HM2022: Woolworths Australia Structure, Innovation, and Performance

This report provides a comprehensive analysis of Woolworths Australia's organizational structure, examining its impact on management innovation and overall business performance. The report begins with an overview of Woolworths' structure, highlighting its hierarchical and functional characteristics, and its core strategies focused on efficiency and customer service. The discussion delves into how the organizational structure influences management innovation, emphasizing the importance of flexibility and communication. It assesses the effects of the company's structure on business performance, identifying potential limitations such as communication breakdowns and rigid managerial roles. The report concludes with recommendations for improvement, suggesting the adoption of a more flexible structure to enhance innovation, employee engagement, and overall performance. The report uses academic research to support the analysis and recommendations.

Running head: ORGANIZATIONAL STRUCTURE
ORGANIZATIONAL STRUCTURE
Student’s Name
University Name
Author note

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Executive summary
The purpose of this assignment is to analyze structure and the strategies of the selected
organization Woolworths Australia. The report introduces the report with the operational
activities of the organization, the structure of the organization and the core strategies of the
organization. Further, the report analyzes the overall structure, strategies of the organization. It
discusses the impact of the organizational structure on the management innovation and the
overall business performance. Further, the report provides suggestions and recommends ways to
improve the overall business performance and improve the innovation. Lastly, the report
summarizes the main points and concludes the report.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Section 1: Overview of company structure and strategies...........................................................3
Section 2: Impact of organizational structure on management innovation.................................5
Section 3: Impact of company’s structure on overall business performance..............................6
Recommendations and suggestions.................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
Woolworths is the largest supermarket chain in Australia. The largest business
organization works closely with the Australian farmers. The company offers wide range of
superior service to its customers which are of high value and convenience items. The core
business activity of the business organization is to offer upper and middle income group people.
It is the vision of the company to provide high quality products and services to the customers.
The main strategy of the company is to focus on efficiency and cost effectiveness. It is the
sustainable goal of the business organization to grow within the changing social needs and
environmental needs of the business organization (Fan, Wong and Zhang 2013). The purpose of
this report is to analyze the structures and the strategies of the chosen business organization
Woolworths. It discusses the overall structure of the business organization and the strategies. It
analyzes the impact of the organization’s structure on innovations and the overall business
performance. Further, it recommends and suggests ways to improve the performance of the
business organization and its innovation.
Discussion
Section 1: Overview of company structure and strategies
According to Ferguson Pinnuck and Skinner (2016), the structure of the overall business
organization determines the core operational activities of the business organization. The
activities of the organization are mainly retail oriented including the activities and operations of
the e-commerce market. The corporate structure of the business organization limits the ways in
which the company addresses to the various challenges and problems of the business
organization. However, the structural features of the business enable it to effectively implement
the strategies of the company in capturing larger shares in the retail market industry. Woolworths

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has a leading position in the retail market industry (Friesen et al. 2014). The strategies of the
business organization help the organization to grow and expand in the international market. The
structure of the organization and its strategies enables the business organization to maintain a
competitive advantage in the market.
As mentioned by Furr and Dyer (2014), the business organization follows a hierarchical
functional organizational structure; it is more function based and has hierarchy features. It
implies that there are vertical lines of command and authority in the business organization. Every
employee in the business organization has a direct superior. The top level managers and the
supervisors of the business organization direct the lower level employees and delegates
responsibilities through the middle level managers in the Woolworths stores (Guadalupe, Li and
Wulf 2013). The corporate structures of the company consist of group of employees delegated
with specific functions and responsibility. For example, Woolworths has been department human
resource department for managing the other employees. The company has different department
for information technology and the functions for marketing. The entire organization and its
departments are function based. In the opinion of Janićijević (2013), the hierarchical functional
structure of the business organization helps the managerial levels to influence the entire business
organization. The new strategies, goals and objectives formulated by the upper level
management are passed on to the lower level employees and the executives. This structure
ensures effective control and monitoring in the business organization.
However, according to Jones (2013), there is certain limitation in the overall
organizational structure, it limits flexibility in the organization and it cannot be adjusted easily to
the changes and its business activities. There is an ineffective flow of communication due to

