ASSIGNMENT 2

QUESTION 1 JCP advocates an informal work environment. Would this change encourage you to work at
JCP? What reasons can you give to support or disassociate yourself from this culture change?

The informal work environment would encourage the student to work at JCP. Part of the JC Penneys
Long Term Plan in 2005 was to make JC Penney a great place to work. As per the case study in page 3,
paragraph 2, Ullman realised that the mood and rigid culture was intimidating new recruits, leading to
high turnover and not attracting new talent. He felt that this was not a conducive environment to
achieve this goal. Brown (2011, pg. 30) mentioned that some pattern of behaviour can facilitate
accomplishment of organizational goals but they can also inhibit or restrict employees
accomplishment1. In this case, the rigid culture was restrictive. Also, according to Cain, A corporate
culture based on support, creativity, and shared values attracts and keeps talented, hard-working
employees2. The informal culture implemented by JC Penney seems to be in line with this statement.
There are two segments to the JCPs changes: the external and internal changes. External changes are
those that can be obviously seen, such as dress codes, changes to environment, etc. Some of the change
campaigns were carried out in interesting ways. This indirectly supports creativity and makes it easier to
catch on to the new culture. The

relaxation of dress code and decoration of own cubicles give freedom to practice creativity. This would
encourage the student to be creative instead of yes men, to be an employee who will think outside the
box instead of sticking to stale ideas. The abolishment of office police removes the constant feeling of
walking on eggshells for fear of getting reprimanded for an offence. This removes unnecessary stress
and allows the student to concentrate on improving work performance instead. It would allow the
student

Brown, D. R. (2011). An Experiential Approach to Organizational Development (8 Edition). New Jersey:

Pearson Education.
2

th

Cain, R. Adopting a Values-Driven Corporate Culture to Create Resiliency. Retrieved on 16 August, 2012
from http://blog.legacyscs.com/Portals/149359/docs/legacy%20%20adopting%20a%20valuesdriven%20culture.pdf

ASSIGNMENT 2

freedom to try out new ways of doing things instead of previously conforming to the set ways for fear of
being reprimanded. The move to encourage employees to call each other by their first names can lead
to reducing the formal barrier between superior and subordinates, helping to improve communication
and interaction between the two levels. If an employee trusts and respects their superiors, they will be
more open during feedback sessions and easier to correct.

Internal changes address deeper issues, such as the attitudes of employees. According to Brown (2011,
pg. 243), Employees who are empowered are more proactive and selfsufficient in helping their
organizations achieve their goals. The introduction of Winning Together Principle (WTP) and the
Retail Academy are examples of empowering the employees.

The WTP are eight principles that address the importance of employees to the company, integrity,
performance, recognition, teamwork, quality, innovation and the community. These guiding principles
encourage employees to have proactive attitudes instead of previous culture of having to conform to
the set ways of doing things.

The Retail Academy encourages career development by grooming potential leaders and provide training
to employees. The idea behind the academy was that well-trained managers will develop better
subordinates. This shows that employees matter to the management and the student would be
motivated to do well to be recognised for the program. The program also allowed the trainees to learn
from top managers such as Ullman and Theilmann personally, which is a great motivator. The
Generation Y are the new group of employees in the market. According to Kazi3, to retain this group of
employees, an organization will have to give consistent feedback and recognition, freedom of creativity,
empowered to solve problems, provide avenues for them to contribute back to society and a few
others. JCPs would not only attract the student to work at JCP but the Generation Y group as well. (602
words)

Kazi, A., 2012 Attracting Generation Y Employees. Retrieved 12 August, 2012 from
http://www.smallbusinessbc.ca/growing-a-business/attracting-generation-y-employees

ASSIGNMENT 2

QUESTION 2 Should top management drive culture change? There is also a counter argument to this.
Provide your analysis of the statement. Which approach would suit JCP?

The student thinks that top management should drive culture change.

However, the counter argument is that it is the system that drives the culture (pg. 14, paragraph 4). The
system refers to the middle and lower management. According to the Organization Iceberg approach
to OD (Brown, pg. 200), the organization is divided into the formal and informal organization. The formal
organization covers areas that are easily observed while the informal organization covers the more
covert elements. If the change interventions do not address both sections, changes introduced might
not be effective. For top management to know the hidden problems, they would have to be actively
engaged with the middle and lower management or know very well the day-to-day operations. Higher
management that lack a direct relationship with groups in the This means that people who

organization will find it hard to drive or to sustain the changes.

deal daily with the culture might be more effective in driving the change process. Culture does not really
set until the middle and lower levels accepts and practices it. Brown (pg. 85) mentioned that Culture
influences how managers and employees approach problems, serve customers, react to competitors
and carry out activities. Middle and lower levels are the ones that deal directly with customers,
suppliers and the industry. They are the ones who handle the operations daily and will know the system
very well. They know exactly what needs to be changed. If they are empowered and are adaptive, they
will work at areas that need to improve until they find the right fit and implement it. When
implemented and practiced, it will be part of the culture. The changes, at times, can be carried out
without directive from top management.

