The current business ecosystem shows unprecedented pace in organizational development, change and management. The case for rapidly growing local startups and/or entrepreneurial projects into major, market controlling companies has become increasingly a characteristic feature of knowledge-intensive economy. This development in organizational development is most notable in e-commerce enterprises. Born online, online retail companies grow into international brands of physical national presence in new markets. From a strategic management perspective, such rapid expansion and growth in to international markets, on- and offline, has been accompanied by challenges. For current purposes, main focus is laid on organizational structure considerations and implications. Specifically, optimum organizational structure for international, multicultural workgroups is discussed in an online international retail marketplace. This paper aims, hence, to offer recommendations for an optimum organizational structure for an assumed international, retail startup made up of diverse, innovative workgroups as well as metrics for effective organizational performance.
Typically, a new, rapidly growing retail startup is made up of a limited number of highly innovative staff, usually affiliated to visionary founders. Given company's newness, corporate culture is usually built from scratch and is, notably, defined by founders' vision and day-to-day management practices not only in early growth phases but also, in many cases, well beyond maturity. If anything, a rapidly-growing retail startup's structure is flat. Moreover, cross-functional jobs are not uncommon. Indeed, first staff members usually juggle many hats, meet regularly and, not least, are not restricted by barriers in reporting across hierarchical communication channels. The ensuing expansion into international markets and diversification of workforce makes evolution, however, into a more complex organizational structure an evitable process.
The case for an optimum organizational structure of a rapidly growing multinational Internet retailer cannot be overemphasized. If anything, organizational performance excellence is shown to be aligned to corporate culture lines (Lee & Yu, 2004). Indeed, corporate culture has a substantial influence on a company's overall performance. In early growth phases, an Internet retail company has a flat structure in which leadership-staff communication is a day-to-day practice. This direct access to senior management and flat organizational structure is gradually lost, in many cases, as company grows, in short- and medium ranges, and matures, in longer range. More complexities are layered into company's organizational structure converting a once flat structure into a behemoth of hierarchical departments and functions. If anything, hierarchical structures assume gradual, cumulative and largely predictable learning curves and outcomes. This underlying rationale for a company's structure and performance is nothing but short of current business ecosystem requirements, an ecosystem marked by unpredictability and uncertainty. One interesting case in point is Tesco (Palmer, 2005). Growing into an international Internet retailer, Tesco had to learn a hard way how UK-based organizational structures and management practices in a UK retail marketplace context are not automatically replicable into different, international markets (Palmer). More specifically, contrary to a predictable, interpolative management model, Tesco had to accommodate international learning experiences marked by shocks and uncertainty in highly volatile markets (Palmer). The critical lesson in Tesco's case is, if anything, one of organizational structure improperly fitted for different market responses and, more significantly for current purposes, irresponsive to increasingly diverse, internal, organizational needs.
The case for inclusive, culturally diverse workgroups cannot be overemphasized. Integral to a proper organizational structure for more effective performance, intercultural competence is shown to factor in as a significant variable in a company's overall performance (Matveev & Milter, 2004). Thus, diverse workgroups are a business mandate. In order to build a culture of inclusiveness and genuine multiculturalism well embedded into a company's day-to-day practices, one would recommend a set of accommodations of organizational makeup and evolution. First, flatness should be maintained as a blueprint, organizational model. This should, if anything, buffer against potential decision-making barriers and communication channel choking points. Second, a comparatively flexible structure (as opposed to a rigid, hierarchical one) is apt to accommodate more insightful inputs from staff members of diverse cultural backgrounds. Indeed, a rigid, hierarchical structure is more likely to set up barriers to innovation only for more "systematic" operational and reporting purposes when a flatter structure based on collaboration is apt to accommodate more innovative contributions. Third, by setting up pilot programs in which highly innovative staff participate and swap functions, more insights can be driven for most optimum workgroup makeup, collaboration and performance. (Technical expertise can, for example, be executed better in one collaboration contexts and not in another.)
The proposed flat structure and collaborative culture should be measured. The metrics for proposed design and culture are diverse. For examples, a Cultural Competence Profile Toolkit (CCPT) can be used to measure intercultural competence in diverse workgroups. The CCPT can assume different formats and can delivered by email, in person or in pre-organized group meetings. For organizational design, outcomes should not be measured based on conventional quantifiable metrics (e.g. profit margins, number of strategic partnerships and standard promotion benchmarks) alone but, more significantly, based on less concrete human capital assets including, for example, knowledge acquisition and management methods (e.g. quantifiable measurement methods of operational and service excellence). These metrics are, of course, complex and may require external expertise for more customization should specific measurement methods are in place.
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Matveev, A. V., & Milter, R. G. (2004). The value of intercultural competence for performance of multicultural teams. Team Performance Management, 10(5-6), 104 – 111. Emerald Insight. doi: 10.1108/13527590410556827
Palmer, M. (2005). Retail multinational learning: a case study of Tesco. International Journal of Retail & Distribution Management, 33(1), 23 – 48. Emerald Insight. doi: 0.1108/09590550510577110