Organizational Structure Paper

Organizational Structure Paper

Margaret Viens

MGT/230

March 3, 2014

Raymond Thompson

Organizational Structure Paper

I am an employee of Macy’s, and have always been fascinated with the history and how the business runs. Macy’s began as a small dry goods store and has grown into a multi million dollar business making it the largest department store in the world.

History

In 1858, Rowland Macy opened R.H. Macy & Co., a dry goods store in New York City. The symbol he chose to be his logo is a red star that symbolizes a tatoo he got while in the navy. The first day he opened his sales were $11.06, a year later his sales would be over $80,000. Today a Macy’s store can make that in one day.

Macy was a pioneer in the retail business always changing the way retail business ran. He was always the first one to try something sometimes shocking the retail business world. One such shocking move was when he promoted a woman into an executive position, which was unheard of in retail. Some of Macy’s other firsts included the tea bag, the Idaho baked potato, colored bath towels, and he held a liquor license (Macy's History, 2014) The Macy’s Herald Square store is known as the “World’s largest store” according to Macy’s history.

1994 brought changes to Macy’s when Federated Department Stores (FDS) acquired R.H. Macy’s & Co becoming Macy’s Inc. One year later FDS acquired over 46 other stores making them and giving them the Macy’s name. Today Macy’s operates with Bloomingdale’s with over 840 stores coast to coast and including Puerto Rico, District of Columbia, Hawaii, and Guam.

Macy’s in 2009 went through a major organizational restructure. According to Terry Lundgreen, chairman, president, and CEO said, “the restructuring would make Macy’s a more lean, and efficient stronger company” (Tode, 2009). Before this restructuring Macy’s Central, Macy’s Florida, Macy’s West, and Macy’s East each handled their own buying, merchandising, marketing, human resources, and information technology individually. This made for a very confusing organization. Once the restructuring would be complete there would be one organization for each function. The goal is to create an unified marketing organization (Tode, 2009).

Macy’s will now have 69 districts with eight regions in each district. This was done to satisfy consumer demands. Macy’s would have a new executive management team. Another retail store that would also have a major restructuring would be JCPenneys. JCPenney’s is attempting to move forward in gearing towards the younger customer (Company News, 2012). JCPenney has a smaller organizational structure and has a CMO who oversees 38 main executives in nine divisions.

Macy’s has traditionally been known to be more functional, but through research they seem to have a matrix type organization. Along with Bloomingdales they have their Geographic divisions, Bloomingdales is also overseas. Macy’s divisions are East, Florida, Midwest, North, Northwest, South, West, and macys.com. Looking at their organizational chart there are chairman, executives, directors, managers that overlap into other divisions.

The CEO oversees all divisions and those divisions each have their own they overlook.

In January of 2014 Macy’s announced another organizational restructuring. There would be regions and districts combining reducing districts and some regions. Some positions would be eliminated such as the department I work in the merchandise planning team in the home store would be eliminated. The reasoning is home does not have as many changes as other departments such as apparel. It was announced that five stores would be closing and there would be eight new stores (Macy's Inc. Pressroom, 2014). As an employee, I am seeing changes that we were told would not affect our store, such as shuffling of positions, people getting let go, and many other changes not being made to the public.

Organizational Designs

The store which I work in has a functional, divisional, and matrix subdivisions that are also organized into smaller units.

Functional Division

The functional area is every manager whether it is a department or position is their area of expertise. The home manager is knowledgeable in every part of the home store including textiles, cookware, electronics, and the gift