In the case of JCP, top driven culture suits JCP because: i) Top level management has information on the
organization and the market situation. This helps them see a bigger picture and to strategize on the
direction of the organisation to make it more competitive. Middle and lower level managers are often

ASSIGNMENT 2

department or division focused, giving them a more limited view of what needs to be changed.

ii)

Ullman had good skills as an OD practitioner. He took time to talk to the employee, observe their
behaviour and was willing to look outside the company for ideas. Also, these initiatives take time and
resources. Being in top management, he had the authority to allocate the resources and move teams for
the diagnosis process and later for the change initiation. Rigid rules, office police to catch those not
following rules and long standing traditions make it hard for culture change to come from the system.
Brown said that management is responsible for creating a supportive climate and removing barriers
(pg. 244) but in the case of JCP, the store managers and veterans at JCP stores were not supportive of
some changes while most of the associates/employees were. This showed that it would have been hard
for the employees to change as they would be seen as rebelling and thus prefer to conform to keep their
jobs.

iii)

iv)

Commitment of top management, especially Ullman and Theilmann, to the change efforts helped
sustain the changes. According to Fred Faulkes (pg. 7 paragraph 6), for an organisation as old as JCP to
change, any changes has to start from the CEO level and move throughout the organisation. transition
can be made. (Cain). When leadership walks the talk, and

demonstrates complete commitment to the cultural change, a smooth and successful Once the changes
start, commitment from top

management is important to sustain these changes and not let it revert back to the old culture. This was
evident in Ullman and Theilmanns efforts.

(615 words)

ASSIGNMENT 2 QUESTION 3

Is the dismissal of Catherine West justified? Discuss your views and its impact on JCP. The student thinks
that the dismissal of Catherine West was justified. According to the article by Mary Halkias (2007) 4, Ms
West was hired because she had a good track record of developing strategies to increase customer
satisfaction and associate engagement, and to enhance financial performance. Theilmann was
recognised as a leader in customer and employee satisfaction5. Both were very skilled and capable
leaders but Theilmann adapted well whereas Ms. West did not. Theilmanns background was in human
resources and entered JCP as a chief human resource officer, as similar role. Ms. West, however,
entered into a position that was very industry specific which needed a strong operations background,
areas which were new to Ms. West. In page 12 paragraph 4 of the case study, analysts said that it was
difficult for an outsider of that retail industry to absorb details in such a short time. Also, the track
record for people changing industries is not good. The top management would have taken into
consideration all these issues when they set her performance objectives during her orientation process.
The goals set would have been

reasonable for a high achieving executive entering a new industry. The retail industry, as stated in the
case study, is a very industry-specific as well as a fast moving industry. This environment can be termed
as a hyperturbulent environment. High adaptation is required to enable the company to not only survive
but to succeed. In the same article by Mary Halkias, part of Ms. Wests 6 months process included a 90
day of fast-track Retail 101 orientation to help her adapt to the retail industry. She also had the support
of Ullman and other seasoned executives that was available to offer guidance during her work in JCP.
However, all these did not seem to help Ms. West adapt fast enough into the industry. Higher
expectations are normally put on top executives compared to lower levels employees. Executive
development was not a priority but fast results were expected from them. An argument would be that
the company should have tried to fit Ms. West into another position instead of firing her. After all, Ms.
West had strong skills and her full potential was
4

Halkias, M. (2007).Penneys Execs Brief Tenure Costly, Worthwhile. The Dallas Morning News. Retrieved
22 August, 2012 from http://blog.ttnet.net/resources1/2007/02/06/penney-execs-brief-tenure-costlyworthwhile20070206/ 5 (May 29, 2005). JCPenney to Appoint Michael T. Theilmann Executive Vice
President, Chief Human Resources and Administration Officer. JCP Financal Releases. Retrieved on 22
August, 2012 from http://ir.jcpenney.com/phoenix.zhtml?c=70528&p=irolnewsArticle&ID=707511&highlight=

ASSIGNMENT 2

not realised. The statement that Ms. West was not a good fit for JCP could mean that her values,
assumptions and behaviour she brought with her could not fit into the JCPs culture. If they were
different from JCPs culture, then the firing of Ms. West even after only 6 months of working would be a
good move. Ms. West was in a position of influence and could be dangerous for the change initiatives if
she remained. The impact on JCP was minimal as Ms. West was only there for less than 6 months. The
chief operating officer position was vacant for 18 months6 before Ms. West joined and was left vacant
after she left. The structure reverted back to before Ms. West joined, causing very little disruption on
operations. According to Mary Halkias, the $10million compensation, although seems like a big sum, was
not a big impact on JCP as their sales for 2006 were recorded to be $20billion. If the company was sure
that Ms. West was the wrong fit for JCP, it was better to let Ms. West go sooner rather than later as the
company would have incurred more losses if done later. Although this was a bold move by Ullman that
did not work out, he was still held in high regard for his change initiative for JCP.

