Introduction
As a retailer of apparel and home goods, J.C. Penny was founded in 1902. It was founded by a man by the name of James Cash Penny and was known as one of the biggest home furnishings shops. There were fundamental strategies at J.C. Penney that shaped their culture prior to the hiring of Johnson as the company's chief executive officer. One of the cultures used tokens and incentives to get people to come into the store. To draw clients, other promos were also run.
The Strain on Prices
However, since the majority of the goods were sold at half price, which put a strain on the already-set prices, a loss was being realized. Due to the circumstances described above, goods were sold on discount. This situation led to the company hiring Johnson, who was given the responsibility of managing the department store chain. The main reason was to fix the situation and the most viable person was Johnson, who had recorded high returns in his previous work.
New Strategies by Johnson
Johnson came up with new strategies which included doing away with the discount culture and refashioning the stores. Johnson's other new cultures included changes in the store layout, pricing, removal of employee commission, changing the logo, promotion strategies, and having entertainment areas for customers. His idea was to make J.C. Penny a mini-mall with separate stores under it. The name brands saw an increase while a scale back was realized on the store brands, which initially collected over half of the revenues.
The Failure of Johnson's Strategy
Johnson's strategy failed miserably as the sales at Penny's declined from a whole 17 billion U.S dollars to eleven million. This was a decline of around 11 percent of the total revenue. Before Johnson came to Penny, the employees were around 120,000 but by the time he was leaving, the number had reduced to about 12,000. A necessity to sell some assets or close down several stores was experienced in order to settle the loans Penny had. The mistake Johnson did was launching the strategies without a test experiment on the same.
Organizational Culture
An organization's culture comprises aspects such as productivity, engagement of employees, invention, retention, diversity, and finally, the future health of the organization. Before the change in leadership at C.J Penney was made, the culture based its goals on the Penney's idea in which was centralized to promote customer care. Following the changes in leadership, the culture changed to the winning together principle. When Johnson took management of C.J. Penny, he introduced the complacency culture. This was an effort to fix the problem at Penny's, through the employment ideas learned from previous jobs.
Recommendations for Johnson
Given a chance to meet with Johnson, I would recommend a three-phase process. First is being able to understand what the target market values. For instance, Penny's market valued the discounts offered. The best option in such a case would be keeping the discounts strategy but trying to improve the idea. Launching of new designs should also be done after thorough involvement of the stakeholders.
The second in the process would be appreciating the history and culture of the people in the organization. An attack on their legacy would typically alienate the people resulting in a reduction in the labor force as well as their efficiency. The last in the process would be, in a measured approach, anticipating changes from and in the activist investors. Meeting their needs makes the manager a less likely target of the activist investors whose main aim is seeing the prices of stock going up.
References
Anderson, D., & Anderson, L. A. (2010). Beyond change management: How to achieve breakthrough results through conscious change leadership. John Wiley & Sons.
Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence. Upper Saddle River, NJ: pearson.
Alvesson, M., & Sveningsson, S. (2015). Changing organizational culture: Cultural change work in progress. Routledge.
