Question

Read case 1 of the Tanglewood casebook. Review the thirteen Strategic Staffing decisions, and the material you have read about Tanglewood. Then consider each of the decisions and briefly indicate which way you think Tanglewood should position itself along the continuum and why. For example, the first decision is to develop or acquire talent. Indicate whether you think it is best for Tanglewood to focus more on acquiring talent internally or externally, and why? Repeat this process for each of the staffing level and staffing quality dimensions.

EXHIBIT 1.7 Strategic Staffing Decisions Staffing Levels

• Acquire or Develop Talent

• Hire Yourself or Outsource

• External or Internal Hiring

• Core or Flexible Workforce

• Hire or Retain

• National or Global

• Attract or Relocate

• Overstaff or Understaff

• Short- or Long-Term Focus Staffing Quality

• Person/Job or Person/Organization Match

• Specific or General KSAOs

• Exceptional or Acceptable Workforce Quality

• Active or Passive Diversity

Number your paper 1-13. EXAMPLE for decision “1. ACQUIRE or DEVELOP talent: I recommend developing talent because...”

CASE ONE: TANGLEWOOD STORES AND STAFFING STRATEGY

Section Objectives

The goal of this section is to help you learn more about the basic environmental concerns the Tanglewood Department Store chain is facing. This information will help you to understand how competition, strategy, and culture jointly inform the effective development of a selection plan.   Organization Overview and Mission

Tanglewood is a chain of general retail stores featuring items such as clothing, appliances, electronics, and home decor. The company operates in the moderate price niche, targeting middle- and upper-income customers. Tanglewood’s strategic distinction is an “outdoors” theme, with a large camping and outdoor living section in every store. The store also distinguishes itself by its simple, elegant, and uncluttered design concepts for the store and their in-house products. The company’s mission statement is:

Tanglewood will be the best department store for customers seeking quality, durability, and value for all aspects of their active lives. We are committed as a company to providing maximum value to our customers, shareholders, and employees. We will accomplish this goal by adhering to the core values of responsible financial management, clear and honest communication, and always keeping performance and customer service in the forefront

Tanglewood was originally founded in 1975 by best friends Tanner Emerson and Thurston Wood. The initial concept was a single store in Spokane Washington, named TannerWood, which sold a combination of outdoor clothing and equipment that the pair had designed themselves. The employee handbook notes that, “Tanner and Thurston financed their early store plans with credit cards and personal loans from friends and family. They had so little money that they slept in sleeping bags in the back room and put every penny they made back into the stores.” The first store’s unique merchandise offering, and personable sales staff made them successful quite rapidly, allowing Emerson and Wood to move out of the back room and add several more stores during the late 1970’s. The merchandise offerings expanded over time to incorporate more conventional retail items, while still retaining the elegant, yet outdoors look for the stores overall.

Emerson and Wood eventually decided to rename their store chain Tanglewood in 1984. Much more rapid growth began around this time. As Emerson put it, “we worried for a long time that expanding would compromise our vision of a small, personable shopping experience. We had always wanted to run the type of store that we would love to work and shop at. Around 1984, after we had 10 stores, we realized we had developed a successful blueprint for running stores with a strong base of employee participation, customer satisfaction, and profitability. So, we decided to spread out to cover the northwest.”

During the 1990’s the expansion strategy really took root. Most of the expansion occurred by purchasing other existing stores rather than building new stores. Emerson and Wood had been heavily involved in the management of the stores but found that increasingly the corporate administration was a more pressing concern. The company arrived at a regional structure for its operations. Emerson and Wood took on the positions of CEO and President of the company, respectively, while a team of regional managers more directly oversee day to day operations. The company currently has a total of 243 stores open in the states of Washington, Oregon, Northern California, Idaho, Montana, Wyoming, Colorado, Utah, Nevada, New Mexico, and Arizona.

Prior to any further expansion, however, the company needs to consolidate its current management strategy. The process of growth has been very quick in the last 5 years and has involved buyouts of several smaller chains of department stores. While all the stores under the Tanglewood name have the same basic look, the management styles and human resource (HR) practices still reflect the historical differences between stores. Wood noted in a recent interview with Business Monthly, “Tanglewood really needs to slow down and take a hard look at our corporate culture. Right now, we need to consolidate and make sure we’re as close to the company’s original mission as we can be. Our success is due entirely to our strong culture—this is something we need to hold on to.” These concerns have lead Tanglewood to bring in external human resources consultants like you to help centralize the organization’s practices.

