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Organizational Structure

Discuss About The Journal Of High Education Policy Management?

Woolsworths is an Australian brand of supermarkets presently operating in Australia and New Zealand. It first opened in Sydney, Australia in the year 1924 on December 5. Back then, “it was the Victorian equivalent of the £1 shop, selling everything from stationery to dish cloths for just five cents (Robinson 2008 )”. There are a number of companies in the United States, UK and South Africa with similar names to Woolworths. These however, are not in any way related to the actual company. The company was founded by 5 people namely- Ernest Williams, Stanley Chatterton, Percy Christmas, George Creed and Cecil Scott Waine. By the year 1956, Woolsworth opened its first store in New Zealand and by the year 2972, there were a number of supermarkets emerging in the market. The company kept growing during the late 1920s, unaffected by “the Great Depression”, opening stores in Brisbane and Perth and had around 23 stores by the year 1933. The company was duly impacted during the Second World War. However, after the war ended, the company’s growth was exponential. In the 1970’s it started expanding and opened a number of supermarket stores and slowly became the largest retailer of food supplies by the 1980’s. it was evident that Woolsworth was “growing its retail space quickly (John Rice 2017)”.

Presently, it “is ranked number 2 out of the top 2000 companies in Australia (Copyright © 1999-2017 IBISWorld 2016)”. “The Woolworths and Cols have currently neared 10% of the total Australian retail sales (EssaysUK 2015)”.

Organizational structure can be defined as the hierarchy within an organization. There are a number of types of organizational structures such as functional, divisional, matrix, hierarchy and flatarchy amongst many others.

Functional organizational structure is also referred to as “bureaucratic” and can explained as a “traditional business with a sales department, marketing department, customer service department, etc (Alton 2017)”.

The divisional structure refers to different “divisions” or group that work under one head although, as separate brands. These are also sometimes called as “flatter organizations”.  

The matrix is probably the most confusing of all the various types. In addition to having to report to the division manager, an employee or worker also has to report to and constantly update a project manager. In short, a worker has more than one boss. There are both pros and cons to this method as it provides a lot of flexibility in work but can also create confusion and ambiguity.

Degree of Decentralization

The last most common type of organizational structure is the flatarchy. It is a mixture of hierarchy and flat organizations. In this particular system, there is an open communication system within the organization. It can be thought of as a dynamic structure where the company “allows employees to suggest and then run with new ideas (Morgan 2015)”.

The Woolsworth is decentralized and has a number of work units that are spread across the country and others are even located in other countries. The type of organizational structure that Woolsworth conforms to is the flatter organization. The company has five founders and each of them is the head of certain divisions. The same can be seen below in the flowchart

“A responsibility center is a functional entity within a business that has its own goals and objectives, dedicated staff, policies and procedures, and financial reports (Bragg 2013)”. The main types of responsibility centres include- Cost centre, Revenue centre, profit Centre and Investment centre.

  • Cost centre- A cost centre can be defined as a group that is responsible of the incurring expenses. The company has a cost centre which is further divided into two parts. Expenses on salaries of employees, setting up of new stores etc. fall under the category of engineered costs while the expenditure by Woolsworth on its marketing and advertising is discretionary.
  • Revenue centre- Woolsworth has a revenue centre which is responsible for the measurement of output is done in monetary terms. This includes the company’s sales department.
  • Profit Centre- “In a profit center, performance is measured by the numerical difference between revenues (outputs) and expenditures (inputs)(Kumar 2016)”. Woolsworth has a profit centre too, enabling the company to run for so many years.
  • Investment centre- Investment centre, as the name suggests is related to keep account of the amount of money “invested” in to certain activities to make the business grow. Woolsworth also has an investment centre.

“In light of negative press coverage, Coles and Woolworths have taken several steps towards improving their reputation (Keith 2012)”. Woolsworth has been a responsible organization and has taken measures to ensure it gives back to the community as well as the environment in as many ways as possible. “Effective implementation demands that administrators understand the process and that managers expect to be accountable for performance (Vonasek 2011)”.According to a report released by the company which mentions in detail about the company’s corporate social responsibility, the company has talked about closing gender pay gap, embracing diversity, moving forward to a circular economy and ensuring recycling of its materials amongst many others. The company’s goals consist of three main categories that are “encouraging diversity, the environment and building trusted relationship (Writers 2017)”. It has been observed that the company “gains advantage by concentrating on community?based, environmentally friendly and fair trading policies (Wiliams et al. 2010)”.

