, environment and technical system and the governing framework.

The structure should elaborate its structure clearly. The prospective strategy should shun technical uncertainties, it should provide to the employees the operation and production strategy which proves to be efficient. In addition to that, it should be free of uncertainty strategically.

MAC pressure to come up with products that meets the demands of the customer is so high hence the management strategy proposed should ensure the problems and bottlenecks are dealt with appropriately rather than basing on future conditions analysis. As a matter of fact, new strategy implementation costs an organization millions hence the organizational stakeholders should ensure that they reduce the costs of operation and improve on the organization efficiency.

For the development of the organization, MAC cosmetics should always undergo a significant change at distinct points in their development. Change management comprises of sensitive implementation and thoughtful planning and the ones mentioned above. It is vital for the company to consult with stakeholders affected by the changes. If MAC forces change on its stakeholders, problems will definitely arise.

Organization change must be measurable, achievable and realistic(Huselid, 2005, p.134). In summary, MAC can utilize templates to come up with several principal strategies that can help in addressing the objectives of the organization. Of great significance, the strategies are created based on stakeholder’s inputs, operation and business analysis.

A detailed strategic plan that include implication of resources

Management strategy is an analysis that is systematic of the factors correlated with internal and external environment. The analysis provides the foundation for rethinking the management practices that are current. The principal objective of a strategic plan is to achieve a perfect alignment of strategic priorities and corporate policies.

In the case of MAC, the principal significant points of the agreed strategies that were proposed were concerned with the “Love YOUR LIPS” campaign. Lipstick has often been viewed as a form of refinement. The LOVE YOUR LIPS “campaign focuses on a variety of lipstick styles, techniques and looks. The ad campaigns strive to increase MAC customer sales target market. Additionally, it aims to reach a potential group of customers that are untapped.

Resource implications

The principal components of any strategic plan consist of discussions or analyses of the below named resource implication (Hankin, 2005, p.111-113)

Capacity requirements and Human capital: The human skills and capacity needed for strategy implementation, potential and current sources of these resources. Moreover, other capacity such as management structures, internal systems and a legal framework that is supportive is also needed.

Financial requirements: The required funding to implement the management strategy proposed, potential and current sources for the funds, funding gaps and the most crucial resource

Risk assessment and management strategy: The existing risks and how they can be addressed by the company

Estimate of the lifespan of the project, sustainability and its exit strategy: This addresses issues such as how long the stand strategy will be implemented, the time it will take for the strategy to be modified and why if it is only feasible to modify it and how the strategy will ensure corporate objective achievements sustainability.

Strategic plan management can only be viewed as complete when the discussed components have been clearly defined in broad terms. As the projects heads to implementation, majority of these components are tested in reality and defined deeply.

Comparing Core organization values with current business objectives of MAC Cosmetics

MAC cosmetic exhibits a significant position on social and corporate responsibility. Furthermore, the business public image is greatly supported as a result of distinct environments. MAC is “cruelty-free” as it does not use animals as their guinea pig when testing their products.

They utilize simple white and black packaging that are recyclable. In addition to that, they advocate for recycling practices with the aid of “Black-to-Mac” program.

Customers are often given a free lipstick in exchange of their returned six blank containers. In comparison to other multinational companies, MAC prices are quite good without empty promises. For instance, miracle creams that reduces an individual’s age. MAC Cosmetics is in the forefront supporting the fight against AIDS with the use of” Viva Glam,” the company’s popular lipstick (Anonymous. Ethics and social responsibility, 2012).

MAC environment comprises of all factors that affects the way decision are made within an organization. Therefore, they encompass the forces that can trigger an impact in the organization. Ideally, forces are made up of threats and opportunities which can be divided into external and internal environment.

The internal environment comprises of the management team and the shareholders. The external environment constitutes all the outside forces and institutions that the real potential, impact or interest on the ability of the organization to achieve its competitive objective lies.

The principal objectives of MAC company are as follows: to increase its yearly sales by at least 15% in 2012 in comparison to 2011. In addition to that, it aims to increase its customer involvement in the year 2012 by 20% and also to diversify their brands by renewing the perception of customers on the company by 15% or higher. It is evident that the objectives perfectly align with the company core values.

Through their involvement in social corporate responsibilities and other ethical issues, the company will enhance their revenues and customer perception.

Vision and Mission Statement for MAC Company

Mission statement (“LOVE YOUR LIPS”)

The campaign on “LOVE YOUR LIPS” has been designed for purposes of expanding the image of MAC in the cosmetic industry with a commitment that is continuous to high service, customer satisfaction and service, through the sales and advertisement of MAC lipstick.