The brick-and-mortar stores have been extensively expanded through the use of an online order portal, starting in the early 2000’s. The emerging plan for Tanglewood has been to continue to offer both the online and in-store experience, while maintaining a focus on their physical store locations as a competitive advantage. Because the company has always emphasized customer service, and they have found that in-store sales tend to generate longer-term revenue streams as customers form personal relationships with expert salespeople, online sales are a supplement to, but not a replacement for the in-store experience. Tanglewood does offer extensive in-store pickup options and assistance for any customer who purchases items online. In-store returns with immediate replacement for most items are also allowed, even if the items were purchased online. Because online sales are not considered a core area of competitive advantage for Tanglewood, the day-today administration of the online sales function was outsourced several years ago.

Another major concern for Tanglewood has been the westward expansion of companies like Kohl’s and Target. The possibility of more direct competition has lead Tanglewood to critically examine their HR policies and practices. For staffing, in particular, the organization feels there absolutely must be a workforce of committed, qualified individuals who will help carry the Tanglewood philosophy into the future.

Competition and Industry1

The Tanglewood Department Store chain operates in the nondurable general retail industry, which fits into industry 45211 as classified by the North American Industry Classification System (NAICS). This industry engages in the sale of consumer goods including clothing, small appliances, electronics, and other housewares. The retail industry accounts for over $4 trillion in annual sales. Recent estimates indicate that the retail industry employs approximately 15 million people.

A comparison of several top retail stores and outlets is presented below. Note that although LL Bean has few physical stores and none in the areas where Tanglewood operates, it is a direct competitor in terms of products offered. The operating revenues indicate total sales for these organizations, and the growth rate tracks changes in the sales for each retail chain. The financials show that Tanglewood is a moderately sized organization with solid growth potential.

Competitive Response and Strategy

The company’s specific niche is similar to that occupied by Kohl’s or Target, appealing to middle- and upper-income consumers looking for convenience and reasonable prices. This means that Tanglewood uses a layout and provides the same products offered of general merchandise retailers. Tanglewood also focuses on stocking quality products, providing customer service, and a more designer appearance than discount stores. This strategy is further supplemented by the company’s trademark “look” which involves an outdoors theme, complete with real wood décor and use of natural colors.

Like its competitors, Tanglewood has developed several proprietary brands of merchandise which are designed to complement its look. While the actual products are made by subcontractors, Emerson and Wood have personal responsibility for all products that are produced. Their own brands include Burford Kitchen, which includes woodaccented, rustic, sturdy kitchen utensils, and Wilderness Outfitter clothing and camping goods lines. The stores also have emphasized small home electronics, housewares, and bedding accessories.

Despite the company’s effort to emphasize its western appearance and theme, there is no shortage of high-technology innovations in the way that Tanglewood operates. As noted previously, they have worked hard to ensure that their web portals provide a clear guide to merchandise available in the stores. Through their “County Store” concept they have also made their stores a pick-up location for items ordered online. This allows them to utilize their low-cost shipping arrangements to the benefit of customers. Emerson notes, “We have a lot of consumers in places like rural Idaho, who don’t want to drive an hour to one of our stores and then find out what they wanted isn’t available. The online County Store makes sure that if they want something, we will have it in stock.” In addition, online shoppers who visit bricks-and-mortar locations also often buy other merchandise in the stores.

Organizational Structure

The structure of most retail stores is relatively similar, and Tanglewood has essentially evolved to have a structure that looks something like the familiar organizational hierarchy. This appearance is deceptive, because employees at all levels of the corporation are encouraged to make suggestions regarding operations. More than one major operational change has come from an employee suggestion.

