Essay Instructions: Submit a 1 page double-spaced analysis of the following case study on a Microsoft Word Document.
Answer each of the questions BELOW. Answer fully and in paragraph style. Do not use numbers for the paragraphs…include the question in your response. Don't forget to start with an introductory paragraph and conclusion paragraph. The Wegman’s website is provided as a resource.
Use a 12-point font, Times New Roman and a cover page. Margins should not exceed 1 inch. Include a reference page of at least 2 references.
ORGANIZATIONAL CUTLURE
Organizational culture refers to a system of shared meaning held by members that distinguishes the organization from other organizations. Organizational culture is an intervening variable. Employees form an overall subjective perception of the organization based on such factors as degree of risk tolerance, team emphasis, and support of people. This overall perception becomes, in effect, the organization’s culture or personality. These favorable or unfavorable perceptions then affect employee performance and satisfaction, with the impact being greater for stronger cultures.
Just as people’s personalities tend to be stable over time, so too do strong cultures. This makes strong cultures difficult for managers to change. When a culture becomes mismatched to its environment, management will want to change it. However, changing an organization’s culture is a long and difficult process. The result, at least in the short term, is that managers should treat their organization’s culture as relatively fixed.
Case Incident – Wegman’s
Amid corporate giants such as Microsoft, GM, and General Electric stands a relatively small grocery store that was named by Fortune magazine in 2005 as the best company to work for, primarily because of how well its employees are treated. Typically, grocery stores are not thought of as great places to work. Hours are anything but 9 to 5, and the pay is low compared to other occupations. The result is an industry that sees high annual turnover rates. Employees at Wegmans, however, view working for a grocer a bit differently. Instead of viewing their job as a temporary setback on the way to a more illustrious career, many employees at Wegmans view working for the grocer as their career. And given Wegman’s high profitability (it had sales in 2004 of $3.4 billion from 67 stores, giving it one of the highest profit-per-store ratios in the industry), it looks like the grocer will be around long enough to make such careers a reality for those who pursue them.
Why is Wegman’s so effective? One reason is its culture. The chain began in 1930 when brothers John and Walter Wegman opened their first grocery store in Rochester, New York. One of its distinguishing features was a café that seated 300 customers. The store’s immediate focus on fine foods quickly separated it from other grocers—a focus which is maintained by the company’s employees, many of whom are hired based on their interest in food. In 1950, Walter’s son, Robert, became president and immediately added a generous amount of employee benefits such as profit sharing and medical coverage, completely paid for by the company. What was Robert’s reason for offering such great benefits? “I was no different from them,” he said, referring to the company’s employees. Though the benefits are still generous at Wegmans, the rising cost of health care has forced it to have all employees contribute for coverage.
Now, Robert’s son, Danny, is president of the company, and he has continued the Wegman’s tradition of taking care of its employees. To date, Wegman’s has paid more than $54 million in college scholarships for its employees, both full time and part time. In addition to benefits, employees receive pay that is well above the market average. As a result, annual turnover at Wegman’s for full-time employees is a mere 6 percent, according to the Food Marketing Institute, when is it is 24 percent in the industry overall.
The culture that has developed at Wegman’s is an important part of the company’s success. Employees are proud to say they work at Wegman’s. For example, Sara Goggins, a 19-year-old college student who works part time at Wegman’s, recalls when Danny Wegman personally complimented her on a store display that she helped set up. “I love this place,” she says. “If teaching doesn’t work out, I would so totally work at Wegman’s.” And Kelly Schoeneck, a store manager, recounts that a few years ago, her supervisor asked her to analyze a frequent-shopper program that a competitor had recently adopted. Though she assumed that her supervisor would take credit for her findings, Schoeneck’s supervisor had her present her findings directly to Robert Wegman.
Maintaining a culture of driven, happy, and loyal employees who are eager to help one another is not easy. Wegman’s carefully selects each employee, and growth is often slow and meticulous, with only two new stores opened each year. When a new store is opened, employees from existing stores are brought in to the new store to maintain the culture. The existing employees are then able to transmit their knowledge and the store’s values to new employees. Managers especially are ingrained in the Wegman’s culture. More than half started working at Wegman’s when they were teenagers. Says Edward McLaughlin, director of Cornell’s Food Industry Management Program, “When you’re a 16-year-old kid, the last thing you want to do is wear a geeky shirt and work for a supermarket. But at Wegman’s, it’s a badge of honor. You are not a geeky cashier. You are part of the social fabric.”
Employees at Wegman’s are not selected based on intellectual ability or experience alone. “Just about everybody in the store has some genuine interest in food,” states Jeff Burris, a supervisor at the Dulles, Virginia store. Those employees who do not express this interest may not fit in and are sometimes not hired. The result is a culture that “is bigger than Danny in the same way that Wal-Mart’s became bigger than Sam [Walton],” says Darrell Rigby, a consultant at Bain & Co.
For additional information on Wegmans, visit this web site: http://www.wegmans.com/webapp/wcs/stores/servlet/HomepageView?storeId=10052&catalogId=10002&langId=-1
Questions to be answered
1. How would you characterize Wegman’s culture - strong or weak? Why?
2. How is the strength of the culture at Wegman’s likely to affect its employees, particularly new hires?
3. Wegman’s attempts to maintain its core cultural values by hiring individuals who are passionate about the food industry and by staffing new stores partly with existing employees. How can culture be a liability to an organization? What are some advantages and disadvantages of trying to impose a similar culture throughout different areas of a company?
4. What is the primary source of Wegman’s culture, and what are some ways that it has been able to sustain itself?
