Remaking JC Penney's Organizational Culture
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Case Details:
Case Code : HROB093
Case Length : 19 Pages
Period : 2004-2007
Pub Date : 2007
Teaching Note : Available
Organization : J.C. Penney, Inc.
Industry : Retailing
Countries : USA
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Excerpts Contd...
Training and Development at JCP
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Symbolic changes apart, JCP also kick-started a process to groom leaders and
provide ongoing training to all the employees. The management felt that to
project JCP as a great place to work in, the employees had to feel that they
could build a career in the company. In an industry where many companies were
reluctant to invest in training due to the high turnover of the employees, JCP
viewed such investments as a panacea for the problem. "We've been investing
heavily in executive education and leadership training for our managers,
strategic skills for our top people … we're very committed to being a great
place to work, and we think the first thing [to] be a great place to work is [to
be] a great place to investment your career. So we also think that'll have an
advantage of changing, you know, lowering our turnover to the lowest in our
industry," Ullman said...
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JCP Fires New COO
On December 28, 2006, JCP announced that it had fired its COO, Catherine
West (West). No reason was cited for the action. West was looking after
store operations, property development, and logistics. JCP was in no hurry
to fill up the vacancy and said that the areas previously reporting to West
would report directly to Ullman. A company spokesperson said that JCP would
revert to its earlier structure of three executives reporting directly to
Ullman...
The Results
The efforts to change the culture at JCP started bearing fruits within two
years. The various initiatives seemed to be having a positive impact on the
employees and their job satisfaction. JCP's second 'Associate Engagement
Survey' (AES) in 2006 revealed that 73 percent of JCP's employees were
"engaged" as compared to 67 percent in the 2005 AES. Analysts noted that
such high numbers were good, especially for a retail chain...
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Reactions to the Culture Change Initiatives
Ullman was credited with having brought about a revolutionary change
in JCP's culture. Experts said the culture of an organization was
top-driven and the top management's commitment was vital in such
culture change initiatives. They noted that companies that insisted
on employees dressing in a particular way were giving the impression
that appearance was more important than achievement. And a very
formal culture squashed creativity and innovation. The symbolic
changes brought about by Ullman and his team was appreciated... |
Outlook
Leonard N. Stern School's Wiesenfeld noted that the focus of companies that
wanted to transform their culture was changing. She said, "Today's emphasis on
culture change is shifting from stemming the bleeding of the last five years to
paying attention to broad cultural adaptations that will deliver a competitive
advantage."...
Exhibits
Exhibit I: Ten-Year Chart of JC Penney
Exhibit II: JCP's Winning Together Principles
Exhibit III: High Profile Executive's Exit in 2006
Exhibit IV: Three Year Financial Summary of JCP
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