ASK 1

Contents
INTRODUCTION...........................................................................................................................1
Definition - Organizational Structure..........................................................................................1
Types of Organizational Structures:............................................................................................1
Benefits:.......................................................................................................................................1
Two Important Organizational Structures....................................................................................1
Functional Structures:...............................................................................................................1
Divisional Organizational Structure:........................................................................................1
Carrefour’s Organizational Structure...........................................................................................2
Carrefour’s Organizational Strategy................................................................................................2
PESTLE Analysis........................................................................................................................3
Political Factors:.......................................................................................................................3
Economic Factors:....................................................................................................................3
Social Factors:..........................................................................................................................3
Technological Factors:.............................................................................................................3
Legal Factors:...........................................................................................................................3
Environmental Factors:............................................................................................................4
Labor Market...................................................................................................................................4
Internal Factors............................................................................................................................4
External Factors...........................................................................................................................4
Strengths:..................................................................................................................................4
Weaknesses:.............................................................................................................................4
Opportunities:...........................................................................................................................5
Threats......................................................................................................................................5
Losing Allowances..........................................................................................................................5
Impact of Technology......................................................................................................................5
References........................................................................................................................................6
INTRODUCTION
Definition - Organizational Structure
An organizational structure basically sheds light upon the way different important activities and
tasks are managed with the sole purpose of attainment of organizational objectives. It highlights
the various responsibilities and roles that are entrusted upon an employees’ shoulder within an
organization. The position of a particular employee within an organizational structure depends
upon the level of authority that they possess within that organization and there exists a directly
proportional relation between position in organizational structure and authority. Moreover,
organizations with a streamlined structure operate with greater efficiency compared to ones with
a weaker one.
Types of Organizational Structures:
There are four major types of organizational structures, and their names are as follows:
 Flatarchy Structures
 Matrix Structures
 Functional Structures
 Divisional Structures
Benefits:
There are several benefits associated with organizations that follow a well devised organizational
structure. These include their ability to open and operate in multiple business locations, glean
better employee performance, have an improved inter-departmental communication, having a
reduced level of employee conflict, and the ability to make decisions comparatively promptly.
Two Important Organizational Structures
Although all types of organizational structures hold significant importance. However, the two
most important and most prevalently used organizational structures are functional structures and
divisional structures.
Functional Structures:
This type of organizational structure is employed to have a better organization of workers
serving in the organization. It works on grouping system and workers are grouped based on their
knowledge and skills. It basically organizes each department with their designated
responsibilities starting from the presidents’ departments to finance and sales departments,
followed by customer service and so on. Such a type of organizational structure consists of
different specialized units that are required to report to a single authority. This authority is named
as the “Top Management”.
Divisional Organizational Structure:
Such a type of organizational structure that puts together and streamlines different business
activities around market, service groups, geographical locations, or products. Hence, a company
that is based on divisional matrices can have its operational groups residing in Europe or United
States or for different sorts of commercial customers. Each of the specified divisions possess a
vast set of functions. Therefore, a sales and marketing division will be responsible for its own
accounting or finance related activities engineering of its own and so on.
Such a type of organizational structure is declared essential when decision making needs to be
limited to division levels and to be able to react promptly to local circumstances. This type of
structure is devised when an operating company possesses several markets, regions, or products
portfolios.
Carrefour’s Organizational Structure
Carrefour, being one of the most renowned retailers and known for having its operations
established in multiple states, countries, and regions is one of the most prominent examples of a
company that employs a combination of organizational structures.
The company basically uses a combination of functional and divisional organizational structures.
Functional structures are at inter headquarter level where CEO of a particular branch is regarded
as the person to be reported to. Then comes the CFO, Director of organization and the Director
of marketing and merchandise. Such a type of organizational structure works exceptionally for
Carrefour as different yet important business-related tasks are managed simultaneously in
separate divisions.
Then comes the significance of divisional structure which comes into play when handling several
different branches in various and widely spread areas are concerned. Having a well devised
divisional structure, lets the company operate in a sound manner with properly delegated policies
and organizational culture in each of these branches.

