Organizational Structure and Effectiveness of Woolworths: A Report

This report provides an in-depth analysis of the organizational structure of Woolworths, a major Australian supermarket chain. It identifies Woolworths' bureaucratic hierarchical structure and its impact on the company's growth and profitability, highlighting both the advantages and disadvantages of this structure. The report examines the influence of this structure on management innovations, such as the self-checkout system, and its effects on employee morale and customer experience. Furthermore, it assesses the impact of the organizational structure on the overall business performance, including financial metrics and operational efficiency. The report offers detailed recommendations for Woolworths to improve its organizational effectiveness, including suggestions for empowering employees, fostering flexibility, building trust, and creating an inclusive work environment with shared goals. The recommendations aim to enhance Woolworths' competitiveness in the market by promoting a more adaptable and employee-centric approach to organizational structure.

Running head: ORGANIZATIONAL STRUCTURE AND EFFECTIVENESS
Organizational Structure and Effectiveness
Name of the Student
Name of the University
Author note

1ORGANIZATIONAL STRUCTURE AND EFFECTIVENESS
Executive Summary
The report has helped in analyzing the organizational structure of Woolworths in the
competitive environment of business. It has been noticed that the company has been
following the bureaucratic hierarchical organizational structure which has been impacting the
growth as well as profitability of the company negatively. In addition, the management
innovation such as self-check out system has been suitable for improving the experience of
customers, however it affected the morale of the employees negatively. In addition, there are
different kinds of negative impact on performance of the company that has affected their
morale negatively, Lastly, the recommendations have been provided which will be suitable
for improving the growth prospects.

2ORGANIZATIONAL STRUCTURE AND EFFECTIVENESS
Table of Contents
Introduction and Overview of Woolworths...............................................................................3
Section 1: Overview of the Organizational Structure of Woolworths, strategies and possible
Reasons......................................................................................................................................3
Organizational Structure of Woolworths...............................................................................3
Strategies of Woolworths.......................................................................................................4
Section 2: Impact of The Company’s Structure on Management Innovation............................5
Section 3: Impact of The Company’s Structure on Overall Business Performance..................6
Recommendations for Woolworths............................................................................................7
Conclusion..................................................................................................................................9
References................................................................................................................................11

3ORGANIZATIONAL STRUCTURE AND EFFECTIVENESS
Introduction and Overview of Woolworths
As commented by Ahmady, Mehrpour and Nikooravesh (2016), the organizational
structure helps in providing proper guidance to the different employees through laying out
official reporting type of relationships which is suitable in governing the work flow of the
organization. It assists in clarifying the relationship as well as lines of authority which best
suits the company. The report assists in analyzing the organizational structure of Woolworths
Company which is situated in Australia. In addition, the impact of the organizational
structure on the management innovation is required to be identified as well as on the overall
performance of the business effectively.
Woolworths Supermarket is one of the Australian supermarket or grocery store which
has been owned by Woolworths Group. The company was incorporated in the year 1924 and
both Coles and Woolworths form proper near-duopoly of the Australian market which
accounts to more than 80% of the Australian supermarket (Woolworths.com.au 2019). It
mainly specializes in selling the different kinds of groceries such as vegetables, health and
beauty care products and it operates in more than 1000 stores across Australia and in other
countries such as 995 other locations. The revenue has increased to A$56.726 billion till the
year 2018 and the number of employees is 115000.
Section 1: Overview of the Organizational Structure of Woolworths, strategies and
possible Reasons
Organizational Structure of Woolworths
Woolworths started their business in the year 1924 as the entrepreneur and small
subjugated company with modest type of structure under the name of Woolworths
Stupendous Bargain Basement in Australia. However, in the future, Woolworths was

4ORGANIZATIONAL STRUCTURE AND EFFECTIVENESS
successful in growing and it became the chain of the stores all over the country. There was
proper diversification of portfolio of the different products such as from food items to liquor,
electronics, homewares along with furniture. The success has been achieved through organic
type of growth as well as acquisitions of major players in market (Woolworths.com.au 2019).
Figure 1: Conglomerate Divisional Organization Structure of Woolworths
(Source: Woolworths.com.au 2019)
Therefore, due to the offering of the different unrelated products to the audiences in
the market, it is following the Conglomerate Bureaucratic Organization Structure as it
operates in various divisions. The three major divisions include: Woolworths South Africa
which is based in South Africa, New Zealand and Australia. The particular structure provides
the company with proper flexibility along with speed as well as adaptability for facing as well
as mitigating dynamic business environment which helps in building ambidextrous company.
In the respective structure, the managing director helps in controlling directors of the
different departments and the system is more like hierarchy system wherein the rules and
regulations are followed in a strict manner (Bustinza et al. 2015).

