Affecting Change

S&F Online is a six month old e-tail division of Smith and Falmouth (S&F), a mid-sized mail-order and tele-shopping network with operations in the United States and Canada. Over the next three years, S&F Online's performance will become a critical part of the S&F growth strategy (University of Phoenix, 2002). Irene Seagraves, the CEO of S&F Online believes that her division can be successful and remain a separate entity apart from the parent company. To remain autonomous, S&F Online must prove it is a viable business that can achieve the required growth objectives under its own leadership.

Irene Seagraves has appointed a new COO to lead S&F Online and achieve its stated growth objectives. Because the current situation has not proved adequate to move S&F Online toward its objectives, the new COO will need to identify the current organizational structure, the methods of control within the organization, and the culture that exists within the organization and its various departments. A recommendation to restructure the division and the implementation of more effective management practices will improve the company culture and empower employees to reach the organizations' objectives.

Current Situation

Because the time to get to market was critical, CEO Irene Seagraves moved quickly to establish a web development team, a logistics team, and a marketing manager designed to coordinate marketing and logistics operations with the parent company (University of Phoenix, 2002). Irene Seagraves has an autocratic leadership style; she demonstrates this as she dictates the requirements for bottom line results. Irene's style of leadership is to delegate requirements with a "do whatever it takes to get the job done" attitude. Because leaders of a new organization can have a major impact on the organization's early culture, Irene's leadership has had a profound impact on the culture that developed within S&F online (Robbins & Judge, 2007). Irene is motivated by results and productivity and is less concerned with employee satisfaction resulting in an organization less motivated to participate in change.

S&F Online was established as a small bureaucracy by grouping tasks and responsibilities into functional departments with centralized authority, narrow spans of control and decision-making that follows the chain of command (Robbins & Judge, 2007). The hierarchal structure of S&F Online has failed to make good use of its teams resulting in employee's lack of trust, non-participative behavior and a strong resistance to change. Centralized control has also resulted in the development of sub-cultures within the teams and their leaders. Because organizational culture and various sub-cultures differ they often conflict making it more difficult to achieve effective change in the organization.

Project manager, James Argyle, has been responsible for leading the web development team. James values teamwork and is known for building a personal rapport with his colleagues (University of Phoenix, 2002). As a result of James natural abilities, he has become one of the most influential leaders among the employees. While possessing limited authority, James has developed a high capacity to influence teams demonstrating his informal power (Yuki, 2006). James power has helped to create a strong sub-culture within S&F Online that will present a challenge for the new COO to affect change in the organization.

Logistics manager, Brian Kervor, interacts comfortably with a large circle of employees and his interest in technology provides a strong connection with the web development team. Brian's success in implementing a state of the art order-placement and tracking system has strengthened his relationship with his logistics team (University of Phoenix, 2002). However, Brian's narrow span of control and limited authority also limits his capacity to exert influence beyond his team. Because of Brian's limited power, he has adapted to the sub-culture created by James Argyle.

Marketing Manager, Adam Searle, represents the interests of the parent company, S&F. Adam has developed relationships with both James Argyle and Brian Kervor but does not interact with the team members (University of Phoenix, 2002). Adam's position in the hierarchy excludes him from the sub-culture within S&F Online; rather, Adam represents the culture that was established through Irene's leadership. Adam is perceived as an outsider that does not represent the interests of the employees resulting in a limited capacity to influence the organization effectively. However, Adam's perceived authority gain him cooperation from the team leaders.

Irene Seagraves has given the new COO specific objectives; streamline the online operations, increase the reach of the online sales channel, and make S&F Online a profitable strategic business unit (University of Phoenix, 2002). The objectives set forth by Irene can be achieved only if effective change is implemented within S&F Online. The managers and their teams perceive the COO as an autocratic leader similar to Irene Seagraves. The formal shift in the hierarchy has caused resentment on the part of Adam Searle, who may no longer view himself as the integral link between S&F Online and the parent company. James Argyle will also resent the authority of the new COO because he perceives that his informal power position is threatened. Even though the COO has absolute authority in the organization his current capacity to influence effectively is low, which will challenge his ability to affect the necessary organizational changes. Establishing a relationship with James Argyle as an ally will be necessary for the COO to increase his capacity to influence throughout the organization.

Restructuring Strategy

The structure of S&F Online emphasized a small bureaucracy that has limited the success of the organization. Restructuring will require change in three key areas; formalization, centralization, and work specialization. Reduced formalization will decrease the degree to which specific rules and regulations direct employees, decentralization will empower more individuals with decision making authority, and less work specialization will reduce the degree that work activities are sub-divided into separate jobs (Robbins & Judge, 2007). The adjustment of these three key elements will facilitate a team structure in the organization; a structure that was intended but never achieved by Irene Seagraves.

Implementing a true team culture within the S&F Online organization will consider an innovation strategy. The viability of the online concept has been proven and it is now necessary to grow into new markets and extend the reach of the organization through innovation. Innovation requires a more organic organizational structure that will facilitate cross functional teamwork, sharing of information, and participative decision making (Robbins & Judge, 2007). The new strategy will utilize the influence of the current team leaders, James Argyle and Brian Kervor, to empower their teams and move toward