Organizations and their Effect on the Business Environment

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One of the internal attributes that have a direct impact on the operations and standards of performance is organizational structure (Zheng et al., 2009, p.763). In certain situations, improvements in the operating environment, such as emerging consumption patterns or other customer behavior, economic circumstances, and political considerations, necessitate the implementation of management-relevant policies. Changes further transform the competitive environment, leading to the achievement of superior success. The organizational structure is a critical determinant of how members are assigned tasks. Moreover, it guides the relationships and authority among the employees when undertaking various tasks (Chen & Huang 2007, p.105). Similarly, other internal characteristics of the organization that is its scope, size, and legal frameworks have a significant impact on the overall performance and success.

There are different types of organizations in the contemporary which are mainly based on external or internal mindedness as well as stability and flexibility aspects (Zheng et al., 2010, p.768). According to the Organizational Assessment Instrument, the common types of organizations are hierarchical, market and adhocracy. The three approaches have been successfully applied in different firms and resulted in international growth. Notably, the structure is impacted other aspects such as culture and other critical variables. Hierarchical approaches are characterized by internal mindedness and stability while the additional two types that are market and adhocracy systems are considered flexible and relatively external mindedness in their operations (Gotkin 2012, n.p). The international business environment present organizations with unique challenges including increased competition, unpredictable political conditions, and individual cultural orientations. The type of structure adopted greatly determines the extents of resilience and success that result from these establishments. It is by the above facts that this write-up will examine internal characteristics including product and services, structure, size, and scope among other details of Walmart, Ciplex, and Starbucks Coffee Companies.

Walmart Stores

Background Details

Walmart Stores was founded in the year 1962 in Arkansas on the philosophy of great value and customer service ( 2017, n.p). Sam Walton, the founder of the business, established the business with the idea that offering low prices for commodities alongside better services to customers were the basic principles of success. Walmart evolved through the various stages after its first public appearance in 1970. Currently, the retail store is considered as one of the world_x0092_s largest with over 2.3 million associates serving approximately 260 customers every week ( 2017, n.p). The rich heritage continues to guide the services provided at the store as well as upholding the principles of enhancing customers' experience.

Products and Services

Walmart is a retail store that stocks a wide assortment of merchandise. There are a million different types of products that consumers can access from its stores (Walmart 2017, n.p). It offers friendly services to its customers including delivery of products in the neighborhood stores. Additionally, the company has established a new technology retailing system that which enables customers to purchase products online and collect at the nearest Walmart Store.

Size and Scope of the Organization

As stated, Walmart Store is the leading retailer in the world with multiple international branches. The online purchasing system serves customers across the globe. Currently, the number of clients is estimated to be 260 million. According to, the internet function, the numbers are expected to increase in the future.

Mission and Vision

Walmart aims to make a difference in the lives of its customers by saving them money and improving their quality of life. In order to achieve this vision, it offers high-quality products at lower prices.

Business objectives and Purpose

The company objective is to meet customer needs as well as those of the associates. The purpose is to save people money to promote better lives.

Organizational, Legal Structure and the Stakeholders

Evidently, Walmart Stores continue to gain international presence through constant growth and expansion which reflect an interaction between the structure and corporate culture. It is a corporation with the Boards of Directors. According to Lombardo (2017, n.p), Walmart_x0092_s rise to a leadership position in the retail business is attributed to the hierarchical functional organizational structure. Apart from the chief executive officer, other employees work under their superiors. It implies that there are vertical lines of authority through which the managers implement company_x0092_s mandates and directives. The setting up of Walmart .com which is an online purchase platform connected to its stores in the neighborhood is a reflection of the existence of various functional departments within the organization (Walmart 2017, n.p). The organization has several branches in the U.S market as well as international arena. The clarity of the chain of command that is the flow of decisions from top to bottom promotes effective communications. The workforce who is organized into teams is highly motivated due to the openness in the reward system especially concerning promotion (Griffin 2017, n.p). As a result, the structure promotes adequate monitoring and control over the departments and middle-level managers from the Walmart_x0092_s headquarter.

In as much as Walmart is the world largest retail store, the hierarchical functional structure is highly inflexible (Chen & Huang 2007, p.108). As a result, its response to changes in the market and other business practices are relatively slow making it vulnerable to competition. Notably, organizational structure determines its values and the culture. In the case of Walmart whereby the guiding principles include integrity, respect for individuals, quality customer services, and strive for excellence, the structural approach should uphold these virtues. However, due to the inflexibility of hierarchical functional approach, the retail store cannot meet the set thresholds (Lombardo 2017, n.p). For instance, the company has not adequately handled the concerns for low wages among its employees. It implies that the chain of command as expressed in the structure fail to recognize the principles integrity and respect since it put employees on the receiving end during the decision-making process.

Additionally, the company has indicated its commitment to the success of other stakeholders such as investors, community, customers, and government (Hollensbe et al., 2014 p.1230). The firm supports the stakeholders through its various corporate responsibility initiatives that include a return to shareholders, in-kind contributions, as well as participation in environmental protection.

Walmart Stores Organizational Chart

Adopted from Creatley (2017, n.p).

The above chart depicts the functional organizational approaches in Walmart reflecting the seniority relationships among the employees. Departments I to IV represent Human Resource, Sales and Marketing, Administration, and Finance respectively. The right arrow indicates information flow whereby policies and other management decisions are top down while communication of feedback occurs from bottom-up. Therefore, the structure defines the relationship between the stakeholders, their roles, and mandates which results in higher stability.

