Organizational Behavior of Whole Foods Market - Term Paper Example

Organizational Behavior Comparative analysis of Whole Foods Market Organizational behavior is the study of how employees in a work environment behave or interact with each other while working together and accomplishing the given tasks. Various emotions and behavioral patterns like attitude, needs, expectations, problems, experiences, etc will be at play, as the employees go on communicating with each other over a period of time, thereby helping in understanding the behavior of an individual in an organization. (Harris and Hartman, 2002). Exhibition of these behaviors happens mainly due to or according to the internal and external factors that are impacting the organization. So, for people working at the management level including the leaders, CEO’s, managers of the organization, it is very important to understand these behavioral patterns and the ‘catalytic’ factors, so to understand their workers even more better. This way, they can come up with strategies which will combat the negative or organization-detrimental behavior of employees, and turn them into positive and constructive ones. Organizations all over the world including retail or grocery retail companies are able to incorporate apt organizational behavior concepts, according to the various external and internal factors and thereby come up with optimal organizational practices, achieving success. However, other organizations miss or fail to adopt these practices leading to failures, yet, they can adopt any time by following successful practices of other organizations. So, this paper will discuss how organizational behavior can help to make organizations particularly retail organizations successful, by comparing and contrasting Whole Foods Market with two other retail grocers, Walmart and Marks and Spencer, particularly focusing on the similarities and differences that contribute to the success or lack of success in each company. Background Retailing can be considered as an interface between the manufacturer and the individual consumer, so that the consumer can buy goods in the form of retail stores, online websites, through vendors, etc. Among these modes of retailing, retail stores have ‘cropped up’ throughout the world, with certain retail companies having high number of stores or chains at various places. Whole Foods Market is one such popular and widespread retail chain operating close to 300 stores in United States, Canada and United Kingdom, with a workforce of more than 50,000. Based in Austin, Texas, it had humble beginnings, as it was started as a small single store in 1978 by John Mackey and his girlfriend Rene Lawson (wholefoodsmarket.com). Through mergers and acquisitions, it has expanded optimally and sells most of the natural and organic foods under one roof, including groceries, bakery items, seafood, meat and poultry. As its main focus is on natural and organic foods, Whole Foods Market wants to sells products which can positively impact consumer’s health, and which can be understood from their core values. Selling the highest quality natural and organic products available Creating wealth through profits & growth Caring about our communities & our environment Promoting the health of our stakeholders through healthy eating education (wholefoodsmarket.com). Fig 1: wholefoodsmarket.com. Non-Profit Business Model: Sustainability. Retrieved on October 15, 2010 from http://www2.wholefoodsmarket.com/blogs/jmackey/files/2008/06/ wfm-stakeholder-model.jpg Because of the incorporation of these social factors as core values, it is clear that its workers’ organizational behavior in the right direction, as the employees only play the key part in the actualization of its core values. Wal-Mart or (Walmart as branded in 2008) on the other hand, is a retailing giant, as it is the regarded as the world’s largest company in any field, in terms of revenues. (walmartstores.com). It operates mainly through its discount stores, urban supercenters and neighborhood markets, with its business segments divided as Walmart US, Walmart International and Sam’s Club. Founded by Sam Walton in the year 1962 and headquartered in Bentonville, Arkansas, it operates in over 15 countries with around 8500 stores. With over 2 million employees all over the world, and more than 1 million employees in United States, it is regarded as the largest private employer and importantly largest grocery retailer in the United States. (walmartstores.com). The company handles and sells various products starting from grocery to electronic items, food items, entertainment products, merchandise, etc, etc. On the lines of Whole Food Market, Walmart also adopted various organizational behavior concepts as part of its management of its employees, increasing productivity and at the same time fulfilling its social responsibilities. Marks and Spencer, one of UK’s leading retailers, is another grocery retailer achieving optimum success through effective organizational processes. Founded in 1884 and headquartered in London, it has close to 1000 stores in over 40 countries, with over 70,000 employees contributing to a strong workforce. Marks and Spencer offers high quality, and value products ranging from clothing, home and food products, which are sourced from various parts of the world. Among the product areas, Food accounts for 51.1% and has a market share of 4.3 %. (marksandspencer.com). Although economic recession had its negative impact on Marks and Spencer, like any other retail chain, it was able to sustain itself through optimal strategies and by adopting apt organizational behavior concepts, thereby maintaining the productivity of its employees. Therefore, all these three retailers, although have different background and origins, adopted many organizational behavior concepts in times of need to manage their employees, and thereby productivity and