Carrefour’s Organizational Strategy

The organizational strategy devised by Carrefour has its foundations resting upon several
different variables. These include pace, cost, quality, constancy, and adaptability. These are
regarded as the defining factor for the company to determine the strength or weaknesses
associated with Carrefour’s operations. The ability to strive for excellence in these highlighted
variables depends upon attainment of continuous expansion, quality conveyance and excessive
innovativeness which can be conducted through the company’s designated research and
development department.
Speed factor and response rate are other major aspects coupled in the overall strategy which are
incorporated in all of the marketing and other primary input areas.
 Example: Referring to a specific example that depicts Carrefour’s strategy can be the fact
that in Oman, the company makes sure that the products are as per the targeted
population of Oman so that they prefer them, and the overall sales of the company are
increase through greater level of specificity. Moreover, the packages and quality
considerations are kept into mind to make sure that individuals are satisfied with what
they are offered and the overall footfall as well as the probability of repeat visits is
increased. Moreover, innovating in the products being offered is what makes it an
extremely successful retail business as the company very intelligently caters to varying
customer requirements and offers them both what they are looking for with the right
value of money that they are spending.
PESTLE Analysis
Political Factors:
Since Carrefour operates in several countries and has been a source of employment to a great
deal of individuals, it is entrusted with a very important responsibility to take into account the
varying political circumstances of each of these countries where it has established its operations.
There exists a very high tendency of variation in policies within the umbrella of which wholesale
and retail businesses run their businesses. One such example can be when Carrefour had to shut
down 5 of its stores together with quitting its operations in the Indian market due to the overall
losses that it encountered because of the change that occurred in Foreign Direct Investment
policies. Moreover, it is imperative that the countries where these businesses are running their
operations are not subject to terrorist attacks or invasions as that can lead to significant losses as
well.
Economic Factors:
The overall strength of economy where Carrefour has setup its operations is of immense
importance in determining the overall profitability of the company in a financial year. A major
extent of market of Carrefour is based in China and other developing economies hence the
uncertainties associated with the economic circumstances of these areas takes a toll on
Carrefour’s profitability as well. Greater the GDP growth rate greater will be carrefour’s
profitability together with other factors such as tax, level of interest and governance in the
countries.
Social Factors:
The variations in lifestyles and choices of individuals all over the world coupled with their
varying attitudes directed towards shopping are some of the factors that add to the type of
audience that Carrefour should be targeting. The company needs to make sure that it keeps a
solid check on innovations as the changing behavior requires up to date offerings in the market
and hence retailers have to step up their game to make sure that everything is effectively
attained.
Technological Factors:
Overall technology has been regarded as the most important contributing factor towards the
success of companies striving in the market today. With rising competition in the retailer market.
Carrefour needs to make sure that it has most up to date technology together with trained
employees to ensure that they make the right use of technology and make the most out of it and
make sure that they gain a competitive advantage over other rivalries. These advancements help
towards improving the overall customer satisfaction and the more they are satisfied, greater will
be the possibility of customers visiting and making purchases again and again along with
creating a word of mouth for other individuals as well.
Legal Factors:
The labor laws implemented in different countries, specifically those related to wages for labor,
provision of adequate working environment, together with other amenities such as pension
schemes, insurance, etc. are very strictly monitored and implemented in some countries. Lets say
if Carrefour launches a new product or technology under its umbrella, it needs to make sure that
it is well-protected on the basis of their intellectual property laws. Moreover, different health and
safety considerations for the people working in the stores are dealt with immense seriousness as
well. There are legal laws and carrefour is expected to comply to these laws based on different
countries.
Environmental Factors:
Sustainability and the companies who value sustainability is regarded as an extremely important
factor in modern day and age where our environment is in a constant state of depletion through
different types of pollution such as air, noise, water pollution, etc. In these alarming
circumstances, the emphasis that Carrefour places on conserving the environment is what makes
it stand out as compared to rest of its competitors as well. By devising and implementing
company specific policies to make sure that environment is saved from unfavorable pollutants
highlights it in each of the countries where it is running its operations.

