Posted: May 25th, 2022

Management styles used by JC Penney s

management styles used by JC Penney’s management and pros and cons of each era of management. The paper begins with a general introduction of the management and then by answering the questions asked. The paper also evaluates company’s management styles and problems faced by the company. Importance of innovative management style and a suitable style for JC Penney is also considered in the given paper.

Management

Penney being one of the ‘largest retailers in the United States of America’ was founded in the year 1902 by James Cash Penney. At its inception the company owned three departmental stores. The company now owns and operates a chain of more than 1050 department stores in the country. (Hoover’s Company Profile, 2014) Throughout the period of more than a century of its operations the company has witnessed many changes in management and operations, all directed at making the company and its stores widely accepted and loved by the consumers. (Ostlund, 2012)

The company has witnessed a drastic change from being ‘a value retailer to a customer-driven retailer’ in order to win the loyalty of customers and stand out in the competition. Moreover, the company has also taken a shift in its promotion and marketing strategies. The company in these one hundred and twelve years have changed itself according to the need of the market and customers. These changes sometimes worked for the benefit of the company and sometimes backfired. Management of the company in all those years has played their part in designing and implementing these changes. (Ostlund, 2012)

The role played by management, and its impact on the company in given circumstances is discussed and evaluated below.

Evaluate two key changes in J.C. Penney’s management’s style from the company’s inception to the current day. Indicate whether or not you believe the company is properly managed today. Provide support for your position

The company has gone through major changes in operations and management during the hundred plus years of its operation. Some of the changes undergone were necessary to survive, while others were just a formality. During those years of operation the company has seen a drastic change in management. Initially management and top positions were offered to those who have been a part of the company through years and has seen the company grow. But with the beginning of twenty first century, JC Penney also shifted towards hiring CEOs from other developed companies as a method for survival and growth. (Hoover’s Company Profile, 2014)

Hiring of Bill Ackman, Ron Johnson and Mick Ullman among others are one such example. All these CEOs brought a different management style with them. And the similarity between all three of them is that they failed miserably. Changes that the Company’s management style faced was that during the period and reign of James Cash Penney as chairman and senior chairman of the company, the company grew along with its employees. Management took the position of top management, and the company embraced change and new technology with the help and consideration of its employees. (Hoover’s Company Profile, 2014)

Today, the management of JC Penney lacks in a few aspects, the most important being proper formulation and implementation of the strategy. Although the company is changing drastically in all aspects (from organizational culture to products it offers) the employees at JC Penny are not happy, and they do not trust their management. Moreover, there is a definite lack of proper communication from management’s side. (Bhasin, 2013)

Explain senior management’s role in preparing the organization to shift from a catalog-based retailer to an Internet retailer. Provide evidence of whether the transition was seamless or problematic from a management perspective. Provide support for your rationale.

JC Penney started it catalog-based retailing stores in the year 1962, and it continued to operate successfully till late 1980’s. However, in the late 1980s and early 1990 the company’s department store operation started to face troubles especially because of rising costs and competition. James E. Oesterreicher who became the president of the company in 1991 closed many of the company’s stores and started internet-based retailing as a way of expanding catalog sales of the company. Internet-based retailing took its full form by the year 1998 when ‘JCPenney.com was transformed into a full-scale sales channel’. (Hoover’s Company Profile, 2014)

The company and its management faced difficulties in this transition, which is quite evident from the sales volume and the time period it took for the development of full-fledged internet retailing through website. In the first year of its implementation company earned the revenues of only $15 million which reached $102 million for the year ending in January 2000. This drastic increase in revenues show that the company has slowly but successfully moved towards being an internet retailer. (Hoover’s Company Profile, 2014)

Moreover, this step taken by the president of the company shows the company’s approach and management style of embracing the technological developments and utilizing them for the company’s benefits.

Evaluate management’s decision to use celebrities as key merchandise vendors and spokes persons. Indicate the organizational impact of these decisions.

With the beginning of twenty first century and worldwide boom of media using the marketing strategy of branding through TV and media persons was a crucial and important step taken by the management. This again shows the management perception of change and innovation and led to the extensive promotion of products showcased and sold by JC Penney departmental stores. This also led to shift in the company’s target market and ensured that the company’s brand is recognized by a greater number of public. (Ostlund, 2012)

This has also led to negative perceptions in the mind of a few existing customers who consider these stars and spokespersons as individuals with lacking morals and characters. But overall this strategic decision and marketing step has led the company to discover new target markets and approach the new customer bases. The company and its stores got positive recognition through this management decision. (Ostlund, 2012)

This has been a highly appropriate step by the management that grants the management of company a way to survive in this drastically changing environment.

As a manager within the JC Penney organization, suggest one (1) innovative idea that could have a positive impact on both the employees and customers of the company. Indicate the approach you will take in implementing the new idea. Provide support for your suggestion.

