Online Custom «Best Buy Organizational Structure» Essay Sample

Best Buy Organizational Structure


This paper has three objectives, such as to explore the background and organizational overview of Best Buy Co., to investigate the organizational structure of Best Buy Co., and to determine the roles of each of the departments in Best Buy management. To attain these objectives, the paper discusses information about the organization in four main parts that involve background, research methods and data collection, findings, and conclusion. The discussion of the background begins by briefly introducing the retail industry with particular attention to electronics sector. Then, the paper attempts to explain the rationale behind the operations management approach of Best Buy Co. Subsequently, it discusses the methods used to access information about the company’s organizational structure and operations. After that, there is the detailed description of the researcher’s analysis and findings, and finally, the paper states the researcher’s conclusion based on the conducted analysis.

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Best Buy is a market leader in the sales of technology merchandise, solutions, and services. With a huge presence in the United States, Mexico, and Canada, the company makes more than $45 billion in annual revenue. The retailer has over 1500 outlets in the Americas, including mobile shops and large-format stores ("About Best Buy - Best Buy Corporate News and Information," 2017). The company has a customer-centric operations managements approach. It derives its competitive advantage from the strategic improvement of its stores to increase the satisfaction of its target market. Furthermore, it streamlines its supply policy in order to meet the needs of the customers more effectively. The operations approach is important for many reasons – first, it has enabled the company to expand its market segments through the introduction of new products with greater demand, such as smartphones. Secondly, it affords its workers greater freedom from the conventional management rules, thus empowering them to serve the customers better. Thirdly, the approach enables the company to reduce the cost of shipment while increasing the speed of delivery through lean service. Moreover, it allows Best Buy to incorporate new information technology in customer service. Because of this management approach, Best Buy is a model company that many technology retailers in the United States and beyond are aspiring to beat.

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Research Method and Data Collection

The researcher conducted a case study of Best Buy Co. by using content analysis method to collect qualitative data. The case study design suited this research because it allows an in-depth exploration of a case against scientific theory. The main sources of information for this study were Best Buy website and electronic documents, such as company reports and online peer-reviewed articles with information related to the operational management approach of the company. To increase the reliability of the evidence, the researcher explored many sources of information. The researcher then recorded information collected from the content analysis to form a related chain of evidence. Subsequently, the researcher analyzed the data by observing, grouping, and testing it against the study objectives. Based on the analysis, the study came up with findings aiming to address the primary objectives of the study. Finally, the study made its conclusions from the findings.

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At the top of the Best Buy organizational structure is a Board of Directors.  The company’s operations are headed by the CEO, Hubert Joly, who is also the chairman of all its divisions. The company has two Senior Executive Vice Presidents (SEVP)s, Shari Ballard and Mike Mohan ("About Best Buy - Best Buy Corporate News and Information," 2017). The first one is in charge of multi-channel business of the company. She manages the retail stores in the United States and Mexico, as well as the e-commerce division and Best Buy real estate investments. She also oversees Executive Vice Presidents in charge of the company’s foreign divisions in Asia, Canada, and Europe. The second Senior Vice President is in charge of marketing and merchandizing in within the United States. He oversees Best Buy supply chain, marketing, merchandizing, and category management in the local market. Under the Vice Presidents, there are the Financial Officer, Chief Communications and Public Affairs Officer, General Counsel, Chief Strategic Growth Officer, Chief Human Resources Officer, and Services President.

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According to the Best Buy Annual Report (2017), one of the most important departments in Best Buy is the Finance Department headed by Corie Barry. The department manages all finance-related business aspects, such as corporate growth and strategic planning activities, prices, procurement, information security, and information technology. It also conducts audits of all other departments and financial statements. Secondly, the Communications and Public Affairs Department under the leadership of Matt Furman manages both external and internal communication. It is also responsible for planning and running events, sustainable corporate responsibility, public relation strategies, and government relations. The third one is the Legal Department led by Keith Nelsen, which handles all legal issues in the company. In addition, the company has a Human Resources Department that recruits and manages the welfare of its workers. It is directed by the executive Kamy Scarlett (Best Buy Annual Report, 2017). Lastly, the company has Marketing Department responsible for managing and implementing its market and sales strategies.

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Best Buy has a network organizational structure, with executive managers at the top of each department and merchandise staff, sales associates, and store workers at the lowest level. The departmental managers connect the employees through supervisors and are accountable to the company’s Vice Presidents. Diverse communication methods can work in this management structure, and communication tools can be either official, such as memos, or casual, such as based on simple discussions (Puranam & Maciejovsky, 2017). However, in most cases, Best Buy communicates to its workers through an Employee News Feed or email.

The power hierarchy is important in maintaining progressive operation of the company. Right from the store level, Best Buy managers, assistant managers, and supervisors are empowered to provide leadership to their teams. This approach increases accountability, hence leading to greater success (Czinkota, & Ronkainen, 2013). Nevertheless, the management system can limit the independence of the workers, inhibiting their innovations (Thornton Ocasio & Lounsbury, 2012). It can be a setback for the company’s customer-centered operations approach because strategic improvement at the store level requires the unreserved effort of the workers at the bottom of the structure. Despite criticism that it compromises the employees’ independence, Best Buy has managed to encourage good customer service through close supervision. Moreover, the use of the Employee News Feed offers an opportunity for the employees to communicate their own suggestions and customer inputs to their supervisors, who can in turn pass them over to the managers along the chain of command.  

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The company’s growth can be attributed to the high quality of positive customer-employee interactions, which are promoted by the stringent accountability demand of the network organizational structure. Apart from having a customer-focused approach to business, the company has been able to succeed with sales because it closely cooperates with its workers. Best Buy has also been able to uniquely incorporate modern information technology into a generic communication hierarchy. The efficiency of the network organizational structure could partly be the reason why Best Buy finds it easy to enter new markets within and outside the United States.

Furthermore, the structure makes the company flexible as it can transform itself or change its products fast and easily whenever there is the need for it. The market segments, American and international ones, function as sub-organizations within the company. Therefore, they can be changed significantly without affecting the operation of the entire company. Also, according to the management structure, each segment has sub-segments, i.e. Geek Squad and Best Buy Mobile. Thus, this research concludes that the network management structure is one of the best organizational communication approaches for companies such as Best Buy that deal with challenges in multiple industries.

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