Abercrombie & Fitch (A&F) is a well-established multinational corporation that offers a variety of apparel, personal care products, and accessories for men, women, and children. The ‘global multi-brand omnichannel speciality retailer’ primarily operates wholly-owned stores and direct-to-consumer channels (A&F, 2019). Moreover, the corporation sells its broad product line through several third-party channels, including wholesalers, franchises, and licensing agreements. The company employs a hierarchical functional organizational structure to enhance efficiency in its global retail operations. Human resources are grouped by their speciality in organizations that use this type of structure (Fairfield, 2016). As depicted in the organizational chart, individual employees and teams that perform similar tasks are grouped together based on their specific function. For example, all human resource (HR) personnel, including the Vice President (VP) of HR, the Director of Talent Acquisition and Recruiting, and the VP of Compensation and Benefits, are placed together the HR department along with members of their respective teams. The division of labor applies in all other departments, including marketing, operations, finance, and information technology (IT).
Another defining characteristic of A&F’s organizational structure is the clearly-demarcated chain of command. As evidenced by the chart, power flows the top leadership consisting of the board of directors and chief executive officer (CEO) down to the various vice presidents and general managers through to the rest of the corporation. The top-to-bottom reporting lines, work organization, and division of authority make A&F’s hierarchical structure a centralized organizational structure.
Each of the various roles is related to others and contributes to the overall achievement of the corporation’s strategic business goals and objectives. For instance, the Senior VP and CFO plans, implements, and manages all the finance activities of the various departments in the company. The Chief HR Manager and the various directors are responsible for planning, directing, and coordinating an organization’s administrative functions. Furthermore, they oversee the recruitment, selection, appraisal, training, and compensation of both new and existing staff in all other departments. The Chief Information Officer (CIO) and the IT team ensure that all business units’ technological systems and network run smoothly. For example, the data analytics department works with the Stores & Brand Services and Global Brands units, particularly the sales and marketing teams, in predicting market and consumer trends and behaviors. These relations are integral to making evidence-based decisions and strategies.
Similarly, the General Counsel’s team, including Senior Legal Counsel, Associate General Counsel, and VP Sourcing, act as business partners and corporate officers of the executive management teams in all other business functions. In addition to leading and managing the in-house legal unit, these officers serve as A&F’s representatives when negotiating for strategic transactions and opportunities. The legal team represents HR, accounting, marketing, finance, and other functional areas when dealing with third parties.
The well-defined levels of authority, responsibility, and work specialization provide greater control over business operations, expert advice and efficiency in coordinating across multiple divisions, and faster decision-making (Fairfield, 2016). However, the company may not respond effectively to opportunities and threats in all the markets it operates. A&F operations in five international markets: North America, Europe, Asia Pacific, Middle East, and Africa. A hierarchical, centralized organizational structure may not produce agile responses to trends in these segments because divisions have little discretion in the choices they make (Fairfield, 2016). Therefore, the bureaucratic hurdles could prove detrimental to the global speciality retailer’s productivity by delaying project completion and discouraging risk-taking among employees.
References
Abercrombie & Fitch Corporation (2019). Annual statement 2019.
Fairfield, K. D. (2016). Understanding functional and divisional organizational structure: A classroom exercise. Management Teaching Review, 1(4), 242-251.