Toms Shoes Company’s Organizational Structure

Subject: Company Analysis
Pages: 5
Words: 1449
Reading time:
6 min
Study level: College

Introduction

Standards TOMS Shoes is an American apparel organization with a worldwide market. The company is renowned for pioneering the ‘One for One’ philanthropic mission that accounts for its immeasurable success. TOMS is a 2006 entity headquartered in Santa Monica, California. The business belongs to Blake Mycoskie, an American ailing from Texas. TOMS is a medium-size company whose success attracts a significant following from the public and the business fraternity. The company’s ‘One for One vision is the reason behind the donation of over two million pairs of shoes and eyeglasses in over thirty countries. The idea of operating TOMS the way it does and the many accomplishment stories associated with the entity have significant implications for its management. That is why the present work delves into TOMS’ organizational structure to reveal the outstanding elements responsible for the organization’s rare performance.

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Organization Description: TOMS Shoes

TOMS Shoes is an American organization known for donating pairs of shoes to the needy to avert poverty and social injustice. It was started in 2006 by Blake Mycoskie after visiting Argentina and observing many children who left school due to a limb-associated illness preventable and curable by wearing shoes (Wydick et al., 2018). Wydick et al. (2018) report that Mycoskie was in Argentina for adventure when he noted many Argentine school-going children who could not attend school due to lack of shoes. Blake wanted to help the children out of compassion by donating shoes to them. However, the point that giving donations was not sustainable forced Mycoskie to start a company that produces and sells quality shoes while making shoe donations to needy children (Marques & Dhiman, 2020). Such an idea forms the basis of TOMS Shoes, a company esteemed by many people globally.

TOMS is a for-profit organization but operates a non-profit subsidiary called Friends of TOMS. The supplementary business takes care of the donations’ aspects and partners with other persons and organizations that bear a philanthropic mentality like TOMS. The mode of gift adopted by TOMS sees the company donate a quality pair of shoes to a needy child whenever a customer makes a purchase. The practice forms the basis of the ‘One for One’ mission, allowing TOMS to make adequate money to finance its philanthropic objective. TOMS’ success makes many organizations yearn to do business its way. However, the company’s achievements come from multiple aspects, including the organizational structure discussed below.

TOMS’ Organizational Hierarchy

Appendix 1 below provides a graphical representation of TOMS’ organizational structure. The appendix offers a clearly visible aspect that is key in the entity’s block-like action. The system is straightforward, consisting of a significantly small number of positions. This aspect allows Mycoskie to operate the organization efficiently. The founder and the CEO occupy the same position in the organization structure. One of Mycoskie’s arguments is that an entity’s management should be different from its ownership (Bacq & Eddleston, 2018). That comes from the absence of a connective line between the founder and the other organizational positions in Appendix 1. Initially, Mycoskie started TOMS while serving as the CEO and the founder (Mainwaring, 2021). However, this changed with time as the business experienced expansion, leading to the creation of an independent founder’s position and a CEO slot.

The CEO position is very crucial in the management of every organization. Currently, Magnus Wedhammer is the current CEO of TOMS and operates the organization together with Mycoskie (Wood, 2021). The CFO, chief marketing officer, chief strategy and impact officer, creative director, application and integration technology head, and HR vice president slots follow the CEO. Persons in those positions report directly to the CEO and the organization’s founder (Mainwaring, 2021). The financial planning and analysis director then reports to the CFO office, whereas the senior director of merchandising and E-commerce and retail vice president report to the chief marketing officer. The office of global creative art further reports to the creative director. Moreover, directors in charge of web development and integrations, development, commercialization and quality assurance, and Americas’ sales report to the head of people or human resources. The organizational structure of TOMS is simple, giving the firm unmatched control of issues and business.

How the Organization’s Design Fits Its Environment

TOMS operates in a highly competitive industry featuring strong players. The organization’s incorporation in 2006 makes it a significantly young entity. The American and global shoes and apparel market offers new entrants an easy way to join (Thompson, 2017). However, stiff competition in the industry often leads to the death of many new entrants, primarily due to the absence of a working strategy. TOMS’ triumph is thus the courtesy of the well-crafted organizational structure that always put Mycoskie at the center of all processes (Thompson, 2017). Mycoskie is the brain behind the organization’s initiation and purposes to ensure that the firm never goes away from its primary purpose. TOMS’ prime objective is to generate a reliable cash flow system that finances the owner’s desire to touch lives. The company’s mission anticipates converting its products into a cause that is un-compete-able by mere products.