Starbucks Coffee Company

Background Details

Starbuck Coffee Company began in the year 1971 as a small retail store dealing in whole bean, ground coffee, and other spices. The company has since expanded the product base and its presence globally. As a result, there are over 24,000 retail stores in 70 countries (Starbuck 2017, n.p). Currently, it offers various blends of coffee, fresh food as well as handcraft beverages among other products. A feeling of connection with the clients was the initial drive upon the company foundation in Seattle-Pike Place Market. Based on the same physical, Starbucks Coffee continues to gain an international presence. It points to the large size and a broad scope of the organization. The mission statement emphasizes the need to nurture human spirit and to promote neighborhood among the people. The concept advocated in the mission statement is enforced through environmental stewardship and community involvement initiatives. As a result, the company continuously seeks to establish a connection through expansion and quality service to its customers. Similarly, Starbucks stakeholders include the employees, shareholders, associates, communities in which they operate governments, and associates. The organizational, legal structure is a Limited Liability Company. It implies that the decision making process is a shared responsibility especially with the international partners (Starbucks 2017, n.p). Therefore, the company has consistently maintained its ability to meet customer needs and build connection in line with its vision and purpose.

Organizational Structure in Starbucks Coffee Company can be considered as a market-oriented. According to Meyer (2017, n.p), the company operations reflect four main features that are functional structure, geographical divisions, product-based divisions, and teams. Analysis of these characteristics points to the salient features of marketing organizations which is growth maximization and increase in value. Firstly, the functional aspects closely related to the hierarchy in due to the presence of a specific chain of command with the Chief Executive Office as the topmost rank (Eccles et al. 2014, p.2841). There are groups of departments according to the desired functions for instance implementation of policies will require the input of the human resource department. Secondly, Starbucks_x0092_ organizational structure also involves product-based divisions to oversee the various product lines available in the company. As stated above, the company offers several products including merchandise such as coffee brewing equipment. Other products areas are Ready-to-Drink (RTD) and fresh foods (Starbucks 2017, n.p). Therefore, the product-based divisions have the mandate to develop and improve its line of products with the support from the management. It creates a favorable environment for innovation in pursuit of the company_x0092_s mission.

The third aspect of Starbucks structure is its geographical division. Due to expansion in the global market, the company has three main regional sections headed by a senior vice president (Meyer 2017, n.p). One significant aspect of the geographic division is their flexibility. It implies that they have the authority to adjust policies and established policies to fit the prevailing market conditions. Lastly, the teams are the last aspect of the Starbucks_x0092_ structure that considered to be at the lowest organizational level. Cafes rely on the effectiveness of the teams to deliver services and meet the set objectives. They have direct contact with the customers which make them an essential source of feedback that inform innovation as well as policy issues in the whole company. Notably, the existence of multiple features reflects the organizational strategy to embrace both stability and flexibility (Provan & Kenis 2007, p.245). The management structure promotes the marketing approach in which the culture allows for relatively higher autonomy, unlike the traditional hierarchical setup. In most cases, the marketing organizations are considerably complex. It implies that the concept of the decision-making process, setting up the various features require considerable resources concerning both finance and human capital.


Background Details

Ciplex is a marketing agency located in Phoenix (Ciplex 2017, n.p). It offers services such as web design, website maintenance, and WordPress development among others. The company is based in Los Angeles and Phoenix besides its online services across the globe. Its recent structure adopted in the year 2011 is a perfect representation of adhocracy organization. Formerly, it operated standard structures including middle-level managers and project managers who had a definite chain of command just as in the hierarchical organizations. The founder Ilya Pozin, the founder, changed the whole management system whereby he disbanded all titles and departments in the agency (Gotkin 2012, n.p). It is a legally registered business as a corporation. However, the complexity of its operations significantly varies with the standard structures that are common in other legal entities. As a result, it lacks most of the traditional approaches including predetermined strategies and scheduled management functions.

As a flat organization, Ciplex is characterized by lack of a specific chain of command. It implies that employees work without bosses (Zhang et al. 2014, p.150). It is an individual responsibility to let others know their operations. Meanwhile, teams comprise of various skills such as designers, writers, and marketers among others. The teams are guided by the set objectives which are connected to the customer satisfaction. It is up to employees to decide what they will accomplish as well as the necessary resources and efforts to meet their targets within the teams. In this setup, the reward system is not defined but depends on the overall output and performance. Adhocracy allows workers to serve on wheels away from the offices to expand their knowledge and networks. As a result of adopting the flat organizational structure, Ciplex reduced its management costs by 25% and its project timelines by 60% (Gotkin 2012, n.p). It implies that higher professional output and satisfaction are among the benefits that the company derives when using adhocracy. Similarly, the organizational structure requires self-correction among the employees which is its primary weakness. Ciplex relies on the feedback from fellow workers to effect certain decisions including contract termination of non-performing workers (Gotkin 2012, n.p). However, there are managerial decisions that require formal approaches such as partnership deals or buyouts. In such cases, adhocracy lacks a clear outline. Consequently, the self-motivation and autonomy demonstrated in Ciplex results into improved output which outweigh the likely consequences.


Apparently, there are several types of organizations with different sizes, scope, and structures among other internal characteristics. The stated organizational approaches that are hierarchical which are represented by the Walmart Stores involve a clear chain of command and top-down decision criteria among other features. Secondly, market organization demonstrated by Starbucks Coffee Company comprised of mixed approaches with relatively higher autonomy given to the subsidiaries which also participated in the decision-making process. Finally, adhocracy or flat organizations are evident in Ciplex in which there are no bosses or titles. The running of activities is determined by the existing customer needs and the desired goals. Each of the structures reflects the culture that guides the operations and relationships. Therefore, the structural approaches implemented by the organization have direct implication in the functions and the ultimate output concerning performance and success.


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November 09, 2022

Economics Business

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