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a retail-industry veteran, became president in 1992 and undertook to
transform the company into the retailer of choice for younger consumers.
Jeffries quickly managed to attach the brand to an idealized lifestyle,
emphasizing apparel that complemented youth, good looks, and good times.
The transformation turned out to be highly profitable, with sales increasing
from $85 million in 1992 to $165 million in just two years. During the same
period, the number of stores in the chain grew from 36 to 67, and in 1999,
with 212 stores nationwide, A&F topped $1 billion in sales. In the same year,
A&F started its abercrombie division for children and preteens, and a year
later, it launched Hollister, the first of its “lifestyle” chains. By the end of
2002, the multidivision company was running 485 A&F stores, 144 abercrombie
shops, and 32 Hollister outlets. Sales for the year were just under $1 4 billion.
RUEHL opened in 2004 and Gilly Hicks in 2008. Today, A&F Corporation
operates around 1,100 stores.
And yet A&F is still organized as if it were one big company with one big
brand and a single division. The main advantage of this choice can be
explained as a desire to exercise top-down control over each brand by
separating and controlling all the functions on which every brand—that is,
every store type—depends. Regardless of how A&F is organized and
otherwise managed, one thing is clear: It’s the way it is because that’s the
way CEO Jeffries wants it. Jeffries took over a firm that was losing $25 million
a year, declared that survival depended on becoming a “young, hip, spirited
company,” and engineered a reversal of fortunes by turning it into something
completely new, a retailer that celebrates what one observer calls “the vain,
highly constructed male.” (A&F has had much less influence on women’s
fashion.)
Like many other retailers, A&F struggled during 2009 and 2010. The firm had
always refused to discount, so some customers began to look elsewhere. To
help combat the downturn, A&F closed RUEHL and started offering some limited
discounting. These measures, along with the rebounding economy, helped A&F
start to turn things around recently. In 2013, the firm reported sales of $3 5
billion and a modest profit. Jeffries is under contract through 2014 but will likely
retire when the contract expires.
1
All managers need the assistance of others to succeed and so must trust the members
of their team to do their jobs and carry out their responsibilities. And the team
members themselves need the support of their boss and a clear understanding of
their role in the organization. Indeed, the working relationship between managers
and their subordinates is one of the most critical elements comprising an organiza-
tion. As you will see in this chapter, managing the basic frameworks that organiza-
tions use to get their work done—structure and design—is a fundamental part of the
management process.
This chapter, the first of three devoted to organizing, discusses many of the critical
elements of organization structure and design that managers can control. We first iden-
tify and describe the various elements of organizing. Next, we explore how those
elements can be combined to create an overall design for the organization. Next, we
introduce situational factors and how they impact organization design. We conclude by
presenting emerging issues in organization design.
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