Organizational Complexity Analysis of Tiffany & Co.

1: How complex is your organization internally?

Organizational Complexity: Tiffany & Co. does not have a full organizational chart released to the public. The company employs over 13,000 employees (Owler, 2019) with 315 retail locations throughout 29 countries (Tiffany Investor, 2019). Additionally, Tiffany manufactures approximately 60 percent of their own goods at 11 locations (Tiffany Sustainability, 2019).

• 

• 

• 

The only listed employees and organizational structure online was executive management and board members only.

Tiffany & Co. is a complex organization internally as internationality of retailers create fragmented departments (Theodoridis, 2009) due to cultural differences and varying consumer needs (Schwandt, 2009).

Horizontal Differentiation: Tiffany & Co. has seemingly high horizontal differentiation. Though the organization has in upper management seven subunits, the lower tiers employ the remainder of the 13,000 employees in various departments. In searching for employment with the company, the applicant has the option of selecting between 24 different categories (Tiffany Careers, n.d.).

Vertical Differentiation: Tiffany & Co. has seemingly high vertical differentiation. While a comprehensive organizational chart is not available to the public, retail organizations tend to have many levels of hierarchy with many employees as middle management (Theodoridis, 2009). Personal experience within the retail world has shown that within just the sales department the organization typically has at least four layers of middle management between the sales employee and the executive management.

#2: Locate your organization on the figure, what is the complexity?

Symmetric: The prior justifications would place Tiffany & Co. in the upper-right quadrant of the differentiation figure. As a symmetric organization, there are many specialties within the company as well as multiple reporting levels. Retailers, including Tiffany, need to have multiple departments working simultaneously in order to remain cohesive in their business. I would argue that based on my findings some departments within Tiffany could resemble more of a flat organization with low vertical differentiation. However, online company reviews and public consensus show that most of the operations within Tiffany have many layers in the hierarchy.

#3: Does your organization’s complexity fit its structural configuration?

	Type 1	Type 2	Type 3	Type 4
Organizational complexity	Blob	Tall	Flat	Symmetric
Configuration	Simple	Functional	Divisional	Matrix
Environment	Calm	Varied	Locally stormy	Turbulent
Strategy types	Reactor	Defender	Prospector	Analyzer with innovation
Organizational goals	Neither	Efficiency	Effectiveness	Efficiency and Effectiveness

Previous research has shown that Tiffany & Co. tend to have both Type 3 and Type 4 characteristics of environmental complexity. The company is more effective than it is efficient. The industry to include Tiffany is locally stormy and the company is at the forefront of innovation and analyzes the upcoming challenges and adjusts strategy accordingly. Knowing that the company is back and forth between the two types affirms that the organizational complexity can be defined as symmetric with some flat departments.

Matrix: Due to the great scale of Tiffany & Co. across international borders, the company is a matrix configuration. The company has many individualized compartments that are specialized in specific products and regions (Schwandt, 2009). Companies that utilize matrix structures are often the most complex due to their dependency on other departments as well as reporting often is expected to several departments as opposed to just one (Schwandt, 2009).

#4: Is there “fit” across the organization’s components?

There is not currently a fit across all the components. The company does not appear to have a standardization to fit within one type. Many times, the company could be argued into Type 3 or Type 4 depending upon the angle the investigator is taking.

What do we know now about how our organization aligns across these categories?

Tiffany & Co. is constantly trying to remain its position as a top luxury retailer. The company is aware that resources may be dwindling and therefore pushes its sustainability agenda (Tiffany Sustainability, 2019). The advancement of e-commerce has been rocky for all retailers and Tiffany attempts to keep up with the unfamiliar terrain (Tiffany Investor, 2018). The organizational model of retailers is traditionally divisional (Theodoridis, 2009) though a matrix configuration would likely survive better in technologically advancing market (Schwandt, 2009).

What would make them more effective?

The greatest challenge that seems to face Tiffany is the unpredictability of the upcoming technological advances. The advances in technology have made the upcoming generations more aware than their predecessors of alternatives and sustainability. This has made the company innovate and become effective in surviving with this generation, but it remains to be seen if their efforts are at all efficient in maintaining their status as one of the top luxury retailers as they try to appeal to the new market.

Should your organization change its structure based on its complexity? Based on the limited amount of information that is publicly available on the Tiffany & Co. organizational structure, it is difficult to really analyze if changes need to be made at this time. The sectors of the organization that are still in the divisional mindset would do well to move towards a matrix configuration as it seems that the organization would like to see itself all within the Type 4 category. The company appears to, for the time being, to be successfully maneuvering through the storminess of their environment. Though complacency in the organizational structure could be the demise of the 180-year-old company.

References

Owler, Inc. (2019). Tiffany’s competitors, revenue, number of employees, funding and acquisitions. Owler, Inc. Retrieved from https://www.owler.com/company/tiffany

Theodoridis, C. (2009, May 2). Complexity in retail organisations: an empirically informed discussion with particular reference to retail location strategy. Manchester Metropolitan University. Retireved from https://pdfs.semanticscholar.org/819a/3808788138016e236149331d1587853019d0.pdf

Tiffany Careers. (n.d.) Tiffany & Co. Careers. Retrieved from https://www.tiffanycareers.com/

Tiffany Investor. (2019). Tiffany & Co. Investor. Retrieved from https://investor.tiffany.com

Tiffany Investor. (2018). Tiffany 7 Co. Year-End Report 2017. Annual Report on Form 10-K for the fiscal year ended January 31, 2018. Retrieved from https://investor.tiffany.com/static-files/6b06ec33-3f12-4f0f-a908-b90dbc2db82a

Tiffany Sustainability. (2019). Tiffany & Co. Sustainability. Retrieved from https://www.tiffany.com/sustainability

Schwandt, A. (2009, July 20). Measuring organizational complexity and its impact on organizational performance – a comprehensive conceptual model and empirical study. Technical University of Berlin. Retrieved from https://d-nb.info/1000048349/34   pg93