The Woolsworth has ensured that 40 percent of the senior managing staff and executive officers in the company are females. In addition to this, they are paid the same amount of money as salaries as their male counterparts. The company is also known to have hired Aborginal Australians, thus proving its embrace of diversity and unbiased recruitment of workers. The company is also contributing to circular economy by ensuring that there is absolutely no food water going down to the land fill and recycling the packaging of its own products. The Woolsworth has also reported a 10 percent decline in its carbon footprint and a decline in refrigerator leakages by 15 percent since 2015.

Types of Responsibility Centres in Woolsworth

There are a number of steps taken by the company to ensure it is doing its bit in giving back to the environment, in addition to those that have been mentioned above. In a article published by the guardian.com, the Woolworth company was reported saying that they shall abandon the use of plastic bags and instead provide their customers with usable bags.   The company’s CEO, Brad Banducci was also reported saying that this was a part of the company’s upcoming policies that had been updated. “Customers would be offered a range of reusable plastic bags to buy (Slezak 2017)”. This proves the company’s commitment towards its surrounding and the environment.

A performance measurement system can be defined as a set of measures taken to collect, analyze and scrutinize data pertaining to the performance of an individual, a group or an organization. This can help in determining the drawbacks and enhance the strengths and ensure better delivery and more efficiency. “Performance measurement provides vital information for advancing social innovation (Wolk, Dholakia & Kreitz 2009)”.

Performance of senior managers in an organization is not only indispensable but also pivotal in determining whether a company shall rise or fall. Senior managers are responsible for almost everything. They need to manage the staff, create new strategies, bring about innovation and provide order in the organization. In short, they are the ones who have the most difficult jobs in any working organization. In an interview of Woolworth’s managing director and CEO, Grant O’ Brien talks about his journey, what motivated him to perform better and how would he as a senior manager encourage and motivate others to do the same. In the interview, Grant tells the interviewer about how he led a team of subordinates in Woolies at the liquor division. They started off with $200 million dollars and a market share of only 9 percent. But as he and his team worked hard and put in all of their efforts, they were able to increase their market share to 35 percent and turnover to $6billion. When asked about how he motivates his sub ordinates, Grant said, “It’s providing the environment for optimism (Unsupported source type (Interview) for source Placeholder3.)”.

From the company’s website, one can take note of the types of reward systems that are offered to its employees.  The first and the most obvious reward to the employees in the company are their fixed salaries that the company owes its employees for doing their jobs. Woolworth also offers its employees variable pays which are listed as short and long term incentives. Woolsworth is known to provide its employees with career enhancing opportunities. If an employee is putting in extra effort or has performed extra ordinarily well, the company makes sure to reward the employee on the spot. This ensures the employee remains motivated to keep up his work in addition to setting an example for the other workers to follow. Difference awards are also given out to the employees when he or she has made an extra ordinary contribution to the company’s business. The company makes sure to reward both the senior management as well as the working staff and organizing annual events wherein individuals ranging from CEO to managers to workers are given annual awards for their exceptional performances throughout the year.

Environmental Responsibility of Woolsworth

In addition to this, the company also makes sure to have a separate reward system for encouragement and motivation of its employees on a continuous basis. This includes a number of things. Employees shopping from the company itself are eligible for discounts. This not only makes the employees happier and more satisfied, but in turn, also increases the sales of the company. The company provides its employees with retirement funding and healthcare benefits. Employees who are of age and have committed to working with Woolsworth seem to benefit from such schemes. Students or part time workers at the company are also offered educational assistance and are eligible for scholarships. There are also benefits for the disabled. Lastly, the company also provides its employees with death cover and a funeral cover in case of accidental death of an employee or death due to old age.

