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Whole Foods Market Culture and Ethical Climate

Research · October 2016

DOI: 10.13140/RG.2.2.35584.43527

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Whole Foods Market

Culture and Ethical Climate

Jawaher Alotaibi
July 23, 2015

 Whole Foods Market (WFM) is a natural and organic supermarket that it’s

known for healthy and natural food products; the company focuses on providing the

highest quality of products. WFM is one of the biggest supermarkets chains in the US.

Because of WFM’s strong position in the US market, this paper will assess and

discuss its cultural and ethical climate for better understanding.

Organizational Culture Assessment Instrument (OCAI)

The Organizational Culture Assessment Instrument (OCAI) evaluates six

important dimensions of an organization’s culture in a competing values framework

which are four quadrants that form the visual representation of the competing values

framework; the Clan/Family Culture (A), the Adhocracy Culture (B), the Market

Culture (C), and the Hierarchy Culture (D). This assessment will eventually provide

the organizational leaders with a scenario of what characteristics their organization

have, in addition to their values, and how they operate (Cameron & Quinn, 2006).

1. Dominant Characteristics 2. Organizational Leadership

Now Preferred Now Preferred
A 26.4 33.5 A 35.8 32.5
B 16.9 25.7 B 15.3 27.8
C 25 18.3 C 10.2 14.5
D 31.7 22.5 D 38.7 25.2
Total 100.00 100.00 Total 100.00 100.00
3. Management of Employees 4. Organization Glue
Now Preferred Now Preferred
A 34.4 37.1 A 47.9 39.6
B 12.1 26.3 B 23.3 30.2
C 10.9 14.9 C 13.1 18.3
D 42.6 21.7 D 15.7 11.9
Total 100.00 100.00 Total 100.00 100.00

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 5. Strategic Emphases 6. Criteria of Success
Now Preferred Now Preferred
A 22.50 29.4 A 19.2 24.3
B 16.10 21.3 B 27.9 20.9
C 23.70 24.1 C 30 36.2
D 37.70 25.2 D 22.9 18.6
Total 100.00 100.00 Total 100.00 100.00

The OCAI indicates a mean

score for each of the six subscales; the
Clan Culture (31.03%), the Adhocracy
Culture (18.6%), the Market Culture
(18.82%), and the Hierarchy Culture
The Average of the Six Subscales
Now Preferred
A 31.03 32.73
B 18.60 25.37
C 18.82 21.05
D 31.55 20.85
Total 100.00 100.00

(31.55%). WFM’s culture can be described as a culture that drives commitment

through team building, achievement through employees’ participation, change and

development through anticipating needs, profitability through creating external

alliances, and efficiency through process control. Therefore, we can understand that

WFM’s culture is a combination of the four quadrants. However, this combination,

which is based on OCAI overall results, is not set equally since we can notice that the

clan culture (A = 31.03%) and the hierarchy culture (D = 31.55%) dominate on the

company culture in the current time.

The Actual Culture vs. Preference

Now, WFM’s culture has great involvement with an emphasis on its human

resource. It seeks development in order to satisfy its customers and stay in the

business. Also, the company cares about its reputation and success the most since it

thinks that they are the main keys to compete with rivals in the long-term. In addition,

the company believes that having sustainability will lead to profitability and high

quality.

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 However, since WFM exists in unstable environment, it's difficult to produce

a successful strategy in a hierarchy culture, the domination culture, particularly for

large and leading organizations. In addition, strong employees’ empowerment is

something that WFM is focusing on by giving each store’s team the space to manage

and direct activities by the team itself (the clan culture). For that reason, WFM has

adapted a divisional structure in every region to allow the team of management to

take decisions immediately; decision can be made without reaching back to WFM’s

headquarter to adapt to any change that arises suddenly. The new strategy will take

the organization more towards other types of culture; the adhocracy culture, and the

market culture (Whole Foods Market, 2015).

In short, the preferred culture is very close to the current one, however, it has a

smaller percent of the hierarchy culture (20.85%) and greater percent of the adhocracy

culture (25.37%) and the market culture (21.05%) in order to increase the company’s

market share and profitability while discovering new resources and working on

development its current products to sustain its business.

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Martin’s Three Perspectives

Joanne Martin states that culture is conceptualized from three different

perspectives (integration, differentiation, and fragmentation). Thus, culture represents

the individual interpretation of a range of manifestations which results in motivation

and action (Martin, 2002). Based on WFM’s culture characteristics, we can say that it

has an integration culture that encourages consensus by communicating regularly,

openly and thoughtfully with fellow team members and leadership; the company set

up regular meetings to discuss team operations in order to make consensus decisions

while there is an appreciation for each other's contributions; these meetings are self-

directed. Also, the company removes any conflicts and guarantees that win-win

solutions are existed. Moreover, one of the company’s main goals is “achieving unity

of vision about the future of [the] company, and building trust between team

members” which illustrates how the consistent of several manifestations with each

other lead to actions that serve the shared values in WFM. The company delivers its

values clearly which means that there is no place for ambiguity (Whole Foods

Market, 2015).

Chand’s Continuum of Organizational Cultures

According to Samuel Chand, there is five different types of cultures that one

of them will definitely defines the culture of any organization. These types are

accepting, stagnant, discouraging, and toxic. So, by analyzing WFM’s culture, we can

understand that it has an inspiring culture that gives people the chance to be at their

best in performance and is willing to accept any necessary change for highest

performance and success. In its inspiring culture, senior leaders invest in their

development, whereas other cultures act as resistors to change. These other cultures

don’t have trust in people (Chand, 2011).

