Organizational Structure
The most common organizational structure for implementing a corporate diversification strategy is the M-form, or multidivisional structure. In the M-form, each business area of the firm is managed through a division, but the names of those divisions may be different. Some common terms you may be more familiar with are companies, business groups, or strategic business units.
One of the major monitoring devices present in an M-form organization is the firm’s board of directors (“BOD”). A firm’s BOD usually consists of 10-15 members drawn from a firm’s top management group and from outside the firm. A firm’s senior executive officer, chief financial officer, and a few other senior executives usually sit on the board, but in most situations, the firm’s top executives are out numbered by other members outside of the firm. Depending on the structure of the firm, the senior executive officer might also be the chairman of the BOD. BODs are typically organized into several subcommittees to further evaluate different levels of the firm. Some of examples of those subcommittees might be: an audit committee, a finance committee, a nominating committee, and a personnel and compensation committee.
Nordstroms organization structure is as follows… Erik Nordstrom is CEO, and Brad Smith is Chairman of the Board of Directors. The BOD consists of the CEO, Mr. Chairman, and 10 additional directors. Aside from the BOD, Nordstrom then breaks out into two additional divisions: N-1 and N-2.
Sourcing from The Official Board, N-1 is made up of 7 additional officers and 7 Executives/Presidents:
- Chief Executive Officer
- Chief Financial Officer
- President & Chief Brand Officer
- COO
- Chief HR Officer
- Chief Merchandising Officer
- Chief Product Officer
- Chief Technology Officer
- Executive VP and Chief Marketing Officer
- Executive VP and President of the Nordstrom Stores
- Executive VP and President: Nordstrom Product Group
- Executive VP: Chief Supply Chain Officer
- Executive VP General Counsel and Corporate Secretary
- President: Nordstrom Rack,
- President: Nordstromrack.com
N-2 is a further breakout of subgroups which tracks back to an N-1 superior and then to the CEO. I will list these subgroups as such: “N-2: N-1 superior”, to better illustrate the connection between divisions in the Nordstrom corporate structure. Please note that not every division of N-1 has a subgroup in N-2. N-2 is comprised of 8 subgroups:
- Senior VP, Store Operations: CFO
- VP, Tax & Treasury: CFO
- SVP, Digital Operations: COO
- VP, Digital Merchandising: COO
- Executive VP and General Merchandise Manager, Cosmetics Division: CMO
- Executive VP and General Merchandise Manager, Women’s Apparel: CMO
- Executive VP and General Merchandise Manager of Shoe Division: CMO
- Chief Information Security Officer and SVP, Technology of Infrastructure and Security Services: CTO
- SVP, Technology: CTO
- VP of Technology, Commerce: CTO
- VP of User Experience: CTO
- VP, Technology: CTO
- SVP, Analytics: EVP, CMO
- SVP of Supply Chain Operations: EVP, CSCO
- VP, Brand Programs: President Nordstrom Rack
- VP, Designer RTW & New Concepts
As you can see, Nordstrom seems to take the term “multidivisional structure” to a whole new level, although these individuals are only comprising roughly 3 divisions. It seems to be working well for the company though and that is the most important part of implementing corporate diversification since it can look different for everyone.
Source: https://www.theofficialboard.com/org-chart/nordstrom
Styled Strategy 