Organizational information.
Over the years, the retail business has proven to be one of the most intricate ventures to manage. Authors have posited that retail business demands a different leadership approach, unique from those of other business ventures. Sears is one of the most venerable retailers in the U.S. has been operational for more than a century. The company is known to offer quality products to its customers. However, with the pervading influence of new companies in the retail business, Sears has been faced with numerous challenges that have led to its steady decline over the years. Over the past 2 years, the management at Sears seems overwhelmed in handling these challenges. This paper seeks to discuss the leadership challenges and factors that have led to the decline of Sears.
Organizational information.
Established in1886 by Warren Sears, Sears is an American departmental store that retails various products within its many outlets. Although Sears began as a retailer for watches only, the company diversified its products to expand its customer base and established various brands such as Craftsman and Kenmore, among others over time. Up until 1989, Sears was the largest retailer in the U.S in terms of the revenue base, where it was passed by other upcoming retailers such as Wall-Mart and Amazon.
The underlying problem from Edward Lampert’s perspective
According to Calandro (2008), the challenges experienced at Sears have been strongly linked to the organization’s leadership, the most remarkable being the leadership of Edward Lampert. Lampert disengaged the employees in the company’s operations and decision making. For instance, one would see the employees holding tablets, while others do not have the same tablets. Some of the employees felt such tablets are necessary, while others felt they are not necessary. The leadership of Lampert also erred when he decided to divide the company into several business units. These more than 30 units made it very difficult for the organization to manage and coordinate. Moreover, the many units made it harder to determine which unit was performing and underperforming, thereby making it difficult for Sears’ leadership to support innovation.
Key causes of Sears decline
By not setting a clear organizational strategy, Sears’ leadership strayed from innovation, which allowed competitors to attract Sears’s loyal customers to their organization. When the retail environment began to change in the 1990s, Sears began to lag as Walmart and Kmart took off. This lack of agility in responding to change with innovative agility led to a retention of the old bureaucratic methods marked by overhead costs and catalog prices that existed for a long while. Other causes of Sears decline include the sale of its more than $30 billion credit card portfolio to Citibank in 2003 and a merger with K Mart, a company coming out of bankruptcy.
Total Quality Management utilization
Total quality management refers to a continual process of detecting and reducing or eliminating manufacturing errors, streamlining supply chain management, and improving customer experience by ensuring that employees are up to speed with training. Although Sears seemed to have been doing well in utilizing the total quality management approach in running the business, the company fell short in the utilization of total quality management as time went by. For instance, Sears had a proper customer focus initially. It quickly changed from selling its products via mail-order, a method that relied on catalogs to establish standalone urban stores to meet customer’s desire to shop in attractive department stores when people moved from rural areas to cities. However, this nimble trait was not exhibited during the tie when other companies took off with discount shopping, faster delivery, and increased convenience through online shopping.