FREE ESSAY ON ARTICLE REVIEW - ORGANIZATION

ARTICLE REVIEW - ORGANIZATION

Concept: Organizing
Wright Time
Richfoods Turns to Supervalu After Stock Hit
Pg. 42-43
Corporate Report
March 2000
Organizing is the process of developing functional departments within a company that are
assigned tasks and provided resource to perform activities that are consistent with the
companies strategic goals. Supervalu, the nations largest grocery distributor recognized
the need to structure their organization in a way that allows them to continue their
success. They have identified competing companies who share similar organizational
structures and have acquired them. By focusing on the organizational structure Supervalu
has been able to successfully merge and acquire companies without major human resource
issues that are common in these activities. 
The Grand Strategy of Growth is being pursued by Supervalu. Growth is defined as
continuing to strive for new or better products or markets rather than solely focusing on
existing business. Supervalu is achieving growth by identifying companies that are
similarly organized and merging/acquiring them. By choosing organizations that are
similar, it allows Supervalu to expedite the merger/acquisition process and continue to
grow rather than focusing on internal issues.
By merging similar cultures and continuing to organize into retail entities Supervalu has
the purpose of Value Creation. They acquired Richfoods to help fill a geographic void in
Supervalu's operations. By merging with a company that shared a similar structure very
little of the value created was lost on the merger and could therefore be passed on to
profits.
As with most organizations of this size, the true structure is defined at the
Corporate-Level. Supervalu could have chosen to roll all of Richfoods services into
existing business units, however they have remained somewhat separate and therefore more
in touch with the customers they serve. This Geographic structure is more effective than
other organizational models.
Supervalu developed this model in response to an External Opportunity that presented
itself. Richfoods was struggling financially and became an attractive target for
Supervalu. The organizational structure made the merger quicker and easier to finalize.
Supervalu's structure may seem diverse therefore making it difficult to compete on the
basis of cost leadership however, the internal systems that they have developed provide
staff services throughout the organization. Specifically, Supervalu is an industry leader
in the Electronic Data Interchange field. The can link all stores in terms of sales and
distribution whch leads to cost savings. 
Without the leadership of Mike Wright, Chairman, President and CEO of Supervalu in
developing the organization it would not have been possible to merge these two
organizations so effectively.