Vision: To be the leading makeup professional authority in the world among both professional consumers and makeup artist whilst embracing the MAC credo of all age categories, sexes and races.

Agreed future objectives of the organization

The objective of the MAC Company is to make the company an expert in the industry dealing with cosmetics and also promote the image of MAC and lipstick sales. The LOVE YOUR LIPS” 2011 campaign was designed to increase MAC sales of lipstick, trigger customer involvement and MAC brand diversification.

Measures for Evaluating Strategic Plan

Sustainability

It concerns itself with whether the organization objectives or strategies address the essential issues identified in the acknowledgement of the organization strategic position.

To be precise, these needs an assessment of the extent to which the organization strategic option fits with the crucial drivers and the environment expected changes, strategic capabilities exploitation and its appropriateness in stakeholders content of influence and expectations. Tools such as TOWS matrix, strategic options ranking, scenarios and decision tree can be utilized to access sustainability (Thomas 1993, p.g3).

Acceptability

It deals with the strategy expected performance results. These can be categorized into three: Reactions from stakeholders, returns and risks. The benefits expected to be received by company’s stakeholders from the strategy are the returns. They can be computed by cost benefit analysis and financial analysis. Accessing of company risk is through the performing of financial ratios, sensitivity analysis reactions and shareholders’ value analysis.

Feasibility

Feasibility concerns itself with whether the firm has the needed competence and resources to adequately deliver a strategy. Numerous approaches can be used to acknowledge feasibility. They include resource deployment and financial feasibility among others.

Schedule for implementing a strategy plan in an organization

Monitoring and Evaluation systems for strategy plan implementation in an organization

The above is of great significance when it comes to the identification of organization strategic goals and issues. The advantage of evaluation and monitoring is that, it ensures that an organization strictly follows the strategic plan established directions. For MAC monitoring and evaluation, the six Henry Mintzberg’s monitoring and evaluation basics will be utilized. According to the model, the strategic plan monitoring and evaluation should strictly follow the below outlined six steps (Armstrong, 2002, p.123-126).

Direct supervision: This is whereby a single individual coordinates all the activities via giving orders to other employees. He only plays a role when it is vital for a specific number of individuals need to work together.

Standardization of work process: It comprises the direct programming of work content, putting in place the procedures that need to be followed.

Standardization of outputs: Focuses on the results rather than what is not supposed to be done, there is predetermination between job interfaces. For instance, the manager of a region is tasked with ensuring that he achieves a 10% sales growth so that the company can meet overall target sales. The standards often results from the company analysts.

Standardization of Skills: Helps in achieving coordination in the company. In this step, it is the worker rather than the outputs or work that gains standardization. The organization teaches its workers are taught a wide range of knowledge and a couple of skills which are consequently applied to the organizations work. The standardization process occurs outside the organization environment. For instance, in a profession school of university prior to job allocation. Unlike the standardization of outputs, these skills do not emanate from the analyst. On the contrary, the operator internalizes them as inputs to the job a worker is in pursuit of.

Standardization of norms: This is when the organization employees have a set of belief that is common and coordination of achievement is based on it.

Mutual adjustment: Helps in work coordination by the informal process simple communication. Those individuals working can interact in order to coordinate and achieve results. Paradoxically, mutual adjustment can be utilized in situations that are extremely complex. This is because; it is the only avenue that can be relied upon under circumstances that are extremely difficult.

Conclusion

The “LOVE YOUR LIPS” MAC campaign will greatly help in promoting the company lipstick sales. In addition to that, it will assist the company in involving customers in their activities and also in diversification of the MAC image. In comparison to its competitors, the company has numerous strengths and opportunities such as, brand recognition that is positive, customer loyalty, appealing packaging, trend setting, celebrity support and reasonable pricing among others.

Recommendations

The business strategic plan of MAC should boost online buying and selling for purposes of capturing market outside the United States of America. In addition to that, the company should consider supplying its brand to drug stores just like its competitors. Furthermore, the company should follow the following seven steps in order to make it strategic planning process to be effective.

The steps are such as, the developing or reviewing of the company mission and vision statement, analyzing the operation and business analysis (SWOT analysis), developing and selecting strategic options, establishing of strategic objectives, examining a company strategy execution plan, establishing resource allocation and execution of review. The following up of this seven steps will enable MAC Cosmetics that its various options are included as it forms a cycle that is complete for an existing or a new strategy planning initiatives.

