Instructor: David Schuff, Section 003


How the Zara Effect is changing the Organizational Structure of Luxury Brands

Zara, a Spain-based fast fashion company, has dramatically disrupted the way luxury brands operate. Fast fashion brands like Zara and HM operate in a much more agile manner compared to traditional designer fashion brands, who typically have a very silo-ed structure. “Zara effect” is a concept used by those in the fashion industry describes the tendency of customers to check back in more regularly for new product, which has increased the pace of the current trend cycle. The agile structure of Zara means the company can more quickly produce fashion goods that meet customer needs and desires. Luxury brands are restructuring to better use customer data and become more adaptable, modeling after start-ups. High end brands are also investing in tools like AI software and other data-parsing technology. Luxury brands have prime opportunity to adjust their organizational structure due to their creative industry.


gucci photo

Photo by pbr10021


Organizational Structure at Microsoft

Microsoft Organizational Structure

Microsoft’s organizational structure is classified as divisional. It’s broken down into two divisions: engineering and business. One advantage the arises from this is the elimination of bureaucracy in the business processes which grants more flexibility. This organizational restructuring took place in 2016 and resulted in the elimination of 7,400 jobs resulting in cost savings for Microsoft.  Another advantage is that the specific divisions can specialize in the tasks they perform resulting in greater levels of efficiency. By breaking apart the products into different independent and self-sustaining sections allows Microsoft to create great products and innovate using their core competencies. Product innovation is highly encouraged as well as the implementation of features that can help the end consumer. While Microsoft has not been creating groundbreaking innovation, they support systems that great majority of the world use every day. A disadvantage that comes with this new structure is that there is a greater separation between the technical and business employees. Additionally, because each division functions independently, they need a competent manager that understands the product or service offering for the division well.  What other advantages or disadvantages do you see from this structure? Is there anything Microsoft can do to improve?

View the source here.

Netflix and Chill…Organizational Structure


Netflix is well known for its flat, organizational circle structure. Employees are given more freedom and responsibility than those at other companies, which is evidenced by the unlimited vacation days and lenient expense account policy. Netflix avoids top-down decision making and seeking management approval for everything. These practices are characteristic of a traditional bureaucratic organizational structure. Instead, the company values high employee performance and excellent work. The company believes that in order for employees to perform well, they should be given the freedom to make their own decisions and dictate their schedules. Even though the company may be less rigid about certain policies, the work environment at Netflix is not as “chill” as one might expect. According to Netflix’s former Chief Talent Officer, Patty McCord, the culture is “intense” and there is a lot of “pressure” (View the Source Here). Employees are expected to perform at an exceptionally high level. Managers are required to periodically perform a keeper test. For this test, the manager imagines that one of their team members is thinking about leaving Netflix for another company. She then must assess whether she would fight hard to keep that person. If she answers no, that person is promptly removed and offered a severance package. Netflix doesn’t support keeping “B level” employees. So even though Netflix may have a flexible organizational structure, there is a trade-off between freedom and stability that employees face. Would you like to work in a Netflix type of environment or would a job that offers more security and stability appeal to you more? What would be the benefits/drawbacks of each?


CVS Health Investing Back Into Their Business

After the US Tax Cuts and Jobs Act, CVS Health has made improvements to its business. They are making changes to their employment systems. This act allows them to share in the tax savings. CVS Health has decided to invest in three programs that will enhance their employee benefits and wages. One program is meant to increase the starting wage for hourly employees. This change will affect almost all employees, regardless what department they work for. The second program will allow for affordable health care. CVS will not increase premiums and absorb entire cost for medical and prescription costs. Lastly, the final program allows for paid maternity leave for up to four weeks. This is a new addition to the company benefits.

With these changes, CVS Health is aiming to create long-term and sustainable changes. It is “part of their ongoing commitment to their patients, customers and communities [they] serve…” They want to show that they value their employees. It is due to them that the company strives each and every day.




How Retailers Measure IT Implementation Success

Retailers use a variety of different technology for their website, apps, in-store operations, and distribution centers. It is vital to have a system in place to evaluate the benefits to the business. These measures are required to smooth the process of predicting current and future investments on technology. Since increased revenues and cost savings are standards for almost all retailers’ IT evaluation process, there are four areas each should focus on to be able to measure IT success. First, they need to realize what enhancements the investment will result in, and the problems it will resolve. Knowing what you have to measure if essential to measuring ROI. A calculable amount, like increased clients served, are key to identify before the start of a project. Second, retailers must carefully study staffing changes that may be necessary. Day-to-day operations may be impacted and must be identified before a large investment. Some projects may eliminate some departments completely, while others may create a new one. Third, retailers must be able to get support and funding from upper management. If someone in middle management doesn’t effectively communicate the initiate to those in charge, the project will most likely fail. Fourth, they must identify required training/resources needed. Much of the value in a new system is resulting from people knowing how to use it. Retailers that do not consider these four areas are likely to fail with measuring IT implementation.


What are some examples of retailers successfully implementing technology? What metrics can you identify to measure their success?




