Organizational Consultation
Background
Aldi is a German-based grocery chain of stores that was established in 1946. The grocery store was established by two brothers Karl and Thomas. The company was split into two in 1960 into Aldi Nord and Aldi Sud; however, the companies still trade under the same name and appear to be one when negotiating for contracts and in the similarity of their store brands. The company has grown over the years from two stores to more than 10,000 stores in 20 countries with a net turn over value of more than $ 60 billion in 2018. In Germany, the company operates in more than 2500 stores in northern, eastern, and western Germany. The company also has over 1600 stores in the south and western Germany. The company has increased its scope of business and has turned to a multinational corporation with branches in Portugal, China, Switzerland, the United Kingdom, the United States, and Austria. The reunification of Germany and the fall of the Iron curtain were a great boost to the expansion of business by the company. With the technological advancements in the world, the company has continued to grow and will still have prospects of international growth to a larger market scope.
Division of labor
Division of labor entails the assignment of tasks to the best fit organizational employees for the tasks to ensure efficiency in carrying out organizational activities, which, in turn, leads to organizational profitability and growth. All companies in the food industry require division of labor to satisfy the large customer base and as well remain competitive with the organizational competitors. Aldi has continually employed division of labor in carrying out various organizational tasks ranging from marketing to sales promotion of their products, and this can be attributed to the positive growth in revenue of the food supply chain store over the past ten years. In the past five years, there has been an increase in efficiency in the food industry, with many of the firms struggling to satisfy the changing consumer needs of moving towards healthier foods. As well, there has been an increase in the number of food stores in the world, thereby making the already established firms re-innovate their preexisting strategies to help them compete favorably with the new entrants into the market. Competition is high in the food industry due to the homogeneity of products and the possession of information on the products, thereby giving them a wider range of choices to pick from. The changing health trends driving people to more natural foods have become an opportunity for Aldi, which has utilized the opportunity to maximize its customer base. With an increase in the number of customers and increased need for efficiency, the company has segmented its work into different groupings to help people work in the fields they can perform best in thereby leading to higher quality output, in the right quantities and at the right time to avoid stock-outs. Due to the division of labor in the firm, the employees settle for the tasks they know best and enjoy carrying out. This, in turn, leads to efficiency in working and employee motivation, thereby leading to hyped employee productivity. Besides the division of labor in the firm, the employees of Aldi are trained to multi-functionally perform when need be, thus gaining a greater competitive advantage compared to its competitors who specialize in the pure division of labor.
Success
The success of Aldi can be attributed to the strategic alignment of the company towards achieving its objectives. The organization has over the years grown from a small grocery store to a multimillion-dollar chain of stores operating in the whole world. Aldi also has, in the last five years, diversified its product range from low-cost products to luxurious products to attract high-income customers into their stores. The store, for instance, in 2019, included Christmas cakes and turkeys for their customers. The continued success of the food supply chain can be attributed to factors such as location and layout, pricing, diversification of product range, and the shopper experience. Aldi often positions itself next to M&S, where there are a large number of customers to help in the accessibility of the retail shops by the customers visiting M&S. In comparison to its competitors, for instance, Walmart, Aldi prices its products at a relatively lower price, a move that has made the competitors reprice their products to meet the firm’s low prices. Pricing helps to popularize the company with the price-sensitive population, thus adding to the organizational customer base. Aldi has, in the past five years, diversified its product range and introduced products such as luxury products to lure high-end customers into the food store. Also, the sales and the after-sale services given to customers at the food supply chain store leads to positive customer experiences, therefore, making the customers revisit the food store for shopping repeatedly. The success of the company can also be attributed to the well-defined organizational structures and the proper communication systems in the organization and hence suppressing any conflicts between the organizational employees.