Bibliography

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Vasen, D. 2007, Discount Mac cosmetics. Love to Know-makeup. Web.

Organizational structure, a popular phenomenon in the dynamic business world, can be defined as the manner in which a company allocates its management responsibilities and how different activities are coordinated within the firm. The structure of an organization will always influence its success. A well-devised strategic and operational framework is more likely to enable the company to attain its objectives easily than a roughly sketched one (Zusman, 2021). Small enterprises generally start without a formal organogram but gradually add hierarchical corporate entries with departments, executives, and other subordinate minions as the business expands, thus realizing improved performance. On the contrary, the absence of such a setting in a business implicates operational inefficiencies that may eventually push it out of the market as a result of competition. A breakdown of the absence of a hierarchical model within a business edifice, its predisposing factors, possible solutions, as well as the effectiveness of these interventions, forms the basis of discussion for this paper.

High Rate of Turnover

Employee turnover, often known as staff renewal rate, is a problem in which employees quit their jobs frequently and in large numbers. To compensate, a company must hire new workers on a regular basis to fill such positions. This might deprive the corporation of its resources and cause workflow interruptions (Xianghua, 2020). High turnover rates may be attributed to employees are being disgruntled by management and their leaders, thus making them unsatisfied with their work. For example, when workers are underpaid and would like to be paid more for their efforts, they are more likely to quit. Reaching out to workers and receiving opinions from them may help firms solve this problem. Additionally, making meaningful efforts to address team members’ complaints can boost staff productivity and retention, as reinforced in the section below.

Departmental Discord

Generally, employees report to two distinct heads in a decentralized organization structure: a functional manager and a department manager. For example, a human resources employee specializes in recruiting, employing, and training employees and thus reports to the human resource manager as well as the department head. This strategy can be applied to a majority of the trained personnel in the company. However, time frames and budgets may create rivalry across departments, leading to conflicts of interest between employees in lower divisions and their seniors, making it difficult for management to decide on the right path to take. Effective inter-departmental cooperation and coordination can be used to avoid inconsistency issues among employees, as discussed in the sub-topic that follows.

Inconsistency

Inconsistency can emerge when each department in the company operates autonomously. If company policies and practices are not enforced, employee dissatisfaction and confusion may result. This is primarily caused by workers who shift between different roles, creating inefficiency issues if they act the same way they did in their previous positions (Vithayathil & Choudhary, 2022). When these transitions happen in different departments, customers find it difficult to identify the people in charge of specific roles, thus sabotaging interpersonal relationships between staff and clients. As part of the solution, the business can re-configure customer care services so that each customer is assigned to a company representative. This helps to avoid communication bottlenecks that originate from the firm’s expansion, highlighted in the section below.

Communication Issues

Organizational systems that may have functioned earlier become inefficient as a small business grows. For instance, the use of random briefings by employers for conveying urgent information tends to become obsolete as the firm’s economies of scale expand. The lack of structure or a rigid framework might make it difficult for employees to pursue the company’s objectives because of inflexible schedules that cannot match the dynamism in the world of business. Organizational challenges caused by rapid expansion can be alleviated by establishing good communication modalities, such as print, email, and presentations to facilitate the flow of information (Schwer & Hitz, 2018) Implementing strong project management principles and the adoption of frequent employee evaluation schemes, among other solutions, can help to codify communication methods and strengthen the organizational structure respectively.

Problems Associated with a Substandard Organizational Framework

The rapid rearrangement of organizational units, departments, or activities can result in suboptimal, unbalanced management systems that do not complement the company’s objectives. Poorly planned consolidations can result in a variety of issues that adversely affect the firm’s operation in the long run. For example, when firms downsize middle levels of management without eradicating the job slot, the remaining workers are compelled to perform extra duties. This leads to structural gaps in positions, work procedures, and obligations, as well as an inefficient flow of information within the organization.

Further Reading

Employees from lower ranks who fill the vacancies left by their retrenched colleagues in higher levels of management may not have the necessary knowledge and skills to handle the expected duties. Flexible businesses can instantly access and hire new employees to meet changing business needs. However, with limited resources, most employees can only focus on their current obligations, devoting less time, effort, or motivation to working outside the scope of their existing job specifications (Winnubst, 2018). As a result, a company’s ability to compete is weakened by reduced work capacity and a slow response to consumer needs.

