Organizational Behavior Comparative Analysis by 575zVr97

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The Grocery Wars: An Organizational Behavior Comparative Analysis of Whole Foods Market,

                                  Kroger, and Walmart
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                                             Abstract

The literature reported that a mechanistic organization was the type of organization that was

described by specialized differentiation between jobs, distinct expectations for exactly what the

organization provided to employees, and the reciprocation expected; it was characterized by

behavior that was governed by clear policies and rules, and an extreme concentration upon a

military style of hierarchy wherein instructions flowed down and responses trickled upward. The

mechanistic type of organization has been described as the form taken when an organization first

starts out. Mechanistic was one polar extreme of an organizational structure, as opposed to the

other polar extreme of organizational structure known as the organic. The organic structure, as a

business, was stable and did not pull resources, to grow, from the business environment.




                                            Keywords


 Grocer, food, Walmart, Kroger, Whole Foods Market, CEO, management, business, behavior
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                                           Introduction

        The uncertainty in an organizational environment can determine an organization's

structure. If the mechanistic and organic organizational structures are polar opposites, or the

extremes of organizational structure, an examination of these extremes and some combinations

of those extremes could provide some valuable organizational structure insights. This paper will

discuss some of those aspects in order to provide some insight into organizational structure

through six facets secondary to organizational structure: mechanistic organizational structure;

organic organizational structure; comparison and contrast of organic and mechanistic structures;

organizational examples closer to each model; measurement of organizational uncertainty; and

approach for determining proper organizational structure. A brief conclusion follows to tie

together some of the aspects discussed below.

           Impact of Diversity Management Upon Employee Satisfaction and Morale

       Behm (2009) found that a factor that indicated that a company was a well run company

was that management was able to compensate for stress levels in the workspace and in the

"homes of employees" (p. 44). Behm further noted that job satisfaction was then a perceived

result of this ability to rule and govern the employment physical environment and the perceived

workspace, which then had a serious effect upon the employees' perceived job satisfaction

(Behm, 2009). The literature also related that workspace outcomes that were not positive then

contributed to lower self-esteem and increased levels of stress for employees (Blackwell, Snyder,

& Mavriplis, 2009).

       Whole Foods Grocers determined that even their co-founder, chairman, and CEO, Jim

Mackey, was not immune from direction in his perceived workspace, by filing updates to

company policy and new updates with the Securities and Exchange Commission (SEC), which
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indicated that no one at the company would be allowed to make any comments on private

Internet blogs, or on the Internet in general, and that all comments to the outside world would be

sanctioned first and listed on company letterhead or official sites second (Havenstein, 2007).

The fact that no employee was immune from corporate censure was also in earlier topical news,

over the past few years, concerning other grocery chains, such a Walmart and Kroger, wherein it

was indicated by top management that all comments to the public would come through official,

company-based sources so that such comments could be monitored and reviewed for public

consumption in order to stand the company in better stead with the public and demonstrate

employee satisfaction and positive morale within the firm (Snavely, 2003).

       Main line grocers, such as the organic food Whole Foods Market, the price-driving

Walmart chain, and the highly unionized, strictly-run, Ohio-based Kroger Stores, were all in

agreement that the public needed to be directly influenced with only corporate disseminated

news. Tales of employee satisfaction and high morale among their workers and managers,

regardless of the actual effects or employee experiences, in order to make the public digest a

positive experience, were perceived by top management of these grocery chains to invite more

shoppers. Whether these tactics actually worked to raise profits and influence the public image

of these grocery chains was open to question because the mixed profit results in the real

marketplace did not necessarily bear out this train of thought with regard to the actual resultant

mixed-bag of profits and losses for all three chains (Steverman, 2009).

            Organizational Behavior Theories and Employee Management Practices

       Adams' equity theory related, as a particular worker moved from the benevolent stage

through the sensitive stage to the entitled stage, that the worker understood that the amount of

acknowledgement for their contribution gained in relative importance and when the
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acknowledgement was lacking or unattainable, the worker sought outside explanations and

attributed a perceived failure of the acknowledgement for their contribution to the organization

(Adams, Treadway, & Stepina, 2008). Adams, Treadway, and Stepina (2008) acknowledged that

original research concerning equity theory contributed to the tenet described as sensitivity, which

had to do with how workers viewed their personal judgments of how equitable their relationships

were with others "in the workplace" (p. 549). Walmart employees described to our family, from

decades of personal observations in Walmart stores, that employee actions seemed to have had

little value for themselves, the store, and their co-workers. This could be part of the reason for

the increasing number of lawsuits filed against the Walmart store chain, by their current and

former employees, and for the increasing number of discrimination, female gender abuse, racial

discrimination, and Equal Opportunity Employment violation claims filed with labor boards and

EEO entities across the nation.

