A&B, a strong ethical chain of department stores, selling clothes, food and hardware, faces insurmountable obstacles to its survival as many of the structural factors that have provided the basis for the company's success are under threat. Radical changes in the retail market make the company to loose ground in market share and, consequently, to have to reconsider all elements of its activities. Hence, as an attempt to recover, A&B's managing director proposed to remodel staff attitudes and set customer care as the primary focus of activity, in other worlds to adopt a more flexible firm model.
THE IMPLICATIONS OF THE PROPOSED FLEXIBLE FIRM MODEL
Formal organization, organizational culture, structure and characteristics of the employees are key variables constraining the entire change process.
The flexible firm model will enable A&B to remove hierarchical levels and to introduce a flatter organizational structure, which may lead to reduced costs. This structure may increase the quality of working life, as it draws on many people's skills and expertise necessary for rapid decision-making.
Moreover, with the flexible structure, decentralized management and control will be increased. Some decisions will be made by individual smaller centers, whilst centers still report to the central control. This situation will give divisional managers some freedom to experiment with new ways of working and make decisions as best fits the circumstances at the time as they 'know best' how to act in their own local sphere of responsibility. But, it is worth noting that "because flat organizations have fewer levels of management, with fewer supervisors and middle managers, vertical communication between the workforce and senior management may be hindered". (Leicester 2001, 3.7-3.8)
In general, employees resist a change as they fear will take away something of value. A proposed change in job design, structure may lead to a real...