Whole Foods Market is one of the largest natural food stores that have been around for a very long time. The organization has continued to expand while diversifying its products through various acquisitions since 1980 when it was first opened. The company boasts of around 176 stores in 11 regions across the United States of America. The organization has grown from just being an ordinary food supermarket chain with the acquisition of processing plants to add value to its products. This paper will describe the organizational structure of Whole Foods Market as well as its general functions and design.
The organizational structure of a company is very important in determining how it carries out its functions. The management of Whole Foods Market prefers to empower its entire workforce through a decentralized organizational structure which is also referred to as the horizontal structure. The management allows decisions to be made by team members at branch level. This system allows all departments and stores to have some autonomy to innovate and come up with new ideas to improve the company. In order to remain relevant and competent in a highly competitive environment, Whole Foods Market has created a culture of innovation and creativity among its employees. Whole Foods Market tries to strike a balance between cost-saving and innovation. There are situations where streamlining is needed for efficiency to be achieved in relation to growth but this has never been an option for Whole Foods Market. A sustainability initiative such as environmental stewardship is the responsibility of every member and not the company’s Board of Directors. Whole Foods Market has got Green Mission Specialists across its regions to ensure its Green Mission goals are achieved.
The decentralized organizational structure used by Whole Foods Market has got a lot of advantages compared to the centralized structure where all decisions are made by the management. To begin with, diversified organizations require a delegated authority and that is why the decentralized system suits Whole Foods Market because of its diversity. Each business has got a unique environment and therefore the decentralized system allows team members in a particular store or region to craft and implement strategies that are suitable for the business. The management and Board of Directors of companies such as Whole Foods Market only deal with corporate issues and strategies instead of dealing with branch issues. In a decentralized system, it is easy to trace the source of profits or losses for the sake of accountability.
Comparing a decentralized structure to a centralized one, there are some shortcomings that Whole Foods Market experiences in the course of its operations. To begin with, a decentralized structure is very costly to maintain since the majority of roles and functions are duplicated at the business unit level. The management of a decentralized structure like that of Whole Foods Market always finds it difficult to point out the decisions that need decentralization and centralization. There is always competition for attention from the corporate level and this competition can sometimes be negative. The management at corporate level is not always aware of what happens at the ground level and sometimes a very serious problem can arise without their knowledge. The other type of organizational structure is the functional structure which focuses more on accomplishing departmental goals rather than organizational goals which is not suitable for an organization such as Whole Foods Market. The most important goal that can be forgotten in a functional organizational structure is the financial goal. This is very possible since the employees are only interested in developing their skills.
The success of Whole Foods Market is attributed to how the company conducts its organizational functions. The organization employs the decentralized system in its operations where internal departments, regions and business units are given autonomy to innovate and make decisions. The general organizational culture and best practices are compulsory to every store. Team work is one of the reasons why Whole Foods Market has continued to enjoy enormous success. Teams are formed on the basis of departments and regions with the whole organization being seen as the major team. The business units are interconnected in a manner that the success of the organization depends on how they perform. All the major functions are decentralized with operations such as recruitment, training, marketing and procurement being conducted at the regional level. The company currently operates in 11 regions with a total of 176 stores. All the Whole Foods Market stores provide a very emotional experience to customers due to their aesthetic arrangement with beautiful merchandising displays that makes it different from other traditional grocery stores.
Whole Foods Market believes that quality customer service is the best way to do marketing. The wonderful experiences that customers enjoy make them the best brand ambassadors for the company when they share their experiences with others. Whole Foods Market has established a very loyal customer base because it trains its customers on healthy living and environmental conservation. Whole Foods Market prices its products according to value and that is why it has continued to remain profitable and competitive over the years. The Human Resources department values team members by ensuring that they are well trained and paid in order to sustain the company’s organizational structure and culture.
There organizational structure adopted by an organization is normally influenced by its organizational design. The geographical design is based on regions where the company establishes stores and branches according to regions. This design requires a decentralized structure for effective management. The functional designs together with departmentalization are necessary in a decentralized structure because they guarantee accountability in performance. The organizational structure of Whole Foods Market is also supported by a design based on marketing channels and customer needs. Since each region has unique needs, it is important to adopt a customer based design. The matrix design which is similar to the hybrid design is a combination of two organizational designs such as customer based and product based in order to meet the unique needs of customers. This design is not suitable for decentralized organizations like Whole Foods Market and is normally used temporarily.
In conclusion, it is important to note that the organizational structure plays a major role in the success or failure of a business. Whole Foods Market is one of the most successful grocery stores in the United States of America despite the few challenges it faces due to its decentralized structure. In order to continue being sustainable, the company should develop strategies aimed at minimizing the shortcomings brought about by its structure and design.