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 On the contrary, WFM believes that change is necessary since the company

identifies the environment in which it operates as unstable one that requires fast

actions in order to maintain its market position and reinforce its “belief that

companies should operate with a higher purpose beyond profits, and create value for

all involved”; WFM does that through the development of its own people and

building trust, therefore, the company has its own training programs for its employees

and its leaders as well.

Moreover, everyone in WFM knows that the core objective is promoting

healthy, organic food for our own health, and well-being. WFM states this objective

as a guiding principle that informs every decision it makes. Besides, those who work

in WFM know that the company support several causes. It has several non-profit

organization; one of them is Whole Planet Foundation which focuses on combating

poverty and promoting self-sufficiency in third-world. So, WFM’s employees and

even its leaders have a sense of purpose because they understand its organization

mission. Furthermore, WFM encourages environmentally practices for every aspect of

store, facility and office operations. It uses renewable energy credits (RECs) to offset

100% of the electricity used in its locations (Whole Foods Market, 2015). WFM

operates for more than just having profit!

WFM’s Ethical Climate

Ethical leadership has been acknowledged as a vital method to the success of

ethics programs, therefore, by using the Ethical Leadership Scale, we agree that WFM

has a high ethical leadership. This ethical leadership is based on a combination of

characteristics and behaviors that embrace establishing integrity and high ethical

values. WFM’s leadership is a respectful one that has fair management of employees,

and holds employees accountable for ethical manner (Brown, Trevino, & Harrison,

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2005). In addition, based on my reading and research, I found that most of WFM’s

employees have a good level of awareness towards the company’s code of ethics; due

to importance of values that form a key part of the company's overall culture which

affects many important activities and relationship, these values are defined as the

principles that guide the organization internally and externally. WFM communicates

its ethical expectations as well as its policies clearly to insure that employees

understand their ethical responsibilities. Besides, WFM has high level of employees’

involvement regarding ethical decision making due to its decentralization of making

decisions; the company's divisional structure, in every region, allows taking decisions

immediately; its store’s team are authorized employees to manage stores. Simply,

employees usually participate in the process of making decisions to keep a high

ethical standard and increase the organizational efficiency.

Overall, ethics are considered an essential part of WFM since they are the

principles that direct the organization's behavior while governing individuals and

groups. Therefore, WFM's has a strong ethical climate that reflects the shared

perceptions of ethically correct behavior and how ethical issues should be solved in

the organization. Since WFM's employees have a good level of awareness regarding

WFM's code of ethics, they can determine whether something is right or wrong. In

short, WFM’s leaders communicate its code of ethics to employees leading to

increase the employees’ awareness of these ethics which results in making the

employees’ involvement in making ethical decisions very effective to create a strong

ethical climate. (Beeri, Dayan, Vigoda-Gadot & Werner, 2013).

WFM’s Culture and its Leaders’ Values

WFM hires those who adapt its culture and values; it seeks to have leaders

with in common values to be part of the company, however, it seeks those who are

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not reluctant to any change opportunity. Therefore, the company’s culture as an

integration one reflects a high degree of its leaders’ values and characteristics; even

its employees.

Finally, John Mackey who is the Chairman and CEO of Whole Foods Market

promotes a lifestyle and company of health based on ethical principles. Mackey’s says

that all companies should have a higher purpose to improve the quality of life for all.

Also, he thinks that a good management leads by example and taking actions not

talking. In addition, he states that “[he] communicates the mission and values of

Whole Foods at every opportunity and [tries] to live those core values [himself] with

complete fidelity. Fidelity to the mission and values builds trust, while any deviance

undermines it. High trust organizations and hypocritical leadership are mutually

exclusive” (Mackey, 2011).

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 References

Beeri, I., Dayan, R., Vigoda-Gadot, E., & Werner, S. (2013). Advancing ethics in

public organizations: The impact of an ethics program on employees’

perceptions and behaviors in a regional council. Journal of Business Ethics,

112 (1), 59–78.

Brown, M., Trevino, L. K., & Harrison, D. (2005). Ethical leadership: A Social

Learning Perspective for Construct Development and Testing. Organizational

Behavior and Human Decision Processes, 97, 117–134.

Cameron, K. S. & Quinn, R. E. (2006). Diagnosing and changing organizational

culture: Based on the competing values framework. San Francisco, CA: Wiley

(Jossey Bass).

Chand, S. R. (2011). Cracking Your Church's Culture Code: Seven Keys to

Unleashing Vision and Inspiration. San Francisco, CA: Jossey-Bass.

Mackey, J. (2011). The HBR Interview: What Is It That Only I Can Do? Retrieved

from https://hbr.org/2011/01/the-hbr-interview-what-is-it-that-only-i-can-do

Martin, J. (2002). Foundations for Organizational Science: A Sage Publications

Series: Organizational culture: Mapping the terrain. Thousand Oaks, CA:

SAGE Publications, Inc.

Whole Foods Market. (2015). Whole Foods Market. Annual Stakeholders' Report

2014: Form 10-K. Retrieved from

http://assets.wholefoodsmarket.com/www/company-info/investor-

relations/annual-reports/2014-WFM-10K.pdf

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