Tanglewood Stores and Staffing Strategy

Introduction

Background Information

The Tanglewood Department Store chain offers customers a wide selection of brands and service in a variety of departments including clothing, appliances, electronics, and home decor. The company occupies the moderate price segment within the general retail store industry. Tanglewood's target market is middle and higher-income consumers.

Tanglewood has adopted an "outdoors" theme to differentiate itself from its competitors. Every store prominently features a large camping and outdoor living section. When we think of a Tanglewood store and their product lines, we think of their signature "simple, elegant, and uncluttered design concepts" (Kammeyer-Mueller 2009, 4).

Founded by best friends Tanner Emerson and Thurston Wood in 1975 and operated as a single store, the store was eventually renamed as Tanglewood in 1984. A focus on unique and quality merchandise and excellent customer service, along with encouraging employees to participate in decision-making was a successful formula for continual growth and profitability. With the acquisition of several smaller department store chains, Tanglewood's business continued to grow into the 1990s and new millennium. And as a result of solid business performance and astute decision-making on the part of management and employees coupled with a loyal customer base, Tanglewood's total number of department stores now constitutes 243 stores across the Western and Southwestern States. Tanner Emerson serves as the CEO and Thurston Wood is the president. A team of regional managers handle the day-to-day operations of the department chain and report directly to Emerson and Wood.

The company would now like to consolidate its human resources strategy and still preserve its successful corporate mission and corporate structure. Tanglewood management has hired external consultants (the author of this document) to support centralization of the company's human resources practices. To begin this centralization process, an assessment of Tanglewood's current operating environment is first required. The company's operating environment is comprised of a number of components, which we will now examine one by one.

Current Operating Environment

Competition and Industry

Tanglewood Department Store is situated within the very competitive nondurable general retail industry in the United States. The entire retail industry is worth over $3 trillion in sales and employs 23 million people. Tanglewood has maintained the highest return on assets (ROA) position in the retail industry. ROA is a measure of how efficiently a company is managing its revenue and how profitable a company is relative to its total assets. "ROA gives an idea as to how efficient management is at using its assets to generate earnings" (Investopedia, 2013, Top of Page).

A look at Tanglewood's Return on Revenue (ROR) shows that the company is only second to Kohl's Department Store. "ROR is a measure of a corporation's profitability that compares net income to revenue" (Investopedia, 2013, Top of Page). As the ROR increases, there is greater net income generated on fewer expenses. Tanglewood's ROI, a measure used to evaluate the efficiency of a number of different investments (Investopedia, 2013, Top of Page) falls in the middle of the with respect to its competitors. Despite this figure being double digits, Tanglewood's closest competition, Kohl's and Target, occupy a similar niche. These two companies profit ratios are quite comparable to Tanglewood's as well.

Competitive Response and Strategy

Just like its closest competitors Kohl's and Target, the Tanglewood customer base is mostly middle and upper tier customers seeking a convenient and memorable shopping experience. Tanglewood's layout and product offering are comparable to other general merchandise retailers. The company differentiates itself from its competitors with a focus on product quality, winning customer service, and its upscale appearance. What's most recognizable about the Tanglewood Retail Brand is the company's use of real wood and natural colours to create its signature outdoorsy look and feel.

To ensure consistency with its brand and signature look, Tanglewood launched a series of proprietary brands. These products are exclusive to Tanglewood and both Emerson and Wood were directly involved in their development. Tanglewood's very own and popular brands include "Burford Kitchen" and Wilderness outfitters.

In addition to Tanglewood's physical stores, the company maintains an exciting online web portal for consumers. Tanglewood's web portal provides an easy and intuitive shopping experience with a vast selection that mirrors its brick and mortar stores. And in an effort to reduce shipping costs, consumers can pick up their merchandise at any Tanglewood physical store location.

Organization Structure

Tanglewood promotes a culture of openness and transparency throughout their operations. Management recognizes the value of empowering and encouraging employees at every level to make suggestions to better operations. Tanglewood values its employees and works hard to retain them. The company recognizes that their core workforce is a key source of competitive advantage, and an essential part of corporate values and culture. Thus, the use of a flexible workforce is kept to a minimum.

Tanglewood stores are divided into 12 geographical regions. Each region is managed by a regional manager, each containing a portfolio of approximately 20 stores with a total workforce of 52,300 employees. Each store is managed by a store manager. All the store managers within one region report to the Regional Managers. What is problematic, however, is the considerable degree of variability upon which the regional managers set their HR practices. Some regional managers have adopted human resources practices that run counter to the policy set by Tanglewood head office. This source of conflicts is one of the major reasons an external consulting firm was hired by senior management to centralize Tanglewood human resource operations.

What follows is an illustration of a typical store's organizational structure. Each store is run by 1 store manager and 3 assistant managers. The remaining supervisory team consists of 17 department managers with 24 shift leaders. There are a total of 170 associates. All told there are 215 employees per store. All employees, whether they are