Evaluation of Workers

As a manager, it is possible to develop the correct jobs for the company, but hire the wrong employees for those slots. This can be corrected by revising the job selection criteria and reassigning some staff to duties other than their current ones (Marín-Idárraga & González, 2021). In addition, comparing the current employees to the new organizational chart and documented job requirements can help to identify workers who need to be transferred to new positions, retained in their current ones, retrained, or retrenched. This necessitates the need to redesign the existing organogram in order to smoothen the hiring process, as illustrated in the following segment.

Designing of a New Structure

The manager should build a new organogram based on the existing skills gaps and budget constraints. However, it is important to notify the current employees of the new framework, inform them of their revised responsibilities, and begin their training (Liu & Lv, 2021). The balance between authority and responsibility should be maintained such that senior employees are delegated to core responsibilities within the firm. Lastly, the hiring process should begin by soliciting comments from staff and business networks, as well as posting job vacancies on advertising sites in order to attract applicants who conform to the company’s requirements.

Listing of Requirements

The first step in dealing with a lacking or substandard organizational structure is to establish the problems associated with it. For example, if all managers are directly answerable to the owner and there is no institutional hierarchy, it may be essential to establish a model with levels of management. Once the problems have been identified, a list of management requirements should be created in order to address them (Jonathan, 2018). The dual-phased scope statement should comprise of a management chain listing all the current personnel and their positions. The second chart should contain positions to be attained if the business were launched in the most recent times. These two diagrams will show the current position of the firm alongside its future projected level, making it easy to plan on the company’s best strategies to incorporate for faster progress.

Effectiveness of the Proposed Solutions

Regular assessment of employees has the capability of minimizing conflicts among them. Holding other factors constant, if a worker understands their responsibilities, they will be more dedicated to their obligations. Therefore, assigning each worker what they can do best upon evaluation is a great way to ensure coworkers interact with one another in a poised manner, thus upholding the tenacity of the organization structure (Joseph & Gaba, 2020). In addition, selecting the right people to collaborate with can result in a productive team culture that leads to the timely delivery of products and services. Scheduling all new employees at the same time can cause confusion, while scheduling all seasoned staff at the same time can lead to leadership wrangles. In that regard, a routine with a balanced mix of personality types will ensure a smooth workflow, an efficiently run shift, and effective communication among staff, as discussed below.

Improved Communication

Restructuring an organizational hierarchy leads to a streamlined flow of information and ideas between different divisions and teams, although this will vary from one organization to another depending on the specific framework in place. Employees occupying lower ranks of the company will know who to turn to for particular issues once responsibilities have been delegated to them (Eva et al., 2018). If a given docket has only one manager, for example, it is easier for his subordinates to know whom to report to in case problems emerge. For example, when an employee needs clarification regarding a prospect’s design, they will approach the sales department, and the duo can exchange ideas and implement an agreed decision much faster as discussed below.

Quick Decisionaking Process and Efficient Branch Management

When the company’s varied teams are able to communicate effectively, it will have a favorable impact on overall workflow since decisions will be made more quickly. The flow of information, combined with a well-structured organizational edifice, can help to speed up the decision-making process. Concurrently, the latter can assist business owners to ensure uniform operations and compliance with the same rules for different business branches (Eva et al., 2021). An organized framework serves as a quality control template for them since they cannot always be physically present in all the branches at the same time. As a result, owners are able to realize high quality output as there are no lapses between decisions and their implementation as elaborated below.

Increased Productivity

When a business entity employs effective communication channels and upholds creative strategic management, it is able to grab new opportunities as they arise, capitalize on emerging trends, and boost employees’ morale. An employee who has one superior hardly gets conflicting directions and easily follows the required job instructions without waiting for further approval from higher ranks (Auchter et al., 2018). When employees are happy, they volunteer new ideas and stay committed to their workspace. Therefore, proper organizational structure leads to increased productivity and a firm’s growth potential. For example, when salespersons inform their seniors within the department about an anticipated supply of a machinery or company equipment to be delivered soon, the concerned department is able to make the most effective scheduling plans in advance, such as securing adequate warehousing space and budgeting for transportation costs.

Conclusion

The fundamental management tactics highlighted above can be adopted to better supervise personnel, coordinate activities, and enhance the efficiency of work flow in an organization. When they communicate more efficiently, employees are less likely to make mistakes or have to guess at the roles they are obliged to do. The negligibility of production issues, defective outputs, delayed service deliveries, and cases of customer dissatisfaction are all benefits of a developed hierarchical structure. Aggravation and frustration among both employees and customers come as a result of staff being overworked as they attempt to complete tasks meant for multiple individuals. This causes some employees to be deliberately insensitive to the needs of the client since they feel overburdened. In that regard, managers should assess personnel requirements and ensure that the business has enough skilled specialists on board to cover regular shifts for the provision of smooth, customer-friendly services and maintenance of a proactive organizational structure.