(590 words)

Halkias, M. (2007).Penneys Execs Brief Tenure Costly, Worthwhile. The Dallas Morning News. Retrieved
22 August, 2012 from http://blog.ttnet.net/resources1/2007/02/06/penney-execs-brief-tenure-costlyworthwhile20070206/

ASSIGNMENT 2

QUESTION 4 What are the reasons for the success of JCP? Provide and explain your reasons.

Reasons for the success of JCP: i) Anticipated the need for change

To get out of the financial problem in the late 1990s, the management was mainly on reactive
management. After surviving the crisis, Ullman wanted to move into the

renewing/transformational management mode.

His objective was to take JCP into the

industry leadership level. Even when he was getting advice from other companies for ideas, one of the
feedback was to not celebrate the turnaround for too long, and to start initiatives for the next round of
growth (pg. 8, paragraph 2). Taking the time to understand the organizations culture, look outside for
ideas

ii)

According to Brown (2011, pg. 244), he mentioned that members bring into the organization their
values, assumptions and behaviours. Ullman, with his years of experience, certainly had a lot of these
when he joined JCP. However, he took the time to understand the organizations culture, to talk to the
employees to get their feedback and to observe their behaviour before coming up with the changes. He
also continued to observe the changes and modified it according to the employees feedback. Even
though Ullman had vast experience in the retailing industry, he still looked around for ideas, talked to
key people who had led turnarounds for their companies and also sent a team to IBM.

iii)

Appointment of Theilmann

The appointment of Theilmann as executive vice president, chief human resources and administration
officer was a good move. With his past experience and him being sold to the organizations objective of
making JCP a great place to work, he was able to work well with Ullman to bring about the culture
change.

Changing the culture from a rigid one (from long standing tradition) to a more informal culture was a
major change. According to the change model (Brown, 2011, pg 169), major changes with big impact on
culture would meet with high resistance and have a low chance of

ASSIGNMENT 2

success. Theilmanns strategy of implementing a series of small changes instead of a sudden big change
did show a success in starting the cultural change process.

iv)

Top management commitment to change, repeated engagement with the lower level employees

The Retail Academy was to groom leaders to internalise the key values and focus of JCP. Training was all
done in-house and mainly by top executives, including Ullman and Theilmann. Teaching at the Academy
helped them groom the leaders as well as provide repeated engagement with the lower level
employees. Other change campaigns were initiated by top management. extensively implemented to
bring about the desired change. They were carefully and

v)

Value of employees

Ullman felt that there was a correlation between engaged associates and store profitability (page 1,
paragraph 1). He had put a dollar value to employee turnover due to the rigid culture. A lot of the
change initiatives focused on improving employees job satisfaction. They wanted JCP to be a place
where employees would build a career in. The Retail Academy was a move that showed that the top
management recognised their abilities and wanted to invest in their career by being part of the training
team. Reward for performance was implemented and a more inclusive environment was being created.

vi)

Clear goals and objectives

Quoting from Carlos Ghosn, If people dont know the priority, dont understand the strategy, dont
know where theyre going, dont know what is the critical objective, youre heading for trouble7. For
the JCP change initiatives, the objectives and goals of the were well communicated to all levels of the

organization. Campaigns, such as the Just Call Me Mike! and Everyday Matters, were well executed
with training materials, briefing by managers, posters, letters to employees, and others to ensure clear
communication to the employees. JCP also conducted the first leadership conference for store managers
to align the priorities of the stores with the objectives of JCPs Long Range Plan (pg 9, paragraph 8).
(652 words)

Hughes, K. (2003). Redesigning Nissan(A): Carlos Ghosn Takes Charge. INSEAD, (pg.8).

ASSIGNMENT 2

REFERENCE

Brown, D. R. (2011). An Experiential Approach to Organizational Development (8th Edition). New Jersey:
Pearson Education. Cain, R. Adopting a Values-Driven Corporate Culture to Create Resiliency. Retrieved
on 16 August, 2012 from
http://blog.legacyscs.com/Portals/149359/docs/legacy%20%20adopting%20a%20valuesdriven%20culture.pdf Halkias, M. (2007). Penneys Execs Brief Tenure Costly, Worthwhile. The Dallas
Morning News. Retrieved 22 August, 2012 from
http://blog.ttnet.net/resources1/2007/02/06/penneyexecs-brief-tenure-costly-worthwhile-20070206/
Hughes, K. (2003). Redesigning Nissan(A): Carlos Ghosn Takes Charge. INSEAD, (pg.8). Kazi, A., 2012
Attracting Generation Y Employees. Retrieved 12 August, 2012 from
http://www.smallbusinessbc.ca/growing-a-business/attracting-generation-y-employees (May 29, 2005).
JCPenney to Appoint Michael T. Theilmann Executive Vice President, Chief Human Resources and
Administration Officer. JCP Financal Releases. Retrieved on 22 August, 2012 from
http://ir.jcpenney.com/phoenix.zhtml?c=70528&p=irolnewsArticle&ID=707511&highlight=