5ORGANIZATIONAL STRUCTURE AND EFFECTIVENESS
Strategies of Woolworths
The different business strategies of Woolworths include the following:
Customer Oriented Business- It is the major strategy of Woolworths which is related
to providing the products as well as services for satisfying needs of customers. As to provide
high satisfaction to customers, the company needs to analyze the shopping habits of
customers and Woolworths have done the similar thing for easy access.
Availability and Low-Cost-Related Strategy- Woolworths have tried to lower the
prices of different products for obtaining major market share and attract strong base of
customers. Woolworths mainly emphasize on product availability as to obtain major share in
market and retain such customers (Benzer et al. 2017).
Dominance Related to Product- It is the other aspect wherein the company is
dominating the entire market through providing customers with wide range of products and
services under one roof. Woolworths is considered to be the leader in the entire market as
they have introduced clothing, groceries, footwear as well as other accessories to have major
access in the market (Bleiklie, Enders and Lepori, 2015).
These are the different strategies which have been adopted by Woolworths for
increasing their market share and gain profitability in the entire competitive business
environment. The customer satisfaction and the business which is customer oriented in nature
are the two major prospects that enhances their business growth. The management of the
company Woolworths try to deepen their understanding regarding the needs of the customers
which provided them with the brief outline of the implementation of loyalty programs which
will be meeting the various requirements of customers suitably.

6ORGANIZATIONAL STRUCTURE AND EFFECTIVENESS
Section 2: Impact of The Company’s Structure on Management Innovation
Due to the hierarchical bureaucratic organization structure which is being followed by
Woolworths, it can be seen that there has been lack of teamwork and flexibility in the
decision-making process (El Talla et al. 2018). For instance- While introducing the “Self-
Check-Out System”, at Woolworths, it can be seen that the change and the innovation was
introduced by the management of the company, there was no such information provided to
the different employees regarding the same and it affected their morale (News.com.au 2019).
Due to such kind of issues faced by the middle and lower level management, it led to
resistance to change among employees. The managing director was solely responsible for
incorporating the change without any information provided to the employees that led to
differences in opinions.
From the respective instance, it can be seen that the bureaucratic structure of
organization has been effective in meeting the demands of customers and it was suitable in
gaining competitive advantage in the market which led to the positive management
innovation. However, on the other hand, there was a negative aspect of the hierarchical
bureaucratic organizational structure wherein there was no involvement of employees and
due to the implementation of management innovation, there was huge turnover among
employees (Islam, Jasimuddin and Hasan 2015).
Due to the hierarchical bureaucratic organizational structure of Woolworths, there
was no freedom provided to the different employees which affected their growth of the
employees. The formalization of the organization refers to the degree of the role specificity
that did not include any kind of delegation of tasks and there was no involvement of the
different team members in managing the innovation (Johnson and Szamosi 2018).

7ORGANIZATIONAL STRUCTURE AND EFFECTIVENESS
Section 3: Impact of The Company’s Structure on Overall Business Performance
Woolworths have included the conglomerate bureaucratic organizational structure
which has helped them in becoming effective logistically. The bureaucratic organizational
structure is organized in nature with high level of formality in the way it operates
successfully. The respective structure has strong boundaries wherein the chain of command is
clear as the expectations along with decision-making power (Kiron et al. 2016). There is
centralization of authority at Woolworths and it helps them in maintaining structure
systematically. However, on the contrary, the repetitive jobs are creating boredom for the
different employees which has been breeding dissatisfaction and it led to low morale of the
employees.
Additionally, Woolworths pursue a single goal as the unified team which led to
disunity among the different individuals working in the company and affected the
effectiveness of the company negatively. Furthermore, there has been high level of barriers
related to communication which created trouble in achieving the organizational goals
successfully (Madi et al. 2018). Woolworths follow the traditional organizational structure
that lacks proper level of flexibility. The respective company does not tend to adapt to the
changing needs as they are slow in inhibiting changes (O'Neill, Beauvais and Scholl 2016).
The respective problem can affect the organization and due to the same, it has led to low level
of efficiency in managing their operations in contrast to other competitors present in market.
Therefore, from the above, it can be identified that these are the major pros and cons
of the divisional structure of Woolworths and it has affected the company in both positive
and negative manner. In such scenario, Woolworths has faced huge decline in the revenues
and profitability and functioning has been different in various locations. Woolworths needs to
align the entire organization to work towards similar goals as well as objectives of the
company that will be enhancing reputation of company.