       Anseel and Duyck (2009) mentioned that there were a number of important factors that

could affect a potential job applicant's "attraction and subsequent intentions and behavior" (p.

208). The principal factor of attraction described by Vroom's expectancy theory was that

employees particularly looked for employment that: was significant and substantive; provided

chances for advancement and a solid future; and a workspace filled with peers conducive to the

provision of effective training (Anseel & Duyck, 2009). Although this seemed to describe the

Kroger Foods atmosphere, personal anecdotes from employees at the Kroger store across the

street related that the strict management practices of the grocery chain continued to result in

employee grievances filed with the union and management was seemingly in an increasingly

defensive position to quell employee complaints concerning an apparent lack of: a substantive

employment environment; advancement opportunities; and either amiable peers in the workspace
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or effective training. Whole Foods, upon an in-person inspection of the local store however,

seemed to be the embodiment of employee cooperation and a work environment of good cheer.

A manager, who shall remain nameless, related that service was the only thing that Whole Foods

could offer and that employees who were less than forthcoming, regarding good service and

good cheer, would find themselves demoted or quickly ousted.

           Personal Leadership, Management Characteristics, Styles, and Preferences

       Organization leaders, who were developing their particular roles, needed to be cognizant

of the fact that there was some merging of their personal and professional roles and that the other

individuals in the workspace had a number of expectations that the two identified roles of those

leaders were integral to the work of management of the organization (Carden & Callahan, 2007).

When an organization pursued the business philosophy of concurrently overusing the staff and

researching better business venues it was demonstrated to enjoy business success for a time, but

it was then later found that the roles of management were not flexible enough to provide the

leadership necessary to maintain that sort of enhanced performance for the duration without

eventually changing the inherent reward system to reflect higher performance ideals and the

subsequent innovation achieved (Jansen, George, Van den Bosch, & Volberda, 2008).

       When Sam Walton was in charge of the Walmart stores chain, he made it his personal

ambition in life to oversee every aspect of every store and take good care of the store's

customers, who were his livelihood. When one of my truck drivers took ill, I took that driver's

trucking delivery run to a particular Walmart store. Since the parking lot was empty, and Sam

Walton happened to be flying overhead, Sam landed in the Walmart parking lot to investigate

and found out that there was a parade on the other side of town that was passing and that all of

the cars were blocked from entering the Walmart store's parking lot. He told me that he was
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concerned and would not hold it against the store manager, before he re-entered his private plane

and took off from the Walmart store parking lot. Although the top management of Whole Foods

and Kroger Foods don't necessarily seem to have this level of personal interest in their own store

chains, the management of these stores does seem to have enough of a personal interest in the

employees and customers, using personal leadership, sound management characteristics,

effective styles, and preferences, to make those store chains successful, as demonstrated by the

stores' market performance and profits in recent years (Steverman, 2009).

                               Mechanistic Organizational Structure

       Dickson, Resick, and Hanges (2006) reported that a mechanistic organization was the

type of organization, which was described by, "specialized differentiation between jobs" (p.

353), distinct expectations for exactly what the organization provided to employees and the

reciprocation expected (Dickson, Resick, & Hanges, 2006), "behavior that is governed by clear

policies and rules" (p. 353), and an extreme concentration upon a military style of hierarchy

wherein instructions flowed down and responses trickled upward (Dickson, Resick, & Hanges,

2006). The mechanistic type of organization has been described as: the form taken when an

organization first starts out; it was a polar extreme of an organizational structure, as opposed to

the other polar extreme of organizational structure known as organic; and the business was stable

and did not pull resources, to grow, from the business environment (Zanzi, 1987).

       The particular type of job differentiation and specialization, as most businesspeople

already know, was common among the different types of technology companies that employed

technicians to repair technical equipment, construct components, or to assemble/make parts on

assembly lines (Christodoulou, Fleet, & Hanson, 2008). This type of structure was depicted by

an almost military style of conduct because the employees and company had a very concise
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understanding of expectations, which did not vary, concerning the sort of conduct and behavior

expected from employees and management, and the sort of expectations by both parties

concerning how the organizational structure of the company would react to most common

situations. In fact, there were very strict guidelines for many typical situations and no one was

expected to vary from procedure or protocol. Communication in the company was typically

performed in two directions and was characterized by the direction as to content: downward was

the direction for management instructions and orders; and upward was the direction for

employee feedback as to how effectively those instructions had been accomplished. Although

this sort of organizational structure was how many companies took their business start, it was

found to still be the main thought structure of upper level management in many firms, for various

decision making processes, but the typical process of firm organization had already begun to

migrate away from this organizational style (Strikwerda, Stoelhorst, & Strikwerda, 2009).

