Coles Myer LtdBackground and IssuesIn 1985, GJ Coles, primarily a Melbourne-based supermarket chain, merged with Myer Ltd, an upmarket Melbourne department store, to become Coles Myer Ltd. The merger was prompted by an expectation of significant savings through the sharing of services and overhead costs such as purchasing, warehousing, information technology and real estate. However, these benefits never occurred. Coles Myer was plagued with poor management, poor strategic decisions and internal conflicts. Their share price was falling and lagging behind that of their biggest competitor Woolworths, and profits had been stagnant for three years. In September 2001 the board appointed John Fletcher as Managing Director, well known for helping to build Brambles into a successful international business. Fletcher's first priority was to do something about Coles Myer's share price, but he recognized that to be able to change it he first had to tackle the company's strategic and structural problems. This analysis of organizational design and effectiveness will discuss the problems faced by Coles Myer. , discussion of theories related to these problems and possible solutions, examination of what is being done and what could be done to improve the situation. One of the biggest problems Coles Myer faced was organizational culture. As Coles and Myer's target markets were low-end and high-end respectively, the compatibility of their cultures became an obstacle after the merger..