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The case incident describes a huge grocery and drug company, Albertsons, which has
over 2,400 supermarkets and its drug brands make it the fifth largest drug-company in the
United States. However Albertsons has hard times as its main competitor, Wal- Mart
Company, eats away at its market share. As Albertsons revenue remained flat and profits
decrease, the administration decided to hire Larry Johnson to turn around the company.
Johnson was working for General Electric, where he was assigned to fix GE’s European
division. While working for General Electric Johnson met the training specialist Ed Foreman.
Johnson made some changes in GE’s division, such as transferring factories to countries with
low labor cost, closing down inefficient plants, and later brought in Foreman. Foreman
contributed in General Electric through his three - day program, which aimed to change
employees’ attitude, in a way that employees would become more energetic, showing more
zeal towards the company. According to Johnston, the program worked perfect as it led to
believed that his program application would have the same results. Moreover he decided to
subdue his $10 - million budget on this training. The training schedule had formed as
followed: training of 10.000 managers until the end of 2004, and then they would train all
Albertsons first grocery store was founded in 1939 and its success led to the opening
of additional stores in other neighboring towns. The company kept growing and twenty years
later Albertsons became a publicly traded company on the New York Stock Exchange.
Albertsons expanded in the field of drugs and its growth continued, opening additional stores
In the area of technology Albertsons made progressive steps. In recent years added a
system "check out while you go", where shoppers scanned products as they shopped and
quickly paid before leaving, but this system has been removed from several stores. In other
Attitudes and Job Satisfaction 3
areas Albertsons offer the option to shop from home through the company’s web site; the
items were either delivered to customer’s place or the pick ups were arranged at the store.
Albertsons also used a savings program called "Bonus Buys." "Bonus Buys" were available
to anyone that shopped at Albertsons and allowed the customers to see the savings.
Wal – Mart Company was founded in 1962 and publicly traded on the New York
Stock Exchange in 1972. Today Wal - Mart is a multinational company that operates in
fifteen countries and under fifty five different names. In U.S. the company does business in
nine different retail formats in: supercenters, food and drugs, general merchandise stores,
small markets, cash and carry stores, membership warehouse clubs [retail stores, where
customers buy large quantities at a low price due to the no – frills (removing the products’
essential features in order to keep their price down) format of the store, apparel stores,
discount stores and restaurants (includes general merchandise and a selection of groceries)].
Many of these stores also have a garden center, a pharmacy, Tire & Lube Express, optical
center, one-hour photo processing lab, portrait studio, a bank branch, a cell phone store and a
Revenues and profits are the map for a company to check whether it does well in
business or not, review corporate strategies and improvement fringes. Albertsons saw its
revenues from sales and other charges to customers being flat and its profit decreasing. This
problem did not occur by any external factor, for instance a general economic situation, but
from internal factors, since, as mentioned, a big share of their market was “transferred” to
their main competitor Wal – Mart Company. Hence, the issue is not only about the profit
decrease, but the fact that the company actually lost that share of customers.
Factors that could have contributed in profit falling and customers’ loss may be the
products’ quality, price, variety, customers’ service and company’s overall expenses. So the
The fact that customers changed their preference and chose to visit Wal – Mart
instead of Albertsons or any other competitor is not random. Wal – Mart’s strategy and
culture, according to Sam Walton - the founder of the company - is “Offer shoppers lower
prices than they get anywhere else”. Today Wal – Mart is so huge that has the power to shape
the labor markets, pushing suppliers to sell merchandise at the lowest price. Moreover Wal –
Mart is not a typical grocery store, as a customer visiting the store can be supplied with
products of / about grocery, pharmacy, photo, car, fitness, toys, apparel, shoes, jewelry,
furniture and other home products, movies, music and books, electronics and office products.
So, why customers should chose to go to different places to get what they need, while they
can get everything in one store and in low prices? And is the wide range and low prices the
Albertsons structure and policy do not allow having this huge range of products, as
Wal – Mart’s, and this is known to the public; thus the issue that led customers in changing to
Wal – Mart choice was the price differences. So administration must take actions and try to
bring those customers back, by minimizing company’s expenses and trying to close cost
effective deals with suppliers, adjusting products prices as much as possible, or even increase
company’s own labeled products. Albertsons turning to media and press could also increase
customers’ visits as a first step and increase of actual sales later. Budget allocation in
commercials; promoting the lower prices in combination with the human, friendly side of the
company, which gives gravity in customers’ – company relationships and customers’ service;
Of course according to Wal – Mart’s reputation, prices are the lowest in the market,
due to the strategy that was mentioned above. So what could Albertsons do in order to cover
this difference in costs? Improving the customers’ service seems to be the answer; because
low prices are what every consumer is after, but always in combination with service quality.
