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.