For the departmental store chain like JC Penney and especially in the declining circumstances the company is facing these days the development and implementation of customer relationship management system and tools will be highly beneficial for the company. The company needs to have a B2B system that not only records but also analyses the customer preferences and sales on various basis (age, gender, demography, etc.). Moreover, the company also needs to properly manage change throughout the organization and give the employees little control and authority. (Daft, 2012)

Researches and newspaper articles indicate a general distrust among the employees and their apparent resistance towards change. For this, this management has to go for a bottom up approach and bring change from the low level employees rather than top level employees. They need to ensure effective participation of all employees and consider their grievances. It is highly crucial to win employee loyalty. (Bhasin, 2013)

Like every strategy, implementation of this idea will start from effective planning and test implementation. Once proven effective in test / experiments, the management need to implement the customer relationship management throughout the company. There should also be proper controlling and monitoring of this system even after implementation so that discrepancies are identified and solved on a timely basis. Moreover, throughout the entire process effective communication with the employees is very important and participation of employees in this process will ensure successful implementation of the customer relationship management. (Daft, 2012)

Predict JC Penney’s ability to adapt to the changing needs of customers and the market environment. Indicate one (1) key change in the management structure that may be beneficial to ensuring such an adaptation to change. Provide support for your prediction.

In the current scenario JC Penney has been in the declining trend. The company has suffered major profit and value decline because of many reasons. These include employee distrust and growing employee turnover, a quick change in the Chief Executives because of wrong strategic decisions, problems in identifying the customers need and gaining customer satisfaction, etc.

The history of the company is evident of the company’s capability, and it ensures that the company has every ability of progressing and growing. This history of more than a hundred and ten years are a proof that the company can survive in any circumstances. I believe that if certain dire management decisions and restructuring in management is undertaken there are high chances of company’s success and growth.

The most important change in management style is a need for distributing authority and accountability and decentralizing the operations on the basis of the product range. Every business unit (fashion, household, drugs etc.) should be led by a different Vice president who should be responsible for the results and growth of that segment. Moreover, the company needs to have strong marketing team and a separate VP Marketing who should be responsible for devising the marketing strategies (product, pricing, placement, promotion) of the company.

Moreover, the company is in a dire need of improving its HR policies and come up with ways to motivate the employees, properly train them and get extraordinary work from ordinary people. The management should also influence the employees and break resistance to change.

References

Bhasin, K. (2013). JC Penney’s Senior Management Team Knows There’s Only One Way Out Of This Mess. Business Insider, 18th March.

Bhasin, K. (2013). Inside JC Penney: widespread fear, anxiety, and distrust of Ron Johnson and his new management team. Business Insider, 22nd February.

Chernev, A. (2012). Two questions haunting J.C. Penney. Retrieved from: http://www.businessweek.com/articles/2012-08-13/two-questions-haunting-j-dot-c-dot-penney [Accessed: 25 Jan 2014].

Daft, R.L. (2012). Management. Australia: South-Western.

Denning, S. (2013). J.C.Penney: was Ron Johnson’s strategy wrong? Forbes, 4th September.

Guinto, J. (2011). The problem with J.C. Penney. The D. Magazine. September 2011.

Hoover’s Company Profile. (2014) J.C. Penney. Retrieved from: http://www.answers.com/topic/j-c-penney-company-inc [Accessed: 25 Jan 2014].

Levy, M. & Weitz, B.A. (2012). Retailing management. New York: Mcgraw-Hill/Irwin.

Lublin, J. & Mattioli, D. (2013). Penney CEO out, old boss back in. The Wallstreet Journal, 18th April.

Martin, R. (2013). Memo to JC Penney: execution is not strategy. Harvard Business Review.

Narse.org. (2014). Breaking news. Retrieved from: http://www.narse.org/breaking.htm [Accessed: 25 Jan 2014].

Nash, M. (2013). What J.C. Penney can teach us about change management | linkage, inc. Retrieved from: http://mylinkage.com/blog/what-j-c-penney-can-teach-us-about-change-management / [Accessed: 25 Jan 2014].

Ostlund, A. (2012). JC Penney strategic marketing plan 2012: product strategy. Master of Science. North Dakota State University of Agriculture and Applied Science.

Rotman, S. (2013). JC Penney’s misfire: what went wrong? Forbes, 24th June.

Talley, K. (2012). J.C. Penney trims headquarters staff. The Wallstreet Journal, 5th April.

The Unfortunate Union Between Bill Ackman And JC Penney Is Over. (2013). Jewish Business News, 15th August.

Tuttle, B. (2013). The 5 big mistakes that led to Ron Johnson’s ouster at JC Penney. Time.

University of Oregon Investment Group. (2014) J.C. Penney. Oregon: University of Oregon Investment Group.

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