performance. However, there were both similarities and differences in the concepts and strategies adopted by Whole Foods Market, Walmart and Marks and Spencer, resulting in both success as well as lack of success. Similarities and differences that contributed to the success or lack of success in each company Constructively involving the employees as a team and thereby motivate them as part of optimal organizational behavior, with leaders playing the key role Whole Foods Market is well known for employee focused processes and team-based operations, both of which function as the main drivers for optimum employee motivation and performance, thereby leading to increasing customer satisfaction and profits. That is, most of the strategy formulations and decision making processes are carried out with the direct participation of relevant and connected employees, with the management only overseeing and ‘accumulating’ their views while taking the final decision. This can be seen even in the formulation of the all important “Declaration of Independence” in 1985, which spelled out the above mentioned Whole Foods Market’s core values, with the founder and leader, John Mackey involving the employees. “Almost all decisions are made by consensus or after intense consultation with a wide variety of employees. Over 60 employees helped write the company's "Declaration of Interdependence” (Griffin and Moorhead 2009). On the same lines, Whole Foods Market believes in decentralized model of decision making with decisions being made mainly closest to the place, where they will be implemented or carried out and importantly should involve the employees who will be impacted. Based on this thinking, local store employees mainly design their stores, pick the products that will sell locally, and also establish prices, with Mackey preferring to stay out of those local choices, claiming that his favorite decisions are "decisions that are not my decision."(Griffin and Moorhead 2009). This practice will motivate them to give there best, as they are only responsible for both its success and failure. This decentralized and employee-centric model is also applied during recruitment of new employees for the local store. That is, employees in the local stores are allowed to recruit temporary staffs from the local community itself, and after a four-week trial period, were given the 'hiring vote', using which they can permanently hire the employee. This way, employees will recruit newer ones, who are adaptable with their way of functioning, thus maintaining good work flow and communication; thereby enabling the stores to function productively and successfully. On these same lines, Walmart also have incorporated these organizational behavior concepts of employee participation, teamwork and leadership roles in its functioning, exhibiting a lot of similarities. Like Mackey, Walmart’s founder Sam Walton also believed that teamwork and employee participation can elevate its functioning and help it reach higher echelons. “Aren't we a group of ordinary folks? We really are. And I think we, together as a team, have done extraordinary things. We've all grown, we've all accomplished much more than any of us ever thought that we could." (walmartstores.com). As Walmart employs more than 1 million employees, most of whom come from different backgrounds, races, etc, Walton felt team work is very crucial to provide service to the fullest satisfaction of the customers. So, to achieve that, every employee in Walmart is treated fairly and importantly, which gives them motivation to perform optimally. In diverse environment like Walmart, teamwork is the key to achieve success as well as to manage diversity aptly. “Wal-Mart employees come from different backgrounds and races, and have different beliefs, but everyone is treated with dignity and respect.” (keygroupconsulting.com). This type of positive employee treatment only enabled Walmart to be ranked among the Top 10 in Fortune magazine’s Global Most Admired Companies list – 9th position. However, this position is actually a big drop for Walmart, as it got the top spot in the years 2003 and 2004. Unlike Whole Foods Market’s optimal organizational behavior practices, certain practices were different and this leads to de-motivation among the employees and clear failures. That is, quite contrary to Whole Foods’ practice of giving more powers to the employees, Walmart management held most of the powers and treated the employees as one, who should do their duties, without any questions or feedbacks. This form of management was particularly visible after the death of their successful leader, Sam Walton. “Following the death of Sam Walton, however, Walmart rather quickly morphed into the more typical bureaucratic company with a pattern of employee relations where the workers arc regarded as impersonal hirelings.” (Wallace 2010). They even denied the mandatory thirty-minute meal break for the employees within the first five hours of a shift, thus eliminating the opportunity for the employees to socialize, which could have facilitated more teamwork in the work environment. These types of practices not only lead to de-motivation, but also lead to a lot of lawsuits by the employees. “In December 2005, Wal-Mart was ordered to pay $172 million to more than one hundred thousand California employees in that claimed that Wal-Mart routinely denied workers meal breaks.” (Ferrell, Fraedrich and Ferrell, 2009). Walmart was also accused of gender discrimination, with many women employees complaining that they were paid less than their male counterparts and were overlooked during promotions, with many of them also filing lawsuits. "Female employees of Wal-Mart Stores have been paid less than comparable male employees . . . despite having, on average, higher performance ratings and more seniority." Jocelyn Larkin and Christine E. Webber, attorneys for plaintiffs” (Griffin and Moorhead, 