Eaton's Turnover

Based on the above timeline, Eaton’s demise started as early as 1952, when Sears joined forces with Eaton’s main competitor at the time, Simpsons. The Simpson’s-Sears venture proved to be effective, as Sears brought their expertise from operating in the US for many years and quickly established new stores in the suburbs which tended to be the growth part for most communities. The stores were new and modern. Eaton’s management had failed to respond to its competitors actions of locating their stores to where the population was moving to but instead chose to remain downtown.
The ownership structure of Eaton’s appears to have contributed to their demise. Since the company was privately held, it appears that they were disinterested in the day to day operations of the business unlike companies that were more widely held such as HBC whose management was greatly scrutinized by its investors.
Eaton’s management had ample opportunities to turn around the failing company. For example, had they reintroduced the mail catalogue business and their support for the Santa Claus parade
In the late early 1960’s Eaton’s centralized the buying function and left part of the selling function at the store level.
What this meant for Eaton’s managers at the store level is that they had lost their competitive edge and their decision making powers were much diminished. At the store level the manager was able to react to local customer needs, knowledge and had a solid customer base. While management benefited from some obvious advantages of centralization, upper management failed to realize that the retail business is a detail oriented affair. Not catering to local tastes and fashions, which varied across Canada due to weather, level of disposal income, product assortment by region, and the French-English mix. Eaton’s major reorganization efforts simply did not blend well with the existing supply chain
management.

In the early 1960’s, Eaton’s management decided to undergo an organizational change. They felt that some of the store level management functions should become centralized thus taking away their decision making functions. This proved to be another major blunder by Eaton’s upper management. Store level management had a better understanding of its customer’s needs and was able to react quickly to changing tastes. . Not catering to local tastes and fashions, which varied across Canada due to weather, level of disposal income, product assortment by region, and the French-English mix. Eaton’s major reorganization efforts simply did not blend well with the existing supply chain management.
The centralized standard procedure may result in delays in receiving the materials.

It adversely affects the employee morale. It can be concluded that the company should centralize all policy matters, the purchase of major raw materials and capital equipment should be made by the head office, while the individual divisions should be allowed to make their own purchases in accordance with the policies established by central office. If the company adopts the “profit center decentralized” set up the decentralized should be made accordingly.