Coles Myer Ltd Essay Example

range of businesses, including Coles, Red Rooster, Target, and Myer, has created challenges for Coles Myer as a conglomerate in terms of coordination.

The confusion among employees and consumers was caused by new managers changing business strategies. This led to each business struggling to establish its position in the marketplace as well as in the Coles Myer business family. Myer was continuously under-performing and consumed a significant amount of management's time. Upon his appointment, Fletcher brought about significant organisational change, including the standardisation of IT throughout the company.

In addition to establishing a common culture, breaking down bureaucracy, and creating a coherent strategy for each of the Coles Myer businesses, relevant theories support the notion that Coles Myer exemplifies the characteristics of a machine bureaucracy. This includes having formalized and routine operating tasks, regulations, and rules, as well as centralized decision-making. As explained by Robbins & Barnwell (2006, pp. 123), a machine bureaucracy is an organization demonstrating these characteristics.

As a sizable entity, a machine bureaucracy relies on formal tasks, regulations, and rules to coordinate and manage its operations, leveraging its remarkable efficiency to execute standardized tasks. To achieve economies of scale and minimize duplication of resources, specialties within the organization are pooled together (Robbins & Barnwell, 2006, pp. 24). Many workers are dedicated to maintaining standardization, and numerous members from this pool were amongst the 1000 back-office employees laid off by Fletcher as part of his efforts to reduce bureaucracy at Coles Myer. Nevertheless, specializations can lead to conflicts, the emergence of unit goals that take precedence over organizational objectives, and a decrease in inter-unit communication.

Silos are units that display these traits, and Fletcher faced significant

challenges in trying to break them down within Coles Myer. Moreover, attempting to take on an excessive amount of tasks poses a problem for machine bureaucracies. The intricacies that arise from an organization's efforts to oversee a broad range of businesses can overwhelm the structure of a machine bureaucracy (Robbins ; Barnwell, 2006, pp.).

According to Fletcher, the failure to achieve expected economies of scale after the merger was caused in part by increased organizational complexity. To address this issue, one of his initial actions was to sell off non-core businesses Red Rooster and World 4 Kids. Organizational change, whether planned or unplanned, can result from specific efforts made by a change agent, according to Wood et al.

Wood (et al. 2001, pp 635) defines planned change as the result of someone's acknowledgement of a performance gap, with unplanned change being the opposite. The board identified a performance gap, leading to the appointment of Fletchers as chief executive and change agent. Coles Myer faced multiple challenges, including struggling individual businesses with business strategy and issues with organisational culture and structure on a broader scale.

The kind of change required for these types of problems is known as systematic change. Systematic change is a planned change that is implemented throughout an organization and affects most aspects of its operation. According to Robbins and Barnwell (2006, pp. 377), systematic change is only pursued when it is absolutely necessary due to the significant disruption and effort it requires. The systematic change that Fletcher implemented included downsizing to reduce bureaucracy and costs, defining structures, roles, and responsibilities for each business unit, fostering a common culture throughout the organization, and standardizing IT

across the organization.

According to Burton, Lauridsen and Obel (1999, pp 2), change is an ongoing process that is typically viewed in three stages: unfreezing, changing and refreezing. Unfreezing is when management gets ready for the change, while changing is the actual implementation of it. Refreezing involves reinforcing the desired results and assessing the feedback and progress made. Ultimately, this is a process that is both consistent and sporadic in nature.

Ongoing change involves a rebalancing instead of refreezing, preparing for future changes. Coles Myer required episodic change when Fletchers was appointed, requiring a systematic and significant change that would be given time to succeed. Continuous changes in the past had been detrimental, and extensive feedback was necessary to support this change.

Robbins and Barnwell (2006, pp 405) state that organisational culture refers to the shared system of meaning within a company. In every organisation, there are certain beliefs, symbols, rituals, myths, and practices that have evolved over time. Coles Myer is facing several organisational culture issues. One of these is the formation of vertical subcultures due to the separate nature of its businesses. This has contributed to the silo problem that was discussed earlier. This is a significant problem because the effectiveness of an organisation depends on how well its culture, strategy, environment, and technology align with its goals (Robbins & Barnwell, 2006, pp. 411). It has also led to efforts to establish a unified culture throughout the organisation.