Learning
Aldi facilitates the training of its new employees to help them fit into the organizational culture. The company holds training sessions for the new employees training them on the culture, the mission, and the vision of the organization. Also, the employees are trained on the various job segments in the firm to enable them to step into any given job need arises. Through training, the employees of the company are aligned towards achieving the strategic organizational objectives and, at the end leading to group cohesiveness. Team building is an important part of the Aldi food store. The employees are divided into functional groups and assigned tasks that are timed to ensure that efficiency amongst the employees is observed. The company employs the behavioral theory of leadership and believe that the team leaders are not born but made and through training, the best leaders for the various functional groups, for instance, the research and development department, the sales department, the accounting department, and the procurement department are made through training the employees. Reprimand is used in the company to thwart poor performance, therefore, making the organizational employees to be geared towards achieving the set objectives to avert reprimand. The company has put in place measures to evaluate their employee performance to ensure that the employees achieve the set organizational objectives.
Organizational life
According to Martin, an employee of the Aldi company, working at the company is stressful and tedious but yet very enjoyable. Joy, another employee of Aldi, poised that working at the company, presented her with the best opportunity to pursue her carrier as a marketer. She highlighted that at first, she felt nervous working at the industry due to the stringent guidelines and the strict code of ethics in working at the company. She, however, retaliates that through the staff training programs initiated by the company, most of the employees fit in well and coexist peacefully with each other. The company motivates its employees through the provision of gift hampers to the best performers. Also, the company values vacation time and observes it strictly to ensure that the employees remain motivated and in good shape to work towards achieving the set organizational objectives. According to Joy, the organization understands the employees’ rights and maintains the rights adequately.
Section Two
Values
Aldi Company believes in three core values that is consistency, simplicity, and responsibility. In line with consistency, the company is reliable in its operations. It is consistent in its product lines, customer satisfaction, and pricing of its products. Regarding simplicity, the company has a well-defined plan of activities to ensure that its employees and customers have a clear direction on the handling of various organizational activities to avoid conflict that may arise from such unplanned activities of the organization. Also, the company is responsible for its operations. It adheres to the set guidelines and the various government regulations in the industry. The company is also involved in corporate social responsibility programs in various countries and work towards environmental conservation and community development. The core principles guiding the company include openness, fairness, service standards, honesty, and friendliness. According to Ben, a sales manager at Aldi, the employees are well trained regarding the core values of the company and thus are conversant about the various processes and, in turn, are motivated towards achieving set organizational objectives.
Motivation
Aldi Company emphasizes on employee motivation as a core attribute to achieving the set organizational objectives. Motivated employees give better results compared to non-motivated employees, and thus Aldi utilizes this strength to outperform its competitors. According to Mark, a software engineer at the company, the company motivates the employees through pay and benefits, wellbeing, the offering of equal opportunities to all employees, training, and development, and gender pay. Aldi company is committed to the health and wellness of their employees. The managers of the firm are also trained in wellness to actively support their teams effectively. Aldi makes payments to its employees without consideration of gender to ensure that all the organizational employees are motivated. Also, the organization gives equal opportunities to all its employees without bias to motivate the various organizational employees to work efficiently and earn promotions. According to Joy, employees in the company besides the organizational motivation are self-motivated, therefore simplifying the entire business process.
Section 3
At Aldi, teamwork is highly important for organizational success. There is cohesive teamwork among the employees and the associates that have ensured the firm receives supplies within the appropriate time and match them with the customers’ demands to ensure the firm there is job satisfaction among different employees working at Aldi.
How Teams and groups are organized and managed by the organization
The organizational design that Aldi has adopted best explains the kind of teamwork that exists within Aldi. Aldi Stores aggressively uses three organizational tools to ensure the goals of the firm are achieved. This includes: empowerment of the workforce and encouraging them to come up with decisions that support systems and encourage employees to be innovative and creative when formulating solutions to the problems that the employees face within the firm. Aldi has succeeded in giving the team a sense of ownership and responsibility to ensure there is job satisfaction among the employees to guarantee the firm higher productivity at no extra costs.
Conflicts
Conflicts are part of any organization, and sometimes, it is said, it is better to disagree to agree. Like any other organization, there are various mechanisms put in place to solve organizational conflicts when they arise within Aldi. The firm uses mediation as one way of solving the conflict that may arise among the employees. In this case, whenever there is a conflict among the employees, the managers will appoint a mediator to listen to parties to the dispute and come up with the best method possible to solve the conflict. However, since employees understand their role, instances of conflict are few as the focus is on delivering on the organizational goals.