Labor Market
Being one of the most popular and widely spread chain of retail market, Carrefour has an
extensive network of labor and is known for giving employment to hundreds and thousands of
individuals. With company headquartered in different countries, the labor market is centered as
per the natives of those areas to ensure that people are comfortable enough in communicating
their needs and can get what they require by making the least possible effort. However, there
exists just one major consideration that demands attention and needs to be taken into account,
and that is to make sure that these people belonging to different areas are well aware of the
company’s basic culture and organizational structure and hold it firmly while running operations
individually.
Internal Factors
The internal factors that impact the organizations’ ability to gain and maintain sustained
competitive advantage include core competencies that it holds and reassures in all of its
branches. These mainly include the automation of various tasks that spares greater time at the
hand of employees which is then expended in maintaining consistency as far as the quality
considerations are concerned. Moreover, in all of its branches, it is assured that the workforce is
exceptionally skilled and possess great amount of knowledge. The cash flow that the company
maintains and the improvement within that factor is what drives the company even further. It
also undergoes decisions associated with different mergers and acquisitions to make sure that it
bonds with well-functioning companies and succeeds accordingly. The company’s performance
is centered towards fulfilling the needs of both their labor market as well as customers so that all
of them exist in a positive and satisfied environment and the company flourishes even more.
External Factors
These include external analysis within the same industry. For this a SWOT analysis is conducted
to identify company’s strengths, weaknesses, opportunities and threats that makes it
distinguishable from rest of its competitors.
Strengths: The strengths associated with company include its strong core competencies together
with the brand name that it has managed to attain and the loyalty that customers exhibit towards
this particular retail chain. The company uses this well-established position very strategically and
makes sure that it maintains this position by being strongly competitive and innovative.
Weaknesses: The weaknesses associated with the company mainly include the diversified
structure and the extra effort and resources that are required to be expended to make sure that all
of the various different branches are working in accordance with the rules and policies devised
by the company to exhibit a consistent outlook to everyone around the world.
Opportunities: The opportunities for Carrefour are tremendous considering the ability of the
company to expand around international markets. With expansion in different markets the
overall market share attainment of the company is enhanced, and hence more and more people
become aware of this retail giant which leads to increased sales together with increased
profitability.
Threats: The threats associated with Carrefour include the rising competition in the market which
includes both, other retail giants as well as small scale local stores because the have the ability to
let customers switch to them for the reasons that can range from convenience to better packages,
etc. Hence, Carrefour needs to ensure that it stays on its toes and maintains its position amongst
the immense competition.

Losing Allowances
These basically involve the fee that is collected by Carrefour as a retailer from different products
manufactures so that the retail giant can keep and market their products. It is regarded as an
extremely important element in the overall cash flows of Carrefour as this area covers a major
chunk. The variations in this allowance that is accumulated through manufacturers depends upon
the priorities or preferences that they hold such as extensive marketing, their specific sales
individuals in the store or attainment of a shelf position that is more prominent and grabs the
customer eye in a better way. However, while this is important, it is simultaneously noticed that
Carrefour is facing threat in terms of the fact that the rising competition in the overall market is
affecting the company’s cash flows with manufacturers reconsidering their packages and
substituting to other alternatives that offer better and lesser fee arrangements. Hence Carrefour
needs to make sure that it secures these allowance values by coming up with innovative tools and
techniques to attract manufacturers and let them stick to the company rather than switching to
other alternatives. Moreover, it is considered from their employees’ perspective, then if such a
loss is transferred to them by reducing their allowances, their cash flows or the perks and
privileges that they are offered then it leads to a snow ball effect where Carrefour as well as its
employees are effected. When customers will start switching to competitors, the company will
incur losses in terms of their overall sale and that loss will be translated for the entire company
and its employees, painting a very unfortunate picture for carrefour.

Impact of Technology
Technology holds immense importance in all walks of life in modern day and age. The impact
that it holds on the industries is strong and long lasting. Hence, it is imperative that organizations
catch up with the emerging trends and technological advancements to make sure that they are
functioning at par with other competitors and have their sustained competitive advantage
maintained in a reasonable fashion. Technology has given new dimension to retail industry as
well. Considering it to be a highly customer centric industry, it is imperative that retail giants,
Carrefour in our case opt for these advancements to guarantee themselves a strong position.
Moreover, it is imperative that while technology is introduced in a business, people proficient
enough to manage it are inducted as well so that they can make the most out of it and train other
employees to switch to those alternatives as well. There should be a rigorous check on everyone
to ensure that they are using newly devised procedures and excelling through attainment of
excellency, efficiency, and effectiveness that technology aims to provide. In terms of Carrefour
specifically, the company can focus on implementing technology at areas such as product search
which takes time, automated and efficient process at cash counter, automated trolley services etc.

References

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‌Task 1 : Q5 :

Explain how people practices impact on organizational system and structure?

Comment : need to revise this answer as there is a discussion of losing allowances
however it is unclear if and how this related to the question.

There should be a clear outline of how people practice impacts on systems and
structures.

Think about the activities we do which make an impact.