Since then, however, SHLD has floundered. What happened?
While other retailers are recovering (ex-JCP), Sears can't even seem to be make money and more importantly, has been losing sales for the last five years.
A recent BusinessWeek article may hold some of the answers here. After reorganizing Sears into dozens of entities, each with CEO, board and profit/loss statement, the firm has devolved into bureaucratic infighting. With thousands of stores and over 200,000 employees, the firm has chosen to split itself internally into dozens of smaller entities (but not really). Sears has traded inefficient cooperation for efficient (if cutthroat) competition. A former executive describes Lampert's model has
created a “warring tribes” culture. “If you were in a different business unit, we were in two competing companies,” he says. “Cooperation and collaboration aren’t there.”How did this happen? Lampert has interpreted free market economics and Ayn Rand's philosophy to make decentralization a key component of Sears. Lampert intends to have the invisible hand choose which business units succeed. However, a key non-free market part is Lampert. Because all units ultimately report to him and he disburses funds, this system is more like centralized planning. Units are vying for Lampert's attention, not trying to make SHLD. In fact, by artificially splitting apart Sear's business (which were formed roughly along market lines' of cooperation), he is disrupting the free-market economics that he seeks to follow.
Given this, is Sears's problem actually its Chairman, Lampert?
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