Study the Learning from Experience Case on P. 445

The significance of the organizational design of Lowe’s is that is has been created to handle an increased amount of customers and their needs for product diversity. The organizational design is vital in clearly defining the roles of the leaders and the employees who hold the organization together. The organizational design is the process of forming a structure for all the tasks, responsibilities, and authority relationships within an organization. Good organization design should promote the flow of information and speed decision making, clearly define the authority and responsibilities of all employees, and create the desired balance between integration and differentiation to account for responses to changes in the environment. The term departments is used to identify a specialized function within the organization and the term division is generally used to categorize a broader, often autonomous part of an organization. An organizational chart is used to represent the organization’s internal structure showing how many different tasks and functions are interrelated. Lowe’s organization chart shows how the entire organization fits together and who reports whom. It also indicates some gaps or duplication of activities by design. The two primary factors that impact organization design decisions are environmental and strategic factors.

The two main environmental factors that leaders and employees need to be aware of are the characteristics of the present and possible future environments and how those characteristics will affect the organization’s ability to function effectively. The competition between Lowe’s and Home Depot has forced Lowe’s leaders to adopt new ways of thinking about managing their environments. Lowe’s does not want to forget their roots and they are planning to open 150 new stores in rural markets to serve farmers and small business owners. Lowe’s has secured high-quality materials at reasonable prices because they have established...