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Wal – Mart strategy mentions that in order for the company to insure operational
success it focuses on its people. So the company focuses managers and employees on a
managers attend on a weekly base a cultural training, so that they act like business owners,
looking for opportunities to solve problems and eliminate business risk. Another plan that is
included in the company’s strategy is for all the employees to think and act like retail
merchants; focus on how to help the stores improve service to customers and to make
business decisions on behalf of customers. Other plans that Wal – Mart’s strategy includes
are expenses reduction at the bottom line, hiring people from colleges with retail institutes,
But facts and other employees’ and customers’ testimonies show that Wal – Mart
does not follow the plan it presents. In the past forty lawsuits had been filed by employees
who said that they were forced to work overtime for no pay, other employees mentioned sex
discrimination, as the article of USA Today (issued in 2003) presents; only Wal – Mart’s
managers mentioned flattering comments for the company. Additionally many customers
have mentioned that the company maintains indeed low prices, but customers’ service is of
bad quality. But nevertheless Wal – Mart keeps growing and growing, so low prices are the
primary factor.
Johnston mentions in this case incident “Positive attitude is the single biggest thing that can
change a business”. An employee who is happy and satisfied with his/her work, will work
even harder and will overpower even bigger effort to improve his/her productivity, because
he/she has positive emotions, feels engaged to his/her job. If an employee has negative
feelings and is not happy with his/her job will not feel the need or want to empower any extra
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effort to improve productivity. However increase of productivity does not only depend on the
employee’s feelings or moods, but also depends on management, which must be acquired
with skills that allows it to handle different situations within the company in order to increase
As studies have proved that employees’ attitudes are directly related, along with job
satisfaction, to the company’s success, a company must continuous work on forming both;
empowering cohesiveness and building commitment by making employees feel the company
as family and as if they were co – owners, to speak up their opinion and not be afraid of
management.
Foreman’s program aims in building cohesiveness, but misses the main point; not all
employees have the same needs. For example Foreman’s program foresees starting at 6.00
a.m. yoga, mind – exercises, diet, breakfast and lecture on attitude. But not all employees in
this case have this time available and even if they did have it, it is not certain that they would
like to dedicate it in this program. This program, in a best case, could be applied in a new
group of Albertsons employees. An employee, who has been working for the company for
years, may need other proposals, such as more flexible working shifts, bonuses or raises, a
space for employees’ children in a nursery school or kindergarten format, which would be a
great help for mothers employees, or other needs that would be better to be discussed with
management.
Albertsons can schedule trainings and seminars and name them “Win to Win
Program”, because this is actually the case; employees win since they acquire more skills and
their productivity increases and the company wins from employees’ productivity. And
employees would get the message. Additionally in seminars they could include, a brief
financial summary of Albertsons and if available from competition, other competitors’ data,
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such as strategies, culture, their strengths and weaknesses, Albertsons’ strengths and
weakness and exchanging ideas of how the weakness of competitors could turn in Albertsons
takes good care of its people, helps them reach their potentials and has respectful attitude
towards them; and customers’ testimonies describe the good product quality and the
customers’ service.
For every company, working on its employees’ attitude, job satisfaction and building
a healthy relationship needs continuous and full time work from both sides; because this
effort does not come only from one side, and it is the recipe for a strong, good co-operation.
What I obtained from my personal working experience in the field of relationships between
companies and employees is that when a company abandons its employees, employees
SOURCES
www.albertsonsmarket.com
http://en.wikipedia.org/wiki/Albertsons_(SuperValu)
www.walmart.com
http://en.wikipedia.org/wiki/Wal-Mart
http://findarticles.com/p/articles/mi_m0FNP/is_16_40/ai_78544549/
http://money.howstuffworks.com/wal-mart.htm
http://www.hrmagazine.co.uk/news/1029675/HR-division-Wal-Mart-drives-companys-
success-people/
Testimonies:
http://money.howstuffworks.com/wal-mart.htm
http://www.chacha.com/question/are-groceries-cheaper-at-albertsons-or-walmart
http://www.financialcrisis2009.org/forum/Corporations/Should-I-work-at-Wal-Mart-or-
Albertsons-256053.htm
http://www.consumeraffairs.com/retail/walmart_customer_service.html
http://www.usatoday.com/money/workplace/2003-02-09-wal-mart-cov2_x.htm
http://www.yelp.com/topic/pasco-wal-mart-verses-albertsons-the-price-difference
http://www.careerbliss.com/company-reviews/albertsons-reviews-262973/
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