How the Organization Express Characteristics of effective team members
At Aldi, most decisions are made through consensus. However, this takes place upon detailed discussion among the employees, with each employee being involved in all the decision making processes that take place within the organization. As one way of improving team dynamics, the managers often sign duties in groups and give the employees time to discuss and come up with solutions to some of the problems that they face. Solutions to the problems that the organization face do not come from the top-level managers but, in most cases, come from the people at the lower level because they are the people in charge of most of the activities that take place in the organization.
However, the ultimate decisions are made at the top, although this takes place after discussion with the employees as the kind of leadership model exhibited by the firm is a two-way structure where information flow from top to bottom and bottom to top with key decisions made at the top. As a result, the firm exhibits bureaucracy where the employees are expected to adhere to the set rules and regulations of the firm.
Section 4
How power is distributed at Aldi
The managers at the top of the organizations control most of the activities that take place in the organization. As a result, almost all powers of the organization belong to the people at the top of the organization. The managers have the power to influence, coerce, reward, punish, motivate, and inform other members of what takes place within the organization. However, power is distributed to associates through delegation of duties based on individuals’ capabilities, skills, and ability to deliver and meet the set deadline. As a result, employees at Aldi, virtually have no power because most of the decisions are made by people at the top of the organization.
Leadership and Management
There is a sharp difference between leadership and management. However, for this organization, leadership and management are one thing altogether because the leaders are the managers of the firm. Leadership and management of Aldi are based on the Henry Fayol Management principle that defines management as the process of planning, organizing, leading, and controlling the resources of the firm effectively and efficiently to achieve organizational goals. As the leaders at the top of the organization play a critical role in ensuring management functions of the firms are met and within the set deadlines. Managers of the firm have more experience and perform different duties within the firm as they use their powers to ensure organization activities are performed as scheduled. Within the organization, there are team leaders that seem to have a lot of personal power and linked to the strong teamwork exhibited by the employees at the different organizational level of the firm. The team leaders are good are motivating other employees and staff to remain focus on pushing organizational agenda.
Section 5
Organizational Culture at Aldi
Aldi has a strong organizational culture centered on cooperative leadership among the employees. The organization culture of this retail store consists of maintaining a focus on developing people towards a common goal and ensuring the employees are assigned duties within their specific job descriptions to ensure the firm achieves ultimate productivity and efficiency in the control of the resources that the firm possesses. The company structure is extremely flat, and only a few steps separate the top and the bottom level of management. However, the whole success of the firm depends on a lot of the kind of teamwork that exists within the firm and the regular meetings held to determine the business strategies of the firm.
Team leaders are meant to bridge the gap between those at the top of the management and associates. The associates are often stressed due to pressure placed on them to perform, and this is where the role of leaders comes in place. The leaders are expected to inspire performance and make all the employees feel part of the firm. The team leaders expect everyone to engage in prosocial behavior and assume that everyone is a commitment to work towards the achievement of the set goals. Since associates are different from one another, their level of performance is closely associated with the level of motivation that they receive from the team leaders and the people at the top of the organization. With a high level of motivation, even the most rigid associates are likely to give their best for the success of the firm.
One important thing about this organization is that division of labor starts at district managers and ends with associates with each individual having a distinct role to perform towards the achievement of the organization goal. Despite the market growth of Aldi across different markets, associates do not seem satisfied with their work environment. They are willing to work through teamwork to ensure organizational goals are met within the set deadlines, but the work environment seems not supportive. Some of the issues raised include lack of recognition, being denied more powers to participate in the decision-making process, and lack of effective communication within the organization. As a result, associates have often felt that their efforts are not appreciated as other employees, and the reason why forming a cohesive team among the employees has become hard to achieve at all different levels of the firm.
References
Gelfand, M. J., Aycan, Z., Erez, M., & Leung, K. (2017). Cross-cultural industrial-organizational psychology and organizational behavior: A hundred-year journey. Journal of Applied Psychology, 102(3), 514.