The performance measurement system is such that it benefits one and all. All the employees in the organization whether they are bottom level or top level management, are eligible for being rewarded provided they put in efforts and hard work into developing the business of the company. The reward system of Woolsworth is constructed in such a manner that it is consistent with the organizational structure.

Conclusion

Woolsworth Australia is an extremely popular chain of enterprise dealing in food supply, clothing, liquor and many other products. It has a well-defined organizational structure that is deeply decentralized due to the fact that it has a number of stores in a number of cities, states and countries. The company is also socially and environmentally responsible. It has successfully removed the gap in pay of its male and female employees, which is something women still struggle with even in the 21st century. The company recruits people from all walks of life and different backgrounds without discriminating them on the basis of caste, religion, race or sexuality. It has embraced diversity and set an example for its peer companies. The company has taken steps to recycle its product, embraced circular economy and reduced its carbon footprint in the past few years. The company has always made sure to reward its employees by offering them long and short term incentives, bonuses, annual and exceptional awards in addition to providing perks such as health care cover, retirement funding, discounts, death covers and educational assistance. It makes sure the employees work hard and give in their best efforts in order to achieve its desired goals in a timely and effective manner. Woolsworth is an epitome of a clean, sophisticated structure of organization that cares for one and all and strives for excellence in what it does.

References

Alton, L 2017, 4 Common Types of Organizational Structures, viewed 20 september 2017, <https://www.allbusiness.com/4-common-types-organizational-structures-103745-1.html>.

Bragg, S 2013, The responsibility center, viewed 15 september 2017, <https://www.accountingtools.com/articles/what-is-a-responsibility-center.html>.

Copyright © 1999-2017 IBISWorld 2016, Woolworths Ltd - Premium Company Report Australia, Woolworths Ltd, viewed 18 september 2017, <https://ibisworld.com.au/australian-company-research-reports/retail-trade/woolworths-ltd-company.html>.

EssaysUK 2015, Woolworths Australia History, viewed 19 september 2017, <https://www.ukessays.com/essays/management/history-and-background-of-woolworths-in-australia-management-essay.php>.

John Rice, NM 2017, Company results: how competition is transforming Australia’s retail sector, viewed 17 september 2017, <https://theconversation.com/company-results-how-competition-is-transforming-australias-retail-sector-72844>.

Keith, S 2012, 'COLES, WOOLWORTHS, AND THE', Locale: The Australasian-Pacific Journal of Regional Food Studies, vol 2, pp. 47-81.

Kumar, P 2016, Responsibility Center: Concept and Types, viewed 15 september 2017, <https://www.yourarticlelibrary.com/accounting/responsibility-accounting/responsibility-center-concept-and-types/62602/>.

Morgan, J 2015, The 5 Types Of Organizational Structures: Part 4, Flatarchies, viewed 20 september 2017, <https://www.forbes.com/sites/jacobmorgan/2015/07/15/the-5-types-of-organizational-structures-part-4-flatarchies/#f61db0f6707c>.

Robinson, J 2008 , Woolworths: the rise and fall of the department store empire, viewed 19 September 2017, <https://www.theguardian.com/business/2008/nov/19/woolworths-retail-department-stores>.

Slezak, M 2017, Woolworths and Coles to phase out single-use plastic bags, viewed 20 september 2017, <https://www.theguardian.com/environment/2017/jul/14/woolworths-to-phase-out-single-use-plastic-bags-over-12-months>.

Vonasek, J 2011, 'Implementing responsibility centre budgeting', Journal of Higher Education Policy and Management , vol 33, no. 5, pp. 497-508.

Wiliams, J, Memery, J, Megicks, P & Morrison, M 2010, 'Ethics and social responsibility in Australian grocery shopping', International Journal of Retail & Distribution Management, vol 38, no. 4, pp. 297-316.

Wolk, A, Dholakia, A & Kreitz, K 2009, 'Building a Performance Measurement System', publication, Design Studio at Monitor, Library of Congress Catalog Number, ISBN, Root Cause , Cambridge.

Writers, AS 2017, Woolworths sets 2020 corporate responsibility strategy, viewed 19 september 2017, <https://www.ausfoodnews.com.au/2017/02/13/woolworths-sets-2020-corporate-responsibility-strategy.html>.

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