8ORGANIZATIONAL STRUCTURE AND EFFECTIVENESS
Recommendations for Woolworths
In order to improve the efficiency of the organizational structure of Woolworths in
contrast to the other competitors in the market, there are various recommendations which can
be incorporated by Woolworths for improving their effectiveness and gain competitiveness in
the market in a positive manner. The bureaucratic organizational structure has affected
morale of employees negatively and there has been lack of flexibility that has affected the
growth of the company negatively. Woolworths has declined rate of profitability in the
market and due to which it has affected the growth of the firm in comparison to other
competitors such as Coles which follows the flexible structure.
The managing director of the company needs to provide ownership to the different
employees working in the company as they are the part of the company. Ownership occurs
within the structure of the company and when the ownership is not being shared it is not
empowering. The empowerment among the employees is making the entire team accountable
for their decisions and actions (Ravanfar 2015). The management needs to generate
flexibility through delegating the tasks among employees which will be suitable for
increasing their effectiveness.
The building of the trust is the second most essential element that needs to be
incorporated by Woolworths by improving the structure wherein all the employees will have
the power to take part in process of decision-making which will be suitable for the success of
company (Santoro et al. 2018). The organizational structure of Woolworths should be
providing inclusive environment which is inclusive with common goals as the sense of
community will be developed that will make the employees work towards achieving goals
and helps in successful pursuit of the respective shared goals (Strese et al. 2016).

9ORGANIZATIONAL STRUCTURE AND EFFECTIVENESS
The top-down organizational structure hinders the growth of the company and ability
of decision-making effectiveness at lowest level possible. In order to improve the respective
scenario, the flat organizational structure will be allowing the different employees at different
levels of the company to be empowered and it will be providing them with the ability to give
autonomy over the work which is being performed by them (Scarbrough, Robertson and
Swan 2015). The less rigid kind of structure will be effective in allowing flexibility and
promote feeling of inclusiveness and equality.
From the above recommendations, it can be seen that the flexibility and the sense of
inclusiveness are the two major elements which are lacking in the current organizational
structure of Woolworths. In order to improve their performance and growth in the
competitive business environment, Woolworths can be able to provide the inclusive working
environment with common goals along with proper sense of unity that will be developed
which will be suitable for generating effectiveness. In order to compete in the competitive
business environment, there are various kinds of aspects which needs to be managed by them
such as building of trust among the employees for communicating the different flow of
information suitably without any issues. The delegation of the tasks can be effective in
supporting the role to the different decisions which will be generating various ideas as it will
be efficient in growth of the business in disparity to other companies such as Coles which is
the major competitor.
Conclusion
Hence, it can be concluded that structural aspects of the company play a vital role in
refining the development of the business suitably. Organizational structure is effective in
providing proper guidance to the different employees by laying the official reporting
relationships which will be helpful in governing the flow of the tasks at Woolworths. In case

10ORGANIZATIONAL STRUCTURE AND EFFECTIVENESS
of Woolworths, it has been noticed that the hierarchical bureaucratic structure has been
followed that has affected the flexibility of the decision-making in an undesirable way. It can
be seen that the employees and the middle level managers need to be included in process of
decision-making and the tasks are required to be delegated which will be appropriate for the
success of the company in comparison to Coles and other contestants present in the market.
In addition, it has been noticed that due to inflexible team management and no delegation of
the tasks among the employees, the management innovation was not successful in terms of
the internal management structure. There was high level of turnover among employees and as
to improve the situation, there should be inclusion of flat organizational structure which will
be leveraging the viewpoints of employees and employer together for developing more
suitable idea.

11ORGANIZATIONAL STRUCTURE AND EFFECTIVENESS
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