Whole Foods Market's Unique Work Culture and Practices

            
 
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Case Details:

Case Code: HROB086
Case Length: 23 Pages
Period: 1978 -2006
Organization: Whole Foods Market
Pub Date: 2006
Teaching Note: Available
Countries: USA
Industry: Retail

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"Whole Foods is a social system. It's not a hierarchy. We don't have lots of rules handed down from headquarters in Austin. We have lots of self-examination going on. Peer pressure substitutes for bureaucracy. Peer pressure enlists loyalty in ways that bureaucracy doesn't." 1

- John Mackey, cofounder, Chairman and CEO of Whole Foods Market, in 1996.

"Customers experience the food and the space, but what they really experience is the work culture. The true hidden secret of the company is the work culture. That's what delivers the stores to the customers."2

- Chris Hitt, former President of Whole Foods Market, in 2004.

Whole Foods Walks the Talk

In January 2006, Fortune, a prominent business magazine, published its annual list of the '100 Best Companies to Work For' in the United States (US). Whole Foods Market (WFM) featured at number 15 in the overall ranking, and at number three among large companies, on this list.

It was the ninth consecutive time that Fortune had ranked WFM as one of the best companies to work for, (WFM was also one of the few companies to have featured on the list every year since Fortune started publishing it in 1998) (Refer to Exhibit I for WFM's ranks on the list since 1998). WFM was the world's largest natural foods retailer, and also carried several products that were certified as organic 3.

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

Natural and organic food was thought to be the fastest growing segment in the US retail industry in the early 2000s (Refer to Exhibit II for a note on organic food). WFM was among the fastest growing retailers in the US, and was known for its high growth rate in an industry characterized by zero to negative same store sales growth4. WFM was well known for its employee-oriented work culture and team-based operations, which were thought to be the main drivers of the company's success.

"One of our core values at Whole Foods Market is Team Member happiness and excellence, and we believe our innovative and egalitarian work environment is a major factor in our success as a company," said Walter Robb, co-president and COO of WFM 5.

WFM has been called a 'radical experiment in democratic capitalism' 6. According to analysts, several companies talked about teamwork, autonomy, and empowerment, but very few actually put these ideals into practice. WFM was considered by some to be one of those rare companies that not only had a clear vision, but also the commitment to pursue it.

Background >>


1] Charles Fishman, "Whole Foods is all Teams," Fast Company, April 1996.
 
2] Charles Fishman, "The Anarchist's Cookbook," Fast Company, July 2004.

3] Natural food and organic food are produced without the fundamental nature of the product being altered. In other words, the food, whether it is raw or processed, contains no artificial additives. However, for food to be called 'organic', it needs to be certified by a government approved agency. Therefore, all natural food is not necessarily organic.

4] Same stores sales growth rate is an important retail industry metric that measures the sales growth from only those stores that have been operating for at least one year. In the early 2000s, most of the major retail chains were experiencing low, and sometimes negative same store sales growth.

5] "Fortune Names Whole Foods Market #15 on 100 Best Companies to Work For List," www.wholefoodsmarket.com, January 9, 2006.

6] Charles Fishman, "Whole Foods is all Teams," Fast Company, April 1996.

 

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