2009). Thus, a bad reputation arose that Walmart is not positively focusing on its employees and failed to create a loyal and motivated workforce, thus exhibiting weaker organizational behavior. Marks and Spencer, quite like Whole Foods Market and somewhat unlike Walmart, practiced good organizational behavior practices, which optimally developed teamwork and motivation among the employees, with middle level leaders playing crucial roles. One of the main platforms of Marks and Spencer's philosophy is developing and maintaining good human relations, whether it is with the employees or with the customers. As part of this platform, Marks and Spencer's strategy is to have employees, who work in unison and who take more care, predominantly in relation to customer service. So, the management took good care of the employees through financial benefits, other incentives, better working environment, solving of their grievances, etc, so they can in turn take care of the customers. Marcus Sieff, former Chairman of Marks and Spencer, would argue that by caring for employees, the company will create employees who will care for the company and its customers. As a result Marks and Spencer is famous for its services and support for employees, from the quality of the toilets to things like dental care. (Segal-Horn, 1998). This concept of good human relations is a good standard of organizational or management behavior, with one manager referring it as 'visible management'. Visible management in the sense, middle-level leaders and managers spend a lot of time visiting the various stores, discussing and eliciting feedbacks from the employees as part of optimal employee involvement. “As one board member explained: 'In a normal week, the 12 board members will probably between them visit about 25 stores…We will just go in and talk with some of the management, supervisors and staff. It's about getting out and listening to the organization.' (Segal-Horn, 1998). Although, this strategy was quite similar to Whole Foods Market strategy of employee involvement, motivation and leader participation, there are some differences. That is, leaders or management of Marks and Spencer involved employees and facilitated teamwork by directly participating in the process, while the leaders at Whole Foods Market achieved those two objectives without directly involving themselves, instead putting the onus on the employees. Rise of power structures in the form of Trade Unions and how each retailer responded as part of conflict management, with employees taking the deciding role In any organizations, including retail organizations employees will face problems or will have grievances and importantly could wish for more facilities, benefits, etc, and that is where Trade unions will come into the picture. These aspects will clearly impact their behavior, motivation or morale, thus becoming an integral part of organizational behavior, and thereby positively or negatively impacting the employees’ as well as company’s performance. However, the leaders and the management of the organization would feel that Trade Unions would further deteriorate the situation, instead of addressing the employees’ grievances and expectations, which can be carried out by the leader and management itself, without any need for the Unions. This mentality of the leader or management is quite visible and similar among the managements of Whole Foods Market, Walmart as well as Marks and Spencer. That is, they avoided any rise of informal power structures to manage the conflicts, as they themselves (leaders) can handle it and thereby create an optimal working environment for the employees. John Mackey, although a libertarian, is not in favor of any trade union formation or union activity in Whole Foods Market. “I’ve seen my name run into the dirt by the unions and people on the left. I used to really resent it and resist it.” (Smith, 2008). As pointed above, Mackey believes that trade unions cannot do anything constructive and will only facilitate a kind of adversarial relationship between the management and the employees. Because of this strategy, Whole Foods from the beginning have resisted any attempt by Third parties as well as its own employees to form a Union, with its union busting efforts in Madison, Wisconsin, in 2002 gaining prominence. Even the 2004 ruling by the National Labor Relations Board upheld the resistance put by the store management at the Madison store against Union related activities. (Smith, 2008). However on the other hand, employees themselves will avoid Unions and behave in a productive manner inside the organization, when they feel that the leader and management are taking constructive steps for their wellbeing. This was visible in Whole Foods Market stores as well, with Michael Henneberry, belonging to the United Food and Commercial Workers Union, accepting that they were not able to attract the interest of the employees at many stores including Berkeley's Whole Foods despite trying for many years. Like in the case of Whole Foods Market, Walmart’s management also felt Unions will affect the cordial working environment and prevented any union activity, but quite dissimilar to Whole Foods prevented Unions with even more force. Wal-Mart in one of its website, called Wal-Mart Facts has publicized its stand on trade unions and how its leadership and management can manage all the issues of the employees. “Our Wal-Mart union stance is simple. There has never been a need for a Wal-Mart union due to the familiar, special relationship between Wal-Mart associates and their managers. Wal-Mart has encouraging and advantageous relationships with our loyal and happy associates on the floor of each Wal-Mart facility.” (Griffin and Moorhead 2009). However, the difference and the ethical issue here is Walmart is accused of using various illegal or unethical means to prevent employees from indulging in Union-related