As the owner, Mycoskie, cannot be fired, and neither can he leave the organization when things do not work. That is why he is part of the entity’s helm even after giving an employee the CEO’s position. The CEO is the head of all operations at TOMS. All the other offices in the business’s organizational structure report to the CEO. The CFO’s office takes care of all financial issues in the organization. The department ensures the prices set for the shoes are competitive and profitable enough to allow the entity to run smoothly while donating essential stuff to the needy. The director, financial planning and analysis, work together with the CFO to ensure profitability and smooth operations of the company (Bacq & Eddleston, 2018). The marketing department supports all the marketing aspects of the firm.

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TOMS is substantially unique in that it never owns direct outlets for shoes’ sales. The entity works with different stores to make the products available to customers (Reiser & Dean, 2017). The marketing team collaborates with the store owners to ensure that the shoes go at the prescribed prices. TOMS continues to establish new marketing dealerships globally via the business’s robust e-commerce unit, headed by the E-commerce and retail vice president. The HR department at TOMS is also simple, where the HR head manages the U.S.-based sales team, quality assurance, commercialization, and web development teams. The small size creates adequate room for all the activities to flow quickly and for Mycoskie to notice any issues with ease (Kotler et al., 2020). The owner endeavors to transform every employee at TOMS into a sub-owner for the stress-free realization of TOMS’ mission and vision.

Mycoskie also links TOMS with its subsidiary unit, Friends of TOMS, which creates room for other organizations to chip in and contribute to its mission of touching souls. A look at TOMS’ organizational structure provides something interesting about the organization. The production department’s absence is crucial to the firm and anyone investigating its operations. TOMS mainly imports its shoes from China, Argentina, and Ethiopia (Boone et al., 2020). The organization thus imports part of its production for the American market and then sends all the other consignments to its various stores in various parts of the world. That is why the technology department and e-commerce sectors play a major role in the organization.

Comparison of the Organization’s Vertical and Horizontal Structure

TOMS has three levels of vertical management hierarchy, with the CEO and the founder occupying the top level. The CFO, Chief Marketing Officer, Strategy and impact head, creative director, applications and integration head, and HR head constitute the second tier of the organizational structure. The third corporate structure team comprises the financial planning and analysis director, merchandising director, E-commerce and retail vice president, and global creative art director, among others. The simplicity in TOMS’ organizational structure serves the entity’s purpose effectively by granting the owner direct experience of all the entity’s processes. The clarity also makes the entity’s operations lean, thus providing an unmatched competitive advantage over competitors.

Conclusion

In conclusion, TOMS’s organizational structure is a product of a highly designed platform meant to deliver a rare effect globally. Mycoskie is the pioneer of the ‘One for One’ strategy and applies it in TOMS to touch as many souls as possible. TOMS exhibits a significantly simple organizational structure despite being an international entity. There are no regional managers or directors in TOMS, only the owner and the CEO occupy the top rank of the organizational structure. The corporate plan meets its purpose by allowing Mycoskie to influence employees, customers, and partners for the holistic growth of the firm.

References

Bacq, S., & Eddleston, K. A. (2018). A resource-based view of social entrepreneurship: How stewardship culture benefits scale of social impact. Journal of Business Ethics, 152(3), 589–611. Web.

Boone, L. E., Kurtz, D. L., Khan, M. H., & Canzer, B. (2020). Contemporary business. John Wiley & Sons Canada Ltd.

Kotler, P., Armstrong, G., Harris, L. C., & He, H. (2020). Principles of marketing. New York Pearson.

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Mainwaring, S. (2021). Lead with We. New York: BenBella Books.

Marques, J., & Dhiman, S. (2020). Social entrepreneurship and corporate social responsibility. Springer.

Reiser, D. B., & Dean, S. A. (2017). Social enterprise law: Trust, public benefit, and capital markets. Oxford University Press.

Thompson, A. A. (2017). Crafting and executing strategy: The quest for competitive advantage: Concepts and cases. McGraw-Hill Education E.

Wood, Z. (2021). Ethical shoe brand Toms hopes to find its footing with Gen Z. The Guardian. Web.

Wydick, B., Katz, E., Calvo, F., Gutierrez, F., & Janet, B. (2018). Shoeing the children: The impact of the TOMS shoe donation program in rural El Salvador. World Bank Economic Review, 32(3), 727–751. Web.

Appendix 1

Structure

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