Woolworths: Organizational Structure, Responsibility, and Rewards

This report provides a comprehensive analysis of Woolworths, an Australian supermarket chain, examining its organizational structure, which is decentralized and flatter, with various divisions. It delves into the company's responsibility centers, including cost, revenue, profit, and investment centers, highlighting their roles in the company's operations. The report also assesses Woolworths' environmental responsibility, detailing its efforts in diversity, circular economy, carbon footprint reduction, and the phasing out of plastic bags. Furthermore, it explores the company's performance measurement and reward systems, including fixed salaries, variable pays, career opportunities, and various incentives to motivate employees. The analysis concludes by emphasizing Woolworths' commitment to social and environmental responsibility and its well-defined organizational structure, which contributes to its success.

Woolsworth, Australia
Introduction
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
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.
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)”.

Degree of Decentralization
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.

Types of Responsibility Centres in Woolsworth
“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.
Woolsworth has the following responsibility centres-
1) 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.
2) 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.
3) 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.
4) 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.
Environmental Responsibility of Woolsworth
“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.
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.
Reward system and Performance Measurement
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.
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.
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