activities. That is, when the store management or other supervisors come across any employee, who appears interested or ‘susceptible’ towards Union activities, they are threatened, pressurized in work environment and are even terminated from work. Unlike Whole Foods, all the employees are not satisfied with Walmart’s assurance and so some are showing interest or inklings to start union related activities. However, critics blame workers' reluctance to join the labor union mainly due to Wal-Mart anti-union tactics, which includes managerial surveillance and pre-emptive closures of stores or departments who choose to unionize. (clothesfreeforum.com). So, although, Walmart holds on to the stance that it is already addressing all the issues of the employees, and there is no need for Unions, quite different from Whole Foods Market, it is getting a lot of negative comments. The case of Marks and Spencer is different from Whole Foods Market as well as Walmart, because it provides a complicated or unclear picture about its backing for Trade Unionism. That is, in its official website, in a file titled, Ethical Trading Initiative 'Base Code', Marks and Spencer states, “Workers, without distinction, have the right to join or form trade unions of their own choosing and to bargain collectively. The employer adopts an open attitude towards the activities of trade unions and their organisational activities. Workers representatives are not discriminated against and have access to carry out their representative functions in the workplace.” (marksandspencer.com). This clearly proves that Marks and Spencer is having no objections to Union related activities among its employees. They propose as if Unions can have the fullest backing of the employees, and it can take up and negotiate any issue of the employees on their behalf. This stance of Marks and Spencer could also impact organizational behavior in a positive way, as the employees can do ‘collective bargaining’ in case of grievances and needs. This being the case, there was a contradictory message that came in the form of a answer to a question asked in the Annual General body Meeting (AGM). The question was, “In light of recent media comments, what percentage of the Company’s staff now belong to a trade union.” To which the answer given was, “Marks & Spencer does not recognise trade unions within the UK and staff are under no obligation to tell us whether they have joined or not joined a trade union.” (marksandspencer.com, 2005). So, both these statements provide incongruous message on whether Marks and Spencer is supporting Trade Unionism or not. Whatever be the case, quite similar to Whole Foods Market, employees are not showing that much interest in indulging in Unionism. With Marks and Spencer paying considerably more than the relevant wages council recommendation and with apt solving of various problems, employees avoid close affiliation to any Union related activities. (Beaumont, 1987). Conclusion An organization or its workers will function based on various internal and external factors, which are mainly interwoven with the influence of one factor impacting the other and thereby organization as a whole. If the external factors are favorable, the internal atmosphere will be positive, cordial and optimal, with all the employees, fully motivated and keen to work more, aiding the organization grow optimally both in the financial sense as well as in the market share aspect. So, both the external and internal factors are interdependent and even if one of it fails to work properly, the behavior of the employees could waver; thereby the whole of organization can face problems. (Hitt, Miller and Colella, 2009). This impact of various factors is a key to understand the organizational concept of Organizational Behavior, and importantly to understand how it is reflected in any organization particularly in the retail organizations of Whole Foods Market, Walmart and Marks and Spencer. As discussed throughout the paper, all these three organizations adopted and implemented organizational processes to cater to their employees, so that they can get optimum motivation and come up with high productivity. Employee centric actions carried out by these retailers, leading to teamwork has provided a lot of benefits to these companies, with Whole Foods Market’s policies appearing quite effective in line with optimal organizational behavior. On the same lines, the crucial concept of Trade Unionism is also handled quite effectively by Whole Foods Market, when compared to Walmart and Marks and Spencer. Thus, it is clear that effective strategies based on apt organizational behaviour concepts could make any organization successful, and Whole Foods Market is a perfect example. References Beaumont, P. B. (1987). The decline of trade union organisation. Routledge. clothesfreeforum.com. Health Care reform. Retrieved on October 15, 2010 from http://www.clothesfreeforum.com/archive/index.php/t-15326.html Ferrell, O. C., Fraedrich, J and Ferrell, L. (2009). Business Ethics: Ethical Decision Making and Cases. Cengage Learning. Griffin, R.W. and Moorhead, G. (2009). Organizational Behavior: Managing People and Organizations. Cengage Learning Harris, J and Hartman, S.J. (2002). Organizational Behavior. Best Business Books. Hitt, M., Miller, C. C and Colella, A. (2009). Organizational Behaviour. 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Retrieved on October 15, 2010 from http://walmartstores.com/AboutUs/ walmartstores.com. Teamwork. Retrieved on October 15, 2010 from http://walmartstores.com/AboutUs/292.aspx wholefoodsmarket.com. Our Core Values. Retrieved on October 15, 2010 from http://www.wholefoodsmarket.com/values/corevalues.php wholefoodsmarket.com. Non-Profit Business Model: Sustainability. Retrieved on October 15, 2010 from http://www2.wholefoodsmarket.com/blogs/jmackey/files/2008/06/wfm-stakeholder-model.jpg Read More