Nordstrom
...nger organization. Inability to look at itself constructively will destroy the success it has already achieved. Deterrents to Expansion Unwillingness to grow beyond its current structure Belief that a Nordstrom store isn't Nordstrom unless a family member is present. Keeping a 'Mom and Pop' type management in that 'The 5' Nordstrom family members review all of the daily workings of the company in great detail through reporting and meetings. Not looking at outside forces that could deter its success Not understanding local labor laws resulted in lawsuits by union employees (Weston, 9-191-002) Understanding the labor market available in areas of expansion. Current practice is to only promote from within. Market analysis to determine feasibility in growth area. In the California store, the store manager used the Seattle markup even though it was lower than the market would tolerate. Inefficient organizational chart Organizational chart has numerous variations within stores and departments. Inconsistencies in design include four regions with three regional managers where all but one reported to 'the 5', but yet if the store manager had a question they would by pass their regional manager and go to 'the 5'. Inefficient buying strategies caused by organizational design. 'The five' each maintain various departments, with varying buying structures. For example men's clothing buying is centralized in one location, but Women's Ready to Wear has 5 subsets with 10 buyers. (Parpia, 27) Inefficient inventory structure that slows down the marketing process in that some locations are short items when promotional material is created. Inconsistency in regards to staff pay and work issues A pay structure that encourages staff to work 'off the clock' to maintain a high sales per hour figure. Turnover rate of 50% of permanent workers attributed to firings. (Parpia, p.7) Ability to keep the Nordstrom image within new regions. The California store had a current employee, who recruited current employees to move to the new location. Strategic Recommendations Lessen dependency on 'the 5' in non-crucial decision making by giving final authority to different levels of management. To expand, Nordstrom management must carefully review the new market. Review of the competition, consumer demand and the potential work force are key to its ability to succeed. Addition of a personnel department and legal staff to review and implement local labor laws will lessen potential employee issues regarding pay and hours worked. Redesign the organizational structure to define management roles and responsibilities by dividing the company by function instead of product line. Create a reporting mechanism that defines the level responsible for reporting on personnel, inventory, profits etc. Design a regional buying structure that can meet local desires that consists of a few specialized buyers for product lines. This will allow the company better buying power when ordering large quantities from consistently used vendors. Introduce centralized inventory system to control stock issues as well as allow for efficient marketing. C...