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lengthy communication flow from the top level of employees to the lower level of employees in
the business organization.
The main strategy of the organization is to offer high quality service to the customers of
the business organizations, strive for excellence and take action towards integrity. Further it is
the culture of the business organization to respect all the employees in the organization and strive
for excellence in the performance of all the employees in the organization, the individual
workers, teams and the departments (Knox 2015). The company also takes action towards
integrity and honest dealings with the customers and the employees of the organization.
Therefore it promotes virtues of fairness, honesty and impartiality in the decision making
process. Further, Woolworth’s group is considered to be one of the most innovation retailers in
the Australian market and the strategies of the organization enable the organization to gain top
most position in the market (Liu and Moskvina 2016). However, as mentioned by Richards et al.
(2013), due to increased levels of competition in the market, the strategies of the organization
need to be revised in order to maintain its competitiveness.
Section 2: Impact of organizational structure on management innovation
Innovation in the business organization is considered to be an important source for
business growth and expansion. It is one of the key imperatives through direct control in the
business structure of the organization have the power to influence innovation within the
company (Fan, Wong and Zhang 2013). The strict hierarchy in the business organization enables
the top level management to perform the business activities as per their best knowledge.
However, this restricts flexibility therefore, it needs to change the structure of the organization to
some extent to pursue new strategies and implement change in the business organization. In
order to implement innovation in the organization, the organization has to implement new

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technologies and utilize inventive resources (Ferguson Pinnuck and Skinner 2016). This can
present complex opportunities and challenges in the business organization. Therefore, the
organizational structures and the technological innovations in the organization are intertwined.
According to Friesen et al. (2014), innovation can be considered as implementation of new
structures, new policies and management processes in the business organization. As per the
literature it has been analyzes the hierarchy of authority might lead to conflicts of interest among
the employees which ultimately affects the proper implementation of innovation in the
organization. Flexibility is highly essential for implementing innovation in the business
organization. Therefore it can be said that in order to implement quick change and implement
innovation in the business organization, the managers and the leaders must ensure a dynamic
business environment and support idea generation among the employees. Having a flat structure
in the organization will enable the employees in the organization to take decisions and solve the
organizational challenges and problems (Furr and Dyer 2014). For example, Google’s flat
structure delegates responsibility to the employees to undertake new ideas and innovative
solutions in the organization. Having a flexible environment in the business organization allows
the employees and the team members to collect information and increase the depth of the
knowledge (Janićijević 2013). This will ensure effective implementation of innovation in the
organization.
Section 3: Impact of company’s structure on overall business performance
The hierarchical structure of the organization creates various levels of communication in
the business organization. The organizational structure can directly affect the performance and
the productivity of the business organization (Jones 2013). Having weak and incompetent
managerial levels in the organization can impact the level of performance in the organization.

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Inadequate and lack of prompt managerial decisions in the organization can reduce the
performance and productivity of the business organization. In contrast efficient and effective
managerial decisions in the organization can enhance the performance and productivity of the
business organization as well as increase the overall efficiency of the business organization (Liu
and Moskvina 2016). Specifically, Woolworth’s inflexible managerial structure causes
breakdown in communications which slows down the efficiency of the business organization.
The lower level employees execute the managerial decisions taken by the senior level managers
of the business organization; this restricts creativity and impacts productivity. A weak internal
structure of the business organization can affect the efficiency level of the business organization.
The corporate structure of the business organization can therefore maintain corporate
productivity during growth and expansion. As mentioned by Richards et al. (2013), the
hierarchical structure of the organization discourages employee collaboration and information
sharing throughout the vertical lines of report structure. In order to ensure responsive and
innovation in the business organization, it requires flexible environment.
The hierarchical structures of the business organization are considered to be slow and
bureaucratic. The organizational structure effects o the performance of the business organization
(Friesen et al. 2014). The employees of the business organization are comparatively less
enthusiastic for the work activities and operations which impact the overall performance of the
business organization. Therefore, in order to ensure commitment and creativity in the
organization, it must flatten the management levels and encourage the employees to undertake
risks and employee new opportunities of performing the work (Furr and Dyer 2014). This can
enhance the motivation levels of the employees. The centralized decision making in the
organization makes the job roles highly rigid and it discourages the employees from creativity