Will Payless Survive?

bankruptcy photo

Recently emerged from bankruptcy, shoe retailer Payless ShoeSource announced the realignment of its organizational structure a week ago with goals of becoming a more customer-focused company. The company has made the decision to reduce hierarchical levels between its corporate headquarters and retail stores. As a result, Payless is increasing the number of North American associates working closely to the store level, with company goals to develop a team of strong leaders to guide the store teams. This intended result of this effort is to have a flatter organizational structure will enable the company to reach its customers more directly. However, it remains to be seen whether this reorganization will lead Payless in the right direction. While reducing layers in an organization can lead some companies to certain benefits, including an increase in communication between all levels of associates, other companies may struggle to adapt to the new structure. It will certainly be interesting to see the outcome of this restructure, specifically if it keeps the company from going bankrupt again. Do you think Payless customers will feel the effects of this reorganization? What are reasons that this reorganization could cause Payless to fail?



Why enterprise architecture maximizes organizational value

Many CIOs are currently focused on blockchain, artificial intelligence, and cognitive computing. However, there is a powerful reason forCIOs to spend time talking about enterprise architecture enabling applications, host infrastructure, business services, and reference architecture. A rock-solid enterprise architecture can transform an organization. Enterprise architecture can increase agility, reduce solution delivery time and create a shared vision for a company. It defines how an organization will meet future business problems and forces a decision based on outcomes. Businesses should switch from silo-based systems to a unified and integrated enterprise ecosystem. An integrated ecosystem gives a business additional flexibility to respond quickly to market conditions that change your competitive landscape. Can an organization successfully change its strategic goals, business model, data and applications without a sound enterprise architecture? Is it just as important for small and medium sized companies to have a strong enterprise architecture or can they be just as productive without one?


The Growing Popularity of Flat Organizations

team photoFor many years, most US corporations have focused on a hierarchal organization structure for their organization. The structure typically meant that an employee has a boss, that boss reports to their boss and so on until you reach the CEO at the top of the command. Today, many corporations are moving towards eliminating hierarchy amongst their organization and becoming a flat organization. In a flat origination, there are no bosses, everyone is equal and working together as a team. This creates an opportunity for employees to be able to work on projects more efficiently by removing barriers such as, time needed to get upper level approval. Ciplex, a marketing agency that adapted a flat structure, noticed that after the change, projects that would normally take six months, only took six weeks to finish. The company also noticed that employees are happier and have a greater focus on improving customer satisfaction. With more project being completed, more can be taken on, increasing both revenue and satisfaction. Yet, with the removal of upper management, it can often bring up some odd rules. At Valve Corp., a video game company, pay is voted on by peers and promotions are nonexistent. Ciplex, fired any employee who resisted the change, and now has a policy where employees vote off anyone they don’t like. My questions that have risen from this article are: What do you think about flat organizational structure? Do you think you would be able to sacrifice not having a boss for equality? Is a flat organization only realistic in certain companies or can it be universal?



Employing Pre-bureaucratic Structure With A Loose-Tight Governance Model in Local Government to Better Serve Communities

For many, the first word that comes to mind when we think of government is “bureaucracy,” and not just because of its literal place in government. Bureaucracy as we know it has a negative connotation, criticized for its inefficiency and inflexibility to individual situations. Within the context of organizational structure, a bureaucracy clearly defines roles and responsibilities within a hierarchy with respect for merit. In a typical bureaucratic structure, there are many levels of management. We can’t escape the endless hierarchy of government at-large. However, why does local government have to be inherently inefficient as a result of the bureaucratic structure it sits below? Anyone who has tried to work with the Philadelphia Mayor’s Office or City Council knows that it is as seemingly impossible to get anything done, as if we were attempting to pass a bill through congress. In society, we fantasize startup culture and its ability to “get stuff done.” Why can’t local government operate like a startup? To best serve its people within the constraints of democracy, local government should employ a pre-bureaucratic structure using loose-tight governance model. A pre-bureaucratic structure is completely centralized, where the leader (in this case the elected official) makes all key decisions through one-on-one conversations. In a loose-tight governance model, there is a balance between control and autonomy where the most importance processes are kept under central control (the elected official), but staff (subordinates, supporting government staff) are given huge amounts of freedom to think outside the box. This approach gives local government officials the freedom and agility to accomplish goals within the context of democracy and the larger structure of government, while empowering government employees to flex their creativity, all working towards serving their communities in a more flexible and efficient way. How else can we use course concepts, such as systems thinking, to improve local government? Can a similar structure and governance model support positive change elsewhere in society?

Information Sources: X & Y
Image Source: Z

Systems Thinking in Public Health

healthcare photo


Health practitioners’ capacity to understand and think through complex challenges can be enhanced through the use of systems thinking tools. Utilizing systems thinking tools such as BOT or Behavior Over Time graphs along with data from other systems across the healthcare industry can aid in the overall improvement of public health. These tools allow for health practitioners to not only analyze trends, but also analyze the events and systematic forces that play into the development of such trends. Additionally, systems thinking in this way creates the opportunity for health practitioners to discuss freely and creatively, therefore providing a more holistic, deeper understanding of trends in public health. BOT graphs are also useful tools in advancing the systems-level thinking in public health. Studies show systems thinking in public health also increases the engagement of stakeholders surrounding these issues. In my opinion, by applying system thinking, health practitioners can enhance their ability to analyze trends in public health and allow for a heightened sense of creativity surrounding their proposed solutions to these trends. A question I would like to pose is: in addition to BOT graphs and analysis, how else could systems thinking be useful in public health? Is it purely advantageous in an analytical sense, or are there other benefits to systems thinking in public health?



Where and when do we meet?
Alter Hall 603
12:30-1:50 Tuesdays and Thursdays
Office Hours
Tuesdays and Thursdays, 2:00-3:00 PM