Chapter 10: Creating Effective Organizational Designs

Nordstrom’s organizational structure invokes success and technological innovation to achieve a sustainable competitive advantage. Nordstrom utilizes a divisional organizational structure to effectively meet the needs of the specific entities within Nordstrom, Inc. Examples of the different divisions include Nordstrom.com, Shoe Division, and Nordstrom Rack. By separating these divisions, Nordstrom is able to evaluate the different financial statements to decide which areas show growth compared to other divisions. From this, executives are able to expand the growing divisions, while creating a plan to better prosper the less successful branches. Because of the size of Nordstrom, this organizational structure benefits the overall firm being able to compare divisions with concrete sales.

Nordstrom actively listens to its customers. As the world becomes more connected, some customers strive for the convenience of online shopping, while others desire for the specialty customer services from the in-store experience. Nordstrom balances these two resources to service to their customers in the best possible way. Nordstrom’s demonstrates a pattern for the focus of technology as online shopping has grown in the last decade. Nordstrom carefully links their products to social media sites such as Pinterest, Instagram, Facebook, and the Nordstrom App. Through these social media sties and Nordstrom’s tight inventory system, Nordstrom is able reach more customers that are continuously visiting these sites in an efficient and effective manner. The links from these sites make the process to buy a product easier than ever wherever a customer is browsing.

Nordstrom recognizes that hiring from within can add benefits as employees learn about working in different levels of tiers within the firm. However, Nordstrom does not fail to bring in new ideas and ensure that they are hiring candidates with precise credentials that align with the innovative goals of the firm. Nordstrom has effectively adapted to technology and invested in the growth of their online presence to meet to needs of customers. Specifically over the last few months, Nordstrom has been actively seeking a new Chief Technology Officer and co-president, Blake Nordstrom states that they are looking not just within, but trying to find the best possible candidate for the position. Nordstrom values innovation and follows the stream of adapting technology to create a sustainable competitive advantage.  

Chapter 9: Strategic Control and Corporate Governance

Nordstrom focuses on a contemporary approach to strategic control to create a sustainable competitive advantage. This approach is exemplified in the organizational structure of the company, where the CEO finds himself placed at the bottom above all other stakeholders. Nordstrom is known for their constant outstanding customer service; their organizational structure also reflects this. The structure represents an upside down triangle in which the customers are first on the top followed by employees, supervisors, middle managers, vice president, and lastly, the CEO. This type of structure portrays the idea that all levels of a company are important and everyone within the triangle has the ability to make an impact on the customers. In addition, with customers added at the forefront of the triangle, this further exemplifies that customers come before anyone else. Nordstrom is constantly evaluating both the external and internal forces that affect the growth and success of their company. Producing this type of structure, allows goals and strategies to be formed at all levels and not from just upper management. Nordstrom chooses in “doing the right things” which creates a successful informational control across all stakeholders.

Nordstrom also gains a competitive advantage while “doing things right” which invokes a sense of integrity and performance within behavioral control. Compared to other companies, Nordstrom initiative a minimalistic approach to their handbook. The handbook states “use good judgment in all situations.” This approach creates freedom for the employees to get creative while constantly servicing the customers in the best possible way. This contemporary method to leave the rules more liberal creates autonomy in the workplace and shows employees that there is more than one ways to solve a problem. It is a forward-thinking approach to building up strong culture throughout the company. Because of Nordstrom's strong culture, consequently, there is need for less boundaries because each employees feels an obligation to do the right thing. Especially as the retail industry continues to change adapting to technological changes, an open-ended approach to handling customer disputes is appropriate and has found success throughout Nordstrom for decades. Because Nordstrom has created a sustainable culture, these unwritten standards of acceptable behavior are implicit and easy for new employees to adapt and implement quickly. 

Nordstrom uses an effective contemporary approach to strategic control that establishes freedom at each level of the chain of hierarchy. The organizational culture within Nordstrom is at the focal point for their success within the retail industry. Nordstrom is constantly creating an strong culture that encourages growth and innovation at all levels, proving to establish a sustainable competitive advantage within the retail industry.

Chapter 7: International Strategy

As the retail industry becomes more globally connected, Nordstrom has increasingly adapted to consumers' demands. Through many different methods, Nordstrom has created value within the global market making them a brand that stands out both domestically, but also penetrating into the international market. One of the major improvements that Nordstrom continues to mold is their online shopping option. Consumers are given multiple options of how to pay for the items. Specifically, Nordstrom provides an accurate time of delivery and the option to pay in multiple different currencies. Nordstrom has partnered with Borderfree, which provides e-commerce globally to offer international shopping. Borderfree ensures that consumers are offered a precise and detailed transparent breakdown of the cost of the merchandise, tax, shipping, and other fees. Nordstrom has successfully become aware of currency risks and taken a proactive approach to these type issues. Nordstrom has focused on adapting the online shopping to both ensure growth through e-commerce, but also creating excellent customer services, creating a competitive advantage where other retailers are currently failing. Reports from early 2017 display Nordstrom’s e-commerce attribute to about a quarter of their sales, and Nordstrom estimates these sales to grow in relation to in-sale purchases in the coming years.

Although Nordstrom has not taken the opportunity to move into Europe or other continents yet, Nordstrom is reshaping their global position through other methods. Earlier this year, Nordstrom hired a new Chief Innovation Officer to better integrate technology into the company’s strategy. The company hopes to communicate with customers better while bringing in new ideas to focus the company on growth in sales abroad through online transactions. Nordstrom is carefully balancing the growth of consumers’ desire to shop online with exceptional experience of shopping in stores, where the majority of their sales are generated currently. Nordstrom’s international strategy is veered primarily toward online sales currently. Moreover, there has been growth in Canada with the addition of new stores in the last year. Nordstrom’s focus on creating value in the global market through an e-commerce and technology position is narrowly specific; however, Nordstrom is determined to gain attention abroad through online sales in the coming years.