                                 Organic Organizational Structure

       Dickson, Resick, and Hanges (2006) reported that an organic organization was the type

of organization, which was at the opposite polar extreme from a mechanistic organizational

structure, and was characterized by: "overlapping responsibilities, less specialization, and greater

generalization among positions" (p. 353); no specific outline or specificity of work requirements

for a given employee's position (Dickson, Resick, & Hanges, 2006); "behavior that is governed

by a shared set of values and goals rather than instructions and rules" (p. 353); and the type of

corporate structure wherein the downward communications, from upper level managers, were

just a sort of counsel. The authority for decisions was nearer the lower levels of the corporate

structure and the upward messages were merely some sort of report indicating what results had

actually occurred and which decisions had already been decided at those lower levels (Dickson,
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Resick, & Hanges, 2006).

       The general type of job descriptions in an organic organizational structure were

characterized by responsibilities intertwined with other jobs in the structure. These types of

positions in the organizational structure were typified by far less specialization in job

performance and the levels of responsibility. Each employee was found to have the type of

authority to perform whatever necessary tasks needed doing and the employees were not

restricted to a specific type of work necessity outline or even the need to be held accountable for

any particular type of outcome. Instead of strict procedures and protocols, the employees in the

organic structure were governed by a sort of shared responsibility and the ultimate results and

work needs were shared by the employees. The ultimate decisions for work results and

responsibility were found to be made at far lower levels and the employees merely

communicated those results to top management (Dickson, Resick, & Hanges, 2006). The

organic organizational structure was found to be more typical of organizations that had evolved

over time, were more established, and the type of organization that was characterized as having

found a market niche in the business community (Strikwerda, Stoelhorst, & Strikwerda, 2009).

                 Comparison and Contrast of Organic and Mechanistic Structures

       The mechanistic structure was a strict sort of specificity, with regard to employee

responsibility and function in the workspace, whereas the organic seemed to have more of a flow

wherein the employees could flow with the work, job responsibilities, and the eventual results

achieved. There was a profound difference in the communications that took place in the

organizations. The mechanistic structure was typically a top-down style of directives transfer,

from upper management, with some upward flowing feedback, whereas the organic structure

seemed to be a more natural sort of downward flow of advice and counsel from upper
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management and the employees were self-directing and empowered to perform the work that

needed doing; the employees achieved the results needed, according to the employees' autonomy

and the job's requirements.

       The authority for the decisions regarding the particular job's conduct and functional

responsibility came from upper level management in the mechanistic organization, whereas the

employees and remedial supervisors at the functional level were allowed to make specificity and

job decisions in order to perform the work in an organic structure. Instead of the mechanistic

style of upward feedback, the front-line employees and remedial supervisors reported upward the

results of the work. Many of the examples of mechanistic organizations were found to be newer

companies, which had not had the opportunity to grow and mature, so these companies were

typified by the mechanistic organizational structure. Further, there were older companies, which

had not had much success of late, and these companies were still using the mechanistic style in

the hope that former successes would somehow repeat themselves (Zanzi, 1987). The

organization, which had evolved and had realized some improved profit capabilities, had

embraced the organic structure, or a combination of the mechanistic and organic, in order to

grow and prosper in the changing marketplace (Dickson, Resick, & Hanges, 2006; Freund &

Drach-Zahavy, 2007).

                         Organizational Examples Closer to Each Model

       Zenger (2009) noted that there had to be some sort of reason for employees to perform

and produce, that there were 16 different types of leadership factors that would inspire those

employees, and that these qualities were possessed by the very best leaders in some fields, and

that it was certain that, "For at least two-thirds of leaders, it was far more valuable to work on

strengths than weaknesses. To which the question was often, 'Which strengths?' " (pp.18-19).
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Zenger realized, from an examination of the preponderance of research, that trust was the most

important factor involved with such leadership, and that researchers could "reduce it to a

formula: Trust = (C + R +I)/S-I. The components of the formula are as follows: C = credibility,

R = reliability, I = intimacy, S-I = self interest" (p. 21). This trust cancelled uncertainty in the

organization. When the two models are examined below, per the requirement for which

organization types are closer to which structure, trust will again be addressed.

       Alston and Tippett (2009) noted that trust played a significant factor in the type of

organizational structure in use, whether it was to be mechanistic or organic, and that as

technology-based organizations moved from mechanistic toward organic, the trust that the

workers had in the overall organization, read trust in their leaders and leadership, tended to

increase and those technology-based organizations became more productive, successful, and the

organizations became "high performing organizations" (p. 3). Freund and Drach-Zahavy (2007)

realized that health organizations were a sort of dichotomy in the business world; health clinics

in local communities had conflict between different types of health professionals, but it was

noted that much of the conflict ceased and that the community clinics became more productive

and successful when a "combination of mechanistic structuring and organic structuring led to

effective teamwork" (p. 319).

