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Staples Org. Chart, 2015

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Competitors

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Goals

  • Hit shares and growth margins
  • Reverse decline
  • Increase long term profitability

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Strategy

-Low Cost Leadership: increase market share by keeping costs low for competitors-- concerned with stability, cost reduction, tight controls for efficiency.

-Analyzer Strategy: Tries to maintain a stable business while innovating on the periphery. Some products will be targeted at stable environment in which an efficiency strategy designed to keep current customers is used.

  • Expand sales beyond office supplies
  • Become an Online Destination
  • "Right Sizing"
  • Contract growth

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Design

  • Geography: US, International (EU, China, Australia)
  • Departments: Real Estate, Human Resources, Marketing, Merchandise(Buying, Pricing, Planning, Logistics, etc), Technology, Contracts
  • Report to VPs of departments who communicate with each other.

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Vertical & Horizontal Linkages

Vertical Linkages:

  • Upper Level defines Goals and Target Market
  • Mid Level Managers make most decisions for efficiency
  • Mid Level decides purchases, supplies, and prices

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Horizontal Linkages:

  • Departments communicate via department heads.
    • Urgent→ in person
    • Non Urgent→ Phone Call or Email
    • IM Messengers used
    • No liaisons between departments
      • “We like to cut out the middleman as much as possible for efficiency purposes”

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Corporate Culture

  • “In our opinion, the #1 place to work”
  • Started with entrepreneurial spirit and still trying to promote that to their employees
  • “always growing, positive-thinking, and fast-moving”

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External Environment

  • Staples is in a very

complex but only slightly

stable stable

-4/10 Stable

1 being most stable

-8.5/10 Complex

10 being most complex

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External Environment (cont.)

  • Major competitors include:
                  • Amazon
                  • OfficeMax
                  • United Stationers inc.
                  • FedEx Kinkos
  • Their competitive advantages are smaller after the USPS incident
      • However they still have an advantage by being a large name in a shrinking market and combining with other big companies.

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Effectiveness Analysis

  • This section of the discussion will focus on how effective the company is.

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Technical Core

  • Manufacturing Core Technology
    • This is because they both make staples brand products and supply other companies products.
    • They have services they provide but they are still manufacturing

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Variety/Intuitiveness

  • Low Variety (2/10) and Low Intuitiveness (2/10)
    • (High Analyzability)

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Control System

  • Like many big companies their control system is behavioral

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Partners/Suppliers

  • They partner with big supply companies like Brother, Canon, Dell, HP, Inkjet, and many more.
  • Their suppliers are usually the manufacturing companies themselves or in some small cases other wholesalers.
  • They have own distribution network.

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Outsourcing & Collaborative Networks

Staples Outsources...

  • some internal functions
  • some IT designs
  • some marketing
  • a line of Tempurpedic chairs
  • management and cost reductions to consulting groups

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Problems with Size and Bureaucracy

  • Resolving Disputes
  • Paperwork
    • no one is in charge of paperwork yet it’s needed for everything.
  • Bringing things to market quickly
  • working with smaller suppliers
    • because of the terms and quantities demanded by Staples.

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Conflict and Coordination

  • No department dedicated to conflict management.

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  • people who currently handle conflict:
    • management
    • human resources department

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Levels of Workflow and Interdependence

Pooled

  • low communication
  • standardized rules, procedures
  • divisional structure
  • low priority for locating unites close together

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Proof of Interdependence

buying department selects product, style, color

pricing - selects what price should be

inventory department = orders product, etc.

planning - decides how much of that product is desired

marketing - decides what product should look and feel when advertising

shipping and logistics - how it going to get to store

store operations - what it looks like - hows its displayed

advertising department - decides in what ways to advertise product.

legal department - make sure everything in accordance to law

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*with mediating technology that allows departments to work independently.*

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IT System Used

Enterprise Resource Planning (ERP)

  • A system that collects, processes, and provides information about Staples's entire enterprise, including order processing, product design, purchasing, inventory, manufacturing, distribution, human resources, receipt of payments, and forecasting future demand.

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Life-cycle Stage (Currently)

Elaboration Stage

Crisis: need for

revitalization (p. 359).

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“...going through what we term as a “reinvention” as the

millennial becomes more prominent in the workplace

so do the procedures revolved around them”

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“...inefficiencies related to formality are being removed”

- Product Manager of Staples

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Elaboration Stage (continued)

“The mature organization is large and bureaucratic, with extensive control systems, rules, and procedures” (Daft, 361).

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“...the organization shifts out of alignment with the environment or perhaps becomes slow moving and over-bureaucratized, so it must go through a stage of streamlining and innovation” (Daft, 360).

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How decisions are made

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Primarily the Top-Down Approach

purchasing of equipment: mid-level management

establishing company goals: top level management

choosing suppliers: mid-management

setting prices: mid-management

hiring employees: mid-management

establishing target market: top management

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Primarily the top-down approach

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What does this mean?

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It’s a Bureaucracy

Weber’s Dimensions of Bureaucracy

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“...the most efficient possible system of organizing.”

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Why is this a problem?

  • Because a bureaucracy does not support Staples's goal of survival in this competitive environment and chosen strategy to achieve this goal.

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  • Bureaucracy supports efficiency

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  • The goals of staples is efficiency and flexibility

(due to the competitive environment).

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Current Issues

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  • Structure does not support innovation

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  • no formal research and development department

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  • In other words, structure does not support the strategy.

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How Does Staples Currently Innovate?

  • Staples pushed down decision making to mid-level management instead of top level management

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  • individuals are encouraged to be innovative, but must have decisions approved.

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Changes that would promote innovation

  • new organization structure including:
      • Hybrid Matrix Structure

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      • Research and Development Department

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      • full time integrator

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Reason for Full Time Integrators

Remember :

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​

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  • Goals

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  • Strategy

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  • Design

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Reasons for Matrix Structure

Matrix Structure:

balances

  • Vertical Control:
    • control, efficiency, stability, reliability (mechanistic)

with

  • Horizontal Control
    • coordination, learning, innovation, flexibility (organic)

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Reasons for Matrix Structure (Continued)

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Recommendations for Change

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A new organizational chart that is both mechanistic and organic simultaneously.

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Questions?