typical interaction is for a salesperson or department manager to pick up
the phone and say to the buyer, “Hey – this is moving. Get me some more
of this.” Buyers often initiate similar calls on the merchandiser. If the
system breaks down, our safety valve is the customer who, if frustrated, is
encouragedby the salesperson to write or call one of the co-presidents. The
top guys act like ombudsmen for the customer and the sales force. Things
don’t stay broken for long.’^26
Some buyers are also given an incentive based on net margin (to penal-
ize excessive markdowns). Department managers earn $20 000–30 000 per
year, buyers and store managers earn between $40 000 and $100 000 per
year. A high percentage of the compensation for all managers and buyers
is tied to performance.
In a typical facility, store managers oversee $30 million in inventory and
600 employees. Owing to the strong ties of salespeople to customers and
department heads to buyers, one might think the store manager’s job is
mostly personnel, public relations and facility maintenance. In fact, it’s a
great deal more; the fabric of shared power woven of solid and dotted line
relationships makes it difficult to visualize in traditional authority/respon-
sibility terms. Top management views the store manager as blending the
drive for individual performance with store-wide perspective. They serve
as facilitator, orchestrator and, at times, hard-nosed enforcer of relation-
ships. Nordstrom managers and employees continually stress the fact that
there is no hiding behind organizational structure: rather, the individual is
given the responsibility to work things out. In this system, relationships
matter for a great deal.
The regional managers have a great deal of authority in hiring personnel
for new stores, selecting buyers and working closely with buyers, mer-
chandisers and department heads to get the right mix for the store in their
region. The store manager decides who to promote to department
manager, is a co-interviewer of all new personnel hired, and plays a central
role in hammering out sales targets, supporting sales personnel and spon-
soring rallies, meetings and a variety of recognition programmes.
Built-in tensions
The core tension in the Nordstrom system stems from the drive to encour-
age the greatest possible degree of individual initiative, delegation and
decentralization against the backdrop of team goals and corporate values.
Nordstrom executives were quick to emphasize that this cannot be fine-
tuned adequately with financial incentives alone. Over the years an intri-
cate set of values and social norms have evolved which give the Nordstrom
organizational paradigm its real power.
Nordstrom feeds on youth, energy and vitality. In part this is reflected in
The recruitment and internal market domains 393