       Kang and Snell (2009) realized that mechanistic and organic organizational structure

should co-exist but that they were very different in the types of resources brought to the

management side of the organization; in larger organic organizations, typified by higher

development in the marketplace, "Disciplined extrapolation is an architecture comprised of

generalist human capital, supplemented by entrepreneurial social capital, and complemented by

mechanistic organizational capital" (p. 65). Kang and Snell also noted that a combination of the
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two types of organizational structure, in an evolved organization, was typified when "these two

architectures suggest how human capital and social capital can reinforce one another to facilitate

learning in one direction (exploration or exploitation), while organizational capital serves as a

countervailing force to ensure learning in the other direction" (p. 87). Salmador, Bueno, and

Maranhao (2008) realized that airlines, and other organizations typified by Total Quality

Management, "seem to be too mechanistic for such a complex environment...an organic

approach may be more effective and produce actual and lasting changes in this kind of

organisation" (p. 513). An over-arching observation could be that the technology or specificity

of evolved organizations would seem to support an organic organizational structure, whereas the

starting company could find a more mechanistic approach to be conducive to beginning success

in the marketplace.

                           Measurement of Organizational Uncertainty

       Organizations measured uncertainty, as described above, regarding the trust and

structural issues secondary to the mechanistic versus the organic structural issues, by what

occurred secondary to the type of organizational structure in use in that organization. The

uncertainty in the organization, regardless of the type of structure in use, then profoundly

affected the results achieved by the organization and could even be the determining factor

concerning whether or not the organization remained patent or became defunct (Harris & Ruefli,

2000). Harris and Ruefli (2000) realized that, with regard to the aspect of finances as they

related to structure or game plan goal changes in the organization, that changing everything did

not work in organizations examined, but changing either the structure or strategy did work and

"that singular structure changes were associated with the highest performance. This finding was

consistent with the theory: though strategy is important, proper deployment of firm uniqueness is
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paramount to performance enhancement" (p. 587). If a firm can determine the organizational

structure, despite uncertainty, then the organic or mechanistic structure utilized by the firm, if it

takes advantage of the firm's uniqueness, could contribute toward financial success in the

marketplace.

                    Approach for Determining Proper Organizational Structure

       Cascio (2005) realized that the re-structuring of an organization could have a great deal to

do with the organization's eventual success, what's more the interim goals for its position in the

marketplace; although downsizing was one technique, the author noted that the retraining of the

organization's people assets to grow the organization was a strong means of growing an organic

structure with, "people are the source of innovation and renewal, especially in knowledge-based

organizations, and that the development of new markets, customers, and revenue streams

depends on the wise use of a firm's human assets" (p. 39). This was a sentiment which was

echoed elsewhere in the literature in an economy that was characterized by lay-offs and the

economic downturns; the optimal solution was found to be a combination of the best parts of the

organic and mechanistic organizational structures in order to strengthen a firm's human resources

so that the firm would prosper in an uncertain economy (Sy & Cote, 2004; Kimbrough &

Componation, 2009).

                                              Conclusion

       The literature reported that a mechanistic organization was the type of organization

described by specialized differentiation between jobs, distinct expectations for exactly what the

organization provided to employees and the reciprocation expected, and behavior that was

governed by clear policies and rules. It was an extreme concentration upon a military style of

hierarchy wherein instructions flowed down and responses trickled upward. The mechanistic
                                                                                                 14


type of organization has been described as: the form taken when an organization first starts out; it

was a polar extreme of an organizational structure, as opposed to the other polar extreme of

organizational structure known as organic. In the organic structure, the business was stable and

did not pull resources, to grow, from the business environment. The mechanistic type of

structure was depicted by an almost military style of conduct because the employees and

company had a very concise understanding of expectations, which did not vary, concerning the

sort of conduct and behavior expected from employees and management, and the sort of

expectations by both parties concerning how the organizational structure of the company would

react to most common situations. Instead of strict procedures and protocols, the employees in

the organic structure were governed by a sort of shared responsibility and the ultimate results and

work needs were shared by the employees. Many of the examples of mechanistic organizations

were found to be newer companies, which had not had the opportunity to grow and mature, so

these companies were typified by the mechanistic organizational structure.
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BIOGRAPHY


Nicholas Jewczyn (pronounced JEFF' - sin) was graduated from Southern Illinois University and

took his M.B.A. (Finance) at N.Y.I.T. At N.Y.I.T., he was inducted into Omicron Delta Epsilon

for outstanding achievement in the Field of Economics (2007). As a college professor, teaching

Accounting, Business, Finance, and Economics, Mr. Jewczyn was inducted into Phi Delta Kappa

for excellence in teaching at the collegiate level (2009). Mr. Jewczyn is presently pursuing a

Ph.D. in Business Administration at Northcentral University with a specialization in Financial

Management and was inducted into the Sigma Iota Epsilon honors management fraternity (Zeta

Rho Chapter - 2009).
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