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Organizational Structure: Nordstrom

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Submitted By saviluna
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Organizational Structure
MGT/230
October 8, 2012 Organizational Structure Nordstrom Incorporated has a history that dates back to 1901, when John W. Nordstrom and Carl Wallin joined forces and opened the first Wallin & Nordstrom, Inc. They opened their first shoe store in downtown Seattle, Washington, and found that they needed to look for new and innovative ways for their company’s growth. They ventured into the clothing market and started selling fine apparel and added men’s clothing and children’s wear to expand the needs of their customers. In 1971 they went public, and the company was recognized as the largest-volume West Coast fashion specialty store, and the company name was formally changed to Nordstrom, Inc. From the beginning, John Nordstrom shared a business philosophy that was exceptional service, selection, quality, and value. Today the philosophy remains the same (“Nordstrom.com,” n.d.). The vertical structure is very apparent in the Nordstrom, Inc. organization. The company has key executives, board members, and executive key committees that run the organization. According to Bateman & Snell, (2011), corporate governance is a role of the corporation’s executive staff and board of directors in ensuring that the organizations activities meet the goals of the stakeholders. The board of directors’ selects, advises, and oversees management and is responsible for the day-to-day operations of the company. Although Nordstrom, Inc. is a vertical organization, its structure is quite unique and interesting. Their structure reflects outstanding service every day, one customer at a time (“Nordstrom.com,”n.d.). The Inverted Pyramid represents their philosophy and structure and reminds the executives to value those closest with their valued customers. Retrieved from: HTTP://ABOUT.NORDSTROM.COM/CAREERS/STRUCTURE.ASP
According to Timberlake (2011), Nordstrom it seems is the rarity in American Business, and enterprise run by a founding family that has not wrecked it. Nordstrom’s claim to fame has been customer service, and they break up the departments by lifestyles. Where other organizations such as Bloomingdale’s and Neiman Marcus do portray a vertical organization as well, their structures are not run in the same manner. Bloomingdales originated because of a fad, the hoop skirt in the late 1800s. It is believed that in the late 1800s most fashion retailers specialized in one type of garment (“Bloomingdale’s,”n.d.). Bloomingdale’s also expanded and sold a wide variety of European fashions. They became quite famous because of their marketing ploy, or flexing market muscle, along with hosting gala event and fashion shows. Shopping at Bloomingdale’s became a trend by the late 1970s. People went to Bloomingdale’s to see and to be seen, and it became a way of life for the affluent. Neiman Marcus, similar to Bloomingdale’s, also catered, and continues to cater to the affluent. The company also shares a vertical vision for its organization, but they strive on the commitment to extravagance. They were forced to lower prices to their merchandise during the 1930s and 1940s Great Depression; however, the main goal was to continue to attract wealthy customers. In the 1980s the store was restructured and publicly traded as The Neiman Marcus Group, Inc. After the restructure, the store took a different approach and started to attract new, younger customers while maintaining its upscale clientele (“Fundinguniverse,” n.d). There is a reason that Nordstrom remains one of the 100 Best Companies to Work For, ranked 74 from the top 100 after years in the industry says a large amount about an organization (CNNMONEY, A Service Of CNN, Fortune And Money, 2011). Nordstrom prides itself on its culture. The enthusiasm of the sales force for customer service makes the difference. The Nordstrom family is still actively involved in the business, and they continue the tradition that was created years ago. When a team member is hired to work for Nordstrom, there is one rule to follow, and that is “Use good judgment in all situations” ("Nordstrom.com,"n.d.). At Nordstrom, an employee determines his or her own success, and he or she is encouraged to set high goals for him or herself, and the success of the company. The sales force is also given the power to give suggestions, try something new and take the initiative to deliver exceptional customer service. Nordstrom also brings diversity into their workforce; they represent many backgrounds, and committed to cultivating an environment in which the contributions of employees, customers, and vendors are respected. They offer employment promotions, training, marketing, and advertising, and recognize the value of people who drive results, and reward outstanding performance. Marketing is a key component to the sales success of Nordstrom, Inc., and they do this by advertising via the Internet, monthly mailed and e-mailed catalogues to their existing customers as well as offer a no questions asked return policy. They also offer points with customers through a loyalty program. For every dollar the customer spends, the customer accumulates points and get perks from the organization in return. They offer special days and promotions that allow customers to earn triple points to obtain and redeem point perks even faster (Miller, 2012). What says even more about the organization itself is Nordstrom salespeople stick around for many years. Nordstrom is an organization that prefers to promote within. They also stay competitive in their market. They have set up a tracking system that links to all their locations allowing their staff to track down a specific item if it is not found in the store and offer free shipping to their residence or choice of location (Timberlake, 2011). They have not increased their numbers in inventory, but increased their numbers in sales. The newest feature the store has introduced is the mobile check out. This feature allows sales associates to spend more time with their customers on the floor by giving them an iPod touch to look up past purchases as well as giving them the luxury of checking out on the spot, and they are given the option of a printed receipt or have it e-mailed ("Insidefmm," 2012). Nordstrom today has continued to serve its customers with the same mindset of offering the customer the best service, selection, quality, and value. They have continued to do so in all their Nordstrom locations as well as the Nordstrom Rack locations that offer discounted prices on last season’s inventory. They have also expanded abroad and opened stores in Canada, which show success and results in sales. My experience as a valued customer with Nordstrom made my choice easy to write about Nordstrom’s organizational structure. I believe in their philosophy as well as believe that I am getting the best value and can return products without any questions asked if I am unhappy with what I have purchased. There are other stores such as Bloomingdale’s and Neiman Marcus who emulate Nordstrom, but they do not cater to all levels of clientele and in that Nordstrom excels as a fashion specialty store that specializes and caters to customers individual needs and lifestyles.

References
Bateman, T.S., & Snell, S.A. (2011).Management: Leading & Collaborating in a competitive world (9th ed.). New York, NY McGraw-Hill Irwin.

Bloomberg Businessweek. (n.d.). Retrieved from http://investing.businessweek.com/research/stocks/people/people.asp?ticker=JWN

Bloomingdale's. (n.d.). Retrieved from http://www1.blommingdales.com/media/about/history.jsp

CNNMoney, a Service of CNN, Fortune and Money. (2011). Retrieved from http://money.cnn.com/magazines/fortune/bestcompanies/2011/index.html Fundinguniverse. (n.d.). Retrieved from http://www.fundinguniverse.com/company-histories/the- neiman-marcus-group-inc-history/

InSideFMM. (2012). Retrieved from http://insidefmm.com/2011/06/nordstrom-mobile- marketing-strategy/
Miller, P. (2012, January). Nordstrom Scores Points with Shoppers. St. Louis Business Journal ,
(). Retrieved from http://www.bizjournals.com/stlouis/blog/2012/01/nordstrom- scores-points-with-shoppers.html Nordstrom.com. (n.d.). Retrieved from http://about.nordstrom.com/careers/culture.asp
Nordstrom.com. (n.d.). Retrieved from http://shop.nordstrom.com/c/company-history
Nordstrom.com. (n.d.). Retrieved from http://about.nordstrom.com/careers/structure.asp
Timberlake, C. (2011, August). How Nordstrom Bests Its Retail Rivals. Bloomberg Businessweek Magazine, ().
Retrieved from:http://www.businessweek.com/magazine/how-norstrom-bests-its-retail- rivals-08112011.html

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