Each store is managed by a single individual who has three assistant store managers working beneath him or her. The Assistant Manager for Softlines is in charge of all areas related to clothing and jewelry. The Assistant Manager for Hardlines is in charge of all non-clothing merchandise, including sporting goods, bath, bedding, and home decor. Another way to think of the distinction is that Softlines consists only of things that are worn, while Hardlines consists of nothing that is worn. The Assistant Manager for Operations and Human Resources is primarily responsible for activities, including security, clerical work, merchandise loading and warehousing, cashiers, and human resources management. Although the Assistant Manager for Operations is technically in charge of the smallest number of employees, this tends to be a more powerful position because it includes more managerial responsibilities, including staffing the store and training new hires. Department managers are in charge of specific product groups such as electronics, women’s clothing, or shoes. For each shift there is also a designated shift leader who completes most of the same tasks as store associates, but also has some administrative responsibility.

Overall, with 1 store manager, 3 assistant managers, 17 department managers, approximately 24 shift leaders, and approximately 170 associates, there are around 215 employees per store. All employees, full or part time, are members of the core work force. Tanglewood does not extensively use a flexible workforce, such as temporary employees. A core workforce is viewed as essential for the organizational values and culture, described below, that Tanglewood seeks to develop and maintain.

Stores are organized into 12 geographical regions, with approximately 20 stores per region. Each region has a regional manager who oversees operations of the stores. The store managers report directly to the regional managers. There is considerable variation between regional managers in how they run their HR practices. The tendency for some regional managers to encourage human resources practices which are counter to the Tanglewood philosophy is a major reason that an external consulting firm was brought in to centralize human resources.

Organizational Culture and Values

Whereas many elements of the Tanglewood operational plan have been based on other firms within the retail industry, the company’s culture and values are distinct from most of its major competitors. From its inception, this company has emphasized employee participation and teams. At orientation, every employee hears the philosophy that Wood and Emerson proclaimed as their vision for employee relations, “If you tell someone exactly what to do, you’re only getting half an employee. If you give someone the space to make their own decisions, you’re getting a whole person.”

Most retail stores have a strict hierarchy with assistant store managers providing directives to their subordinates, and most associates’ primarily follow orders. Tanglewood, on the other hand, has allowed each department manager to formulate distinct methods for running their departments in coordination with the employees they supervise. There is still a well-defined ordering of job responsibilities, but efforts are made to involve employees in the decision process when possible.

One of the most important cultural elements of the organization is an emphasis on “straight talk” in all areas of the business. The company provides employees with information on the company’s share price and overall profitability for each quarter, along with other details about company activities. Profit-sharing for all employees is part of the company’s push to encourage employees to think like managers. In addition, mandatory weekly store meetings (one meeting for each shift) give employees a specific time to voice their suggestions for in-store improvements. Associates who make suggestions that are implemented by management receive financial bonuses. Department managers are also given financial incentives for successfully developing and implementing new policies and procedures, further reinforcing the participatory management style of the company.

Every shift is run based on a team concept. While the most senior associate is designated as a shift leader, the other members of the team are encouraged to provide ongoing suggestions. All employees share all tasks, so there are no designated “customer contact” or “display” employees. It is also expected that associates will make themselves available to help the other members of the team. Quarterly performance evaluations include several items specifically reflecting the associates’ interactions with other team members and initiative to improve the department.

Because of the heavy emphasis on employee suggestions, Tanglewood’s upper managers have ample opportunity to observe the leadership and decision making qualities of their associates. This is one of the main portals through which promotion and advancement are achieved. All new employees without retail experience, even those with college degrees who are targeted as having management potential, spend a period of time working in the store as an associate. This is seen as a way of preserving the company’s unique culture and values over time.

The basic structure for human resources at Tanglewood involves both corporate and store-level components. The corporate Staffing Services function, shown above, is a division of the Human Resources Department. The Staffing Services Director supervises three managers (for the areas of retention, recruiting, and selection), plus an Equal Employment Opportunity Coordinator. The corporate Staffing Services function performs data analysis and design of staffing policies and programs. Data regarding recruiting practices, methods for interviewing, testing and selecting employees, and employee turnover are sent from the individual store to the corporate headquarters. At headquarters, the data are collected and statistically analyzed. Based on these analyses, specific recommendations are provided to the stores. For example, after data suggested that newspaper advertising for new recruits was becoming less and less cost effective, all stores were given a strong recommendation to switch to an internet-based strategy. As another example, the employee selection specialists in the corporate staffing function developed a format for interviews that is now used as a part of the hiring process for nearly all stores.