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and innovation. This impacts the performance and decreases the performance levels of the
employees.
Different business structures affect the organizational performance and productivity in
different way (Guadalupe, Li and Wulf 2013). As per literature, there is a direct cause and effect
relation between the structure of the organization and its effect on the performance and
productivity of the business organization. For example, having a flat structure in the organization
ensures creativity and influence innovation in the business organization (Guadalupe, Li and Wulf
2013). This is highly motivating as the employees are self directed rather than given command
and provide direction. The organizations with rigid and precisely defined work activity can
reduce the creativity levels of the employees, which in turn hampers the overall performance and
productivity of the business organization. Therefore studies suggest that organizational structure
play a huge role in influencing the attitudes of the employees and their commitment in
performing the business operations.
Recommendations and suggestions
The organizational structure is ideal for the business operations and activities performed
and its global scope of operations. However, as mentioned by Jones (2013), Woolworths can
improve the structure of the organization and incorporate changes in the operational activities.
This can enhance the productivity and initiate innovation in the organization. It has been
analyzed that the managerial controls are maximum in the hierarchical structure of the business
organization. The company can considered incorporating a flexible working environment in the
organization. According to Knox (2015), in order to ensure creativity and commitment among

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the employees, the organization must consider flattening the structure and encouraging the
employees to undertake changes and innovation. This might motivate the employees in the
organization thereby ensuring productivity and performance in the business organization.
Moreover new ideas and innovation from the employees are critical for the success of any
business organization (Guadalupe, Li and Wulf 2013). Therefore, new ideas and influx of
employees must be considered by the organization. It has been analyzed that hierarchical
structure in the business organization gives rise of bureaucracy which hampers the productivity
and performance of the business organization (Richards et al. 2013). As per research and
analysis, it has been identified that weak internal structure, lack of effective communication and
channels in the organization can disrupt the smooth functioning of the business organization.
Therefore, it is recommended that Woolworths must incorporate a strong corporate structure
which will help the organization to grow and maintain corporate productivity. Further, structural
improvements in the organziation are essential for the organization to grow and expand. As
mentioned by Tran and Tian (2013), it has been analyzes that there are certain flaws and
limitations in the business organization which leads to breakdown of communication. Therefore,
it is suggested to ensure effective communication in the business organization and facilitate
efficiency in the organization.
Conclusion
Therefore, from the above analysis it has been identifies that Woolworths limited follows
a hierarchical structural with vertical line of command. This structure of the organization helps
the organization to carry out its business organizations in a smooth manner. However, it has been
analyzed that there are certain limitations in the structure and the operational activities of the

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organization. The hierarchical structure of the organization restricts effective communication as
the flow of communication is long. Further, the lower level employees or the executives of the
business organization have limited say in the managerial decisions taken by the business
organization. This affects the motivation level of the employees. Further, it restricts innovation
and change in the business organization. The report has recommended ways to improve the
overall efficiency of the business organization and improve on innovation.

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References
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state-owned corporate pyramids. The Journal of Law, Economics, and Organization, 29(6),
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Ferguson, C., Pinnuck, M. and Skinner, D., 2016. The evolution of audit market structure and the
emergence of the Big 4: Evidence from Australia. Chicago Booth Research Paper, (14-13).
Friesen, J.P., Kay, A.C., Eibach, R.P. and Galinsky, A.D., 2014. Seeking structure in social
organization: Compensatory control and the psychological advantages of hierarchy. Journal of
Personality and Social Psychology, 106(4), p.590.
Furr, N.R. and Dyer, J., 2014. The Innovator's Method: Bringing the Lean Start-Up Into Your
Organization. Harvard Business Press.
Guadalupe, M., Li, H. and Wulf, J., 2013. Who lives in the C-suite? Organizational structure and
the division of labor in top management. Management Science, 60(4), pp.824-844.
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Richards, C., Bjørkhaug, H., Lawrence, G. and Hickman, E., 2013. Retailer-driven agricultural
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values, 30(2), pp.235-245.
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firm. American Journal of Industrial and Business Management, 3(2), p.229.
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