The challenge of preventing subcultures from forming in a large organisation like Coles Myer was demonstrated by Fletcher. During the merger period, organisational culture was also a significant issue which determined the success of the merger. In order

to achieve economies of scale, it was necessary to merge contrasting cultures: the mass marketing culture of Coles and the more refined and sophisticated culture of Myer. However, this task proved too difficult and Coles Myer ultimately abandoned the Myer department store, instead opting to adopt the name Coles Group while leaving behind Myer's exclusive culture. (Robbins ; Barnwell, 2006, pp. 419).

Recommendations have been made to improve organisational effectiveness and efficiency in addition to the actions already taken by Fletcher. One effective approach is to promote communication between silos and prevent their formation by creating coordinator positions. These coordinators will liaise between different departments, ensure all necessary information is communicated, and regularly report back to senior management on departmental performance in relation to organisational goals. Implementing common or centralised IT systems and processes throughout the Coles Group would also significantly contribute to their future success.

Implementing shared software and protocols can enhance communication and coordination while simplifying organizational processes. The Coles Group would benefit from a centralized system, which promotes superior oversight and monitoring- essential functions for a machine bureaucracy. Leifer (1988) states that centralized computer-based information systems require regulations and guidelines that fit the tasks of machine bureaucracy organizations, thereby substantiating this position. Although the switch to a centralized system may seem significant, Rockart and Scott Morton (1984, cited in Leifer 1986 p 66) acknowledge this as a necessary transformation.

According to the author, implementing a centralised system in a machine bureaucracy doesn't require significant changes from the organization. The Coles Group has successfully disposed of non-core businesses and culturally different Myer. With the help of $1.4 billion from the sale of Myer, the

Coles Group aims to unify their brand and culture by reducing key brands to only Coles, Target and Office works within the next two years (Simpson, 2006). This strategy will resolve the organizational culture and structure issues discussed in this case study analysis. The reduction in key businesses/brands will also decrease individual business goals, discourage silo formation, and allow for easier creation of a unified culture throughout the entire organization.

The article titled 'Tension and Resistance to Change in Organizational Climate: Managerial Implications for a Fast Paced World', authored by Burton, R.M., Lauridsen, J., and Obel, B., can be accessed from www and was retrieved on April 26th, 2007.

Here is a document from CBS.dk featuring the tension between Burton, Obel, and Lauridsen in the year 2000. Additionally, there is a cited article by Richard Leifer from 1988 titled 'Matching Computer-Based Information Systems with Organizational Structures', published in MIS Quarterly, Volume 12, Issue 1, page 66. Also cited is an author named Robbins, likely with additional information on the topic.

According to P and Barnwell in their 2006 book "Organisation Theory: Concepts and Cases," the article by Rockart and Scott Morton in the 1984 issue of "Interfaces" titled "Implications of Changes in Information Technology for Corporate Strategy" holds significance.

Leifer, Richard 1988 ‘Matching Computer-Based Information Systems with Organizational Structures’, MIS Quarterly, Vol 12, no 1, pp 66 cites 4-96. Simpson, Kirsty 2006 ‘Coles drops Kmart, Bi-Lo’, The Age, August 1st, 2006, Retrieved April 26th from http://www.theage.com.au/news/business/coles-drops-kmart-bilo/2006/07/31/1154198073979.

Wood, J.; Chapman, J.; Fromholtz, M.; Morrison, V.

The authors of the text are Wallace, J., Zeffane, M., Schemerhorn, J., Hunt, J., and Osborne, R. The information is contained within a HTML paragraph

tag.The book titled "Organisational Behaviour: A Global Perspective" was published in 2003 by John Wiley & Sons Australia Ltd located in Milton Qld. It is now in its 3rd edition.