Each store is responsible for implementing recommendations provided by corporate. The store operations and human resources manager is responsible for overseeing each store’s staffing, training, performance management, and equal employment opportunity practices. As pertains to staffing, the manager of operations and human resources is responsible for planning, recruitment, and initial screening. Department managers interview finalists, then hiring decisions are made in conjunction with the assistant store managers. Promotion decisions up to the department manager level are made within the stores. Regional managers conduct the hiring for store managers, and work with each store’s managers to determine promotions to the assistant store manager.

Historically, the corporate staffing function has not been strong. Because of the participatory philosophy of the stores, the role of corporate HR was primarily to act as an advisor to each regional manager. The company’s plans for expansion have led to a change in this philosophy of late. Emerson’s directive to HR for this year is, “help us to develop a plan, a way of using all our human assets in the service of our philosophy, our customers, and our employees.” As the company expands, the need for a central planning body in staffing is seen as an important way to maintain the distinctive “flavor” of the Tanglewood experience. In addition, the sheer number of stores means that local leadership is becoming inefficient. Centralization will also serve to create staffing operations efficiencies.

Your role

Your role within Tanglewood is as an external consultant for staffing services. You will report directly to Daryl Perrone, who is the Staffing Services Director, with final oversight for your work coming from Marilyn Gonzalez, who is the Vice President for Human Resources. Both of these individuals were recently hired personally by Emerson and Wood as part of their plan to centralize and improve the human resources function. Perrone has extensive experience in managing staffing for department stores in New Jersey and New York, while Gonzalez has worked in a variety of corporate positions in the Pacific Northwest.

The reports that you produce will be given to Perrone and Gonzalez, who will disseminate them throughout the organization. As such, although Perrone, Gonzalez, and other members of the human resources team are generally well versed in the terminology of staffing, the other individuals who read you reports will not be so familiar with the specific staffing terminology. This means that your reports should not contain excessive staffing terminology, and that when you do use specific staffing terms you should provide a brief explanation

Answer 1

• Acquire or Develop Talent
  • I would recommend that Tanglewood must opt for acquiring talent. This is because already the workforce of the company is engaged in critical activities. Hiring a talent gets a fresh perspective in the organization.
• Hire Yourself or Outsource
  • As the employees of the company are major contributors in decision-making, it will be a better idea that the company hires by itself rather than outsourcing. The employees of the company will be more competent in selecting the right fit candidate for the company.
• External or Internal Hiring
  • In my views, priority can be given to internal hiring. This way, the existing employees also feel valued and engaged. Also, the recommended candidates of the employees will stay longer with the company.
• Core or Flexible Workforce
  • I would recommend Tanglewood to have core workforce. This is because the core workforce will be able to handle the core functions of the company in a better way.
• Hire or Retain
  • Retaining employees is quite essential for any company as the experienced employees of the company are its assets. The company must try to keep the attrition as low as possible.
• National or Global
  • Tanglewood has been doing well in the national domains. In my views, the company can now opt for expansion in the global market. This will help in increasing the market hold of the company as well.
• Attract or Relocate
  • Tanglewood has a niche market segmenting. So it will be appropriate for the company to opt for attracting talent. the consumers will be able to relate and connect well with the locally hired workforce.
• Overstaff or Understaff
  • For a company like Tanglewood, overstaffing will not pose much problem as understaffing might do. The company needs to attend to the requirements of the consumers. Hence appropriate quantity of staff must be present to handle all consumer’s demands and issues.
• Short- or Long-Term Focus Staffing Quality
  • As the employees of the company participate in critical decision-making, it is essential that the company must opt for long-term focus staffing quality.
• Person/Job or Person/Organization Match
  • In companies like Tanglewood where employees are given so much autonomy and are valued, hence it will be critical that any new hire must be a person-organization fit for the company. An employee who is able to relate with the values and culture of the organization, will be able to have a better inclination in the strategic operations of the company.
• Specific or General KSAOs
  • Retail industry will not have any specific skill requirements. Hence, Tanglewood must focus on the General KSAOs rather than the specific ones.
• Exceptional or Acceptable Workforce Quality
  • As major employees of the company will be interacting with the consumers, the quality of the workforce must be exceptional.
• Active or Passive Diversity
  • Tanglewood is a retail company, which will be dealing with diverse consumer sets. So an active and diverse workforce will be able to handle the requirements of the consumers effectively.