References

Auchter, A. M., Mejia, M. H., Heyser, C. J., Shilling, P. D., Jernigan, T. L., Brown, S. A., & Dowling, G. J. (2018). A description of the ABCD organizational structure and communication framework. Developmental Cognitive Neuroscience, 32, 8-15.

Eva, N., Sendjaya, S., Prajogo, D., & Madison, K. (2021). Does organizational structure render leadership unnecessary? Configurations of formalization and centralization as a substitute and neutralizer of servant leadership. Journal of Business Research, 129, 43-56.

Eva, N., Sendjaya, S., Prajogo, D., Cavanagh, A., & Robin, M. (2018). Creating strategic fit: Aligning servant leadership with organizational structure and strategy. Personnel Review.

Jonathan, G. M. (2018). Influence of organizational structure on business-IT alignment: what we do (not) know. In 17th International Conference Perspectives in Business Informatics Research (BIR 2018), Stockholm, Sweden, September 24-26, (pp. 375-386).

Joseph, J., & Gaba, V. (2020). Organizational structure, information processing, and decision-making: A retrospective and road map for research. Academy of Management Annals, 14(1), 267-302.

Liu, K., & Lv, F. (2021). Analysis on the organizational structure of Shandong Apple industry based on SCP paradigm. Open Journal of Business and Management, 9(4), 1572-1584.

Marín-Idárraga, D. A., & González, J. M. H. (2021). Organizational structure and convergent change: explanatory factors in SMEs. Journal of Small Business and Enterprise Development.

Schwer, K., & Hitz, C. (2018). Designing organizational structure in the age of digitization. Journal of Eastern European and Central Asian Research (JEECAR), 5(1), 11-11.

Vithayathil, J., & Choudhary, V. (2022). Organizational Structure for the IT Department: Profit Center or Cost Center?Information Systems Frontiers, 1-24.

Winnubst, J. (2018). Organizational structure, social support, and burnout. Recent Developments in Theory and Research (pp. 151-162). CRC Press.

Xianghua, Z. (2020). Organizational structure and standard development procedures of standard development organizations-comparative research based on domestic and foreign perspectives. E3S Web of Conferences, 214, 02043.

Zusman, P. (2021). Participants’ ethical attitudes and organizational structure and performance: application to the cooperative enterprise. Agricultural Cooperatives in Transition (pp. 23-54).

Hewlett Packard (HP) has a matrix organizational structure, which implies the distribution of responsibilities based on the different products that the company offers. In particular, in a matrix structure, there are usually two lines of command: one responsible for the functional line, and the other for the product or project line (Iyer, 2021). Within an organization, there are various divisions that interact with each other and are responsible to functional managers (Working together, n.d). Within divisions, there is also a hierarchy of employees and managers. The image of the HP organizational structure, which was modified in 1975, is shown in Figure 1.

The company’s current CEO is Enrique Lores and the CFO is Marie Myers. Lores has been in the position since November 2019 and Myers since February 2021 (Executive leadership, n.d; HP Inc. appoints Marie Myers, 2021). Reporting directly to the CEO and CFO at Tuan Tran, who is President of imaging, printing & solutions, and Santi Morera, who is President of personalization & industrialization business. Thus, the directors of divisions are direct subordinates of the company’s executive leaders.

The HP CEO is currently exemplifying a transformational leadership style. Lores focuses on “differentiated innovation, business model evolution and strategic M&A” (Executive biography, n.d, para, 4). This aspect emphasizes that he is trying to develop and maintain a certain vision in the company. This vision allows it to move forward and maintain a competitive advantage in today’s market. In particular, the CEO promotes innovative solutions to change HP’s strategy and operations in today’s environment, making him a bold transformational leader. These aspects emphasize that Lores is an example of this leadership style.

References

Executive biography: Enrique Lores, President and CEO, HP Inc. (n.d). HP. Web.

Executive leadership. (n.d). HP. Web.

HP Inc. apoints Marie Myers as Chief Financial Officer. (2021). Global News Wire. Web.

Iyer, Y. (2021). A guide to matrix organizational structures. Wrike. Web.

Working together: The HP organization. (n.d). HP. Web.