Mrs Fields Cookies

Situation:

In 1977, Debbi Fields opened her first Mrs. Fields' store in Palto Alto, California. The Mrs. Fields store concept quickly expanded to a national and international level. With more than 500 Mrs. Fields' cookie stores in 25 states and five countries on four continents, Mrs. Fields' Cookies was dependent on a corporate structure that was technologically advanced. The company's organizational strategy included a flat organizational structure feel and a management control system that "put as much decision making and intelligence into the store level PC as is necessary to free the manager to do those things that uniquely people do" (HBS, p.6).

Critical Issue #1: A Flat Organization

In a flat organization structure, "decision making is centralized, with the power often residing in the owner or founder...everyone does whatever needs to be done in order to complete business" (Pearlson, p.65). Typically, entrepreneurial organizations use this type of structure; it is better suited for entrepreneurial type organizations because they usually have fewer employees. As they grow, they carry with them the premise to do whatever is needed to grow the business. The structure also allows quick response in uncertain environments. As organizations grow, and the number of employees increases, a hierarchy is eventually formed (explicitly or not). It is difficult to continue on a flat path, and even though organizations may continue in an entrepreneurial spirit, the reality is work will be conducted in a hierarchical manner. IS plays a role in automating routine work in order to avoid hiring additional workers which is important because as the organization grows and a hierarchy forms, communication becomes more difficult as there are more employees. Typically, top management's time is limited, and an increasing number of employees cannot depend on top management for direction. As a result, IS plays a vital role in communication becoming the glue that ties the organization together.

In the Fields organization, Mr. and Mrs. Fields believed in less hierarchy, stating "the less hierarchy, the better...that with hierarchy, the larger an organization, the more managers turn to managing people and less to managing key business processes" (HBS, p.5). The Fields organization therefore had no official organization chart and "[c]ommunication took place between people as needed, regardless of title or position" (HBS, p.5). Regardless of Randy Fields' efforts to use IT to employ less people (thereby hoping to maintain a flat organization structure), the issue remained that the organization employed 8000 people across the world. The company was facing the growth quandary, and given these facts, it was unlikely the flat organization approach would survive. By the end of 1987, evidence of a hierarchal structure was present. The staff at Fields included store clerks, store managers, district managers that reported to regional directors of operations, who in turn reported to senior regional directors.

Given the Fields' beliefs in organizational structure, the networked organization structure is more fitting for their organization because it integrates characteristics of the hierarchal structures which are "based on the concepts of division of labor, specialization, and unity of command with the flat structures" (HBS, p.63). The austere hierarchies that relay work from the top by segmenting into smaller pieces until it arrives at the level at which it is to be done is replaced by more formal and informal means of communicating, therefore "[n]etworked organizations feel flat and hierarchal at the same time" (Pearlson, p. 67).

Using IS, the Fields organization was able to adopt this form of organization structure, thereby allowing control, improved efficiency and effectiveness, and more timely decision making. For instance, the IS system adopted by the company allowed managers to communicate daily not only by e-mail, but also by voice mail. The system allowed Debbi to return calls and e-mail over the network within 48 hours as she promised, thereby improving efficiency and effectiveness by helping maintain a level of personal involvement between the president and store managers and by allowing the communication of information such as hourly goals, suggestive selling, and sampling. The system also allowed for more timely decision making as attested by Tom Richman:

[e]ven when she isn't there, she's there...in the standards built in the scheduling program, in the hourly goals, in the sampling and suggestive selling, on the phone...technology has 'leveraged' Debbi's ability to project her influence into more stores than she could ever reach effectively without it. (HBS, p.9)

In a networked organization, "extensive use of communications technologies and networks ...renders it easier to coordinate across functional boundaries" (Pearlson, p.68). This is evidenced by the MIS organization at Mrs. Fields'. The MIS organization was divided into financial, sales, micro-systems and operations. It can also be argued that when Mrs. Fields' Holdings, Inc. purchased La Petite Boulangerie and reduced their administrative staff from 53 to 3, this was made possible by absorbing the majority of the functions, including accounting, finance, and human resources into their existing organization. This was undoubtedly made possible by there is evidencing the importance of communication.

Critical Issue #2: IT and Management Control

According to Pearlson, IT "profoundly affects the way managers control their organizations...how people and processes are monitored, evaluated, given feedback, and compensated or rewarded" (Pearlson, p.68). There are five control activities: monitoring, evaluating, providing feedback, compensating and rewarding. Perhaps the three most significant control activities evident in the Fields organization are monitoring, evaluating and providing feedback. IS's role in the management control process is collection, communication, and evaluation of information. Control of people and processes is especially important in the Fields' case as expressed by Debbi Fields:

The business-every business-works in its own quirky ways, and Mrs.

Fields'Cookies was not created specifically to make a profit. I can't imagine a franchisee buying into it for any other reason. And once the profit motive worked its way into a dominant position, it would be downhill. It's a feel good product. It has to be sold in a feel good way.

Mrs.

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