Case: Whole Foods Market is, in many aspects, an unusual corporation. As the bas
ID: 449274 • Letter: C
Question
Case: Whole Foods Market is, in many aspects, an unusual corporation. As the base case illustrates, John Markey and his partners are not typical corporate leaders. Other noteworthy aspects include the Whole Foods’ highly decentralized organizational structure, their teamoriented decision making and leadership style, and their unique human resources processes. Whole Foods Market is known for its attractive workplace environment; it is one of only three food retailers that have frequently appeared on Fortune’s 100 Best Companies to Work For. The other two foods retailers on the list are Wegman’s Food Market and Publix Super Markets. Although Whole Foods Market has recently had to lay off 1500 employees, Walter Robb, a co-CEO, lamented “this is a very difficult position, and we are committed to treating affected team members in a caring and respectful manner.” Whole Foods Market is also known for its programs in sustainability and corporate social responsibility. It is ranked 3rd on the Environmental Protection Agency’s Top 25 Green Power Partners list. The company’s core values include “the advancement of environmental stewardship.” Co-CEO Walter Robb defended the company’s high prices for salmon by stating that “Sure we could sell cheaper farmed salmon, but it is terrible for the environment.” Whole Foods Market is also a major player in philanthropy with 3 active foundations: Whole Planet Foundation, Whole Kids Foundation, and Whole Cities Foundation. In addition, the company donates 5% of its earnings to charities.
Question 1: In light of Whole Foods’ distinctive management philosophy, structure and values (e.g. social responsibility), explain why it makes strategic sense for the company to introduce the 365 store chain, using a SWOT- style analysis (matrix) as the starting point for your discussion.
Question 2. Discuss: a) the advisability and potential impact of the employee layoffs on Whole Foods’ financial and physical operations and b) the challenges and/or benefits the reduction in force presents for the company as it prepares to staff and market the new line of stores.
Question 3. Which of the leadership styles covered in class do you think will be needed for the successful launch of the 365 store chain, and why? (You may argue for more than one.) Does current top leadership at Whole Foods exhibit that style or styles? Explain.
Explanation / Answer
Strengths
Weakness
Opportunities
Threats
Consumers prefer fresh products. Introducing new 365 store chains will make the fresh foods available near them. This will help the company to increase profits by achieving economies of scale as the number of consumers will increase. This is because the company is already established in the market. It will take only little efforts to attract the market share towards it.
2.
Potential impact of layoff of employees on financial and physical operations:
Layoff will save cost to the company but on the other hand it will have impacts on the operations of the company. it is because the work will remain the same but the workers will now have to do more work. As a result, the chances of errors will increase. So, it is suggested that the company should not layoff. Also, not laying off the employees will help the company to relocate the experienced employees to its new chain stores. This will not hamper the productivity and efficiency as the existing employees know the work and the training time of new employees will also be saved and so will be the training cost.
Challenges and benefits presented by the reduction in workforce:
Challenges:
Workload on leftover employees will rise.
Negative impact on customers as to why layoff has been done.
Chances of committing error will increase.
Benefits:
Cost saving.
Company can redesign the job specification.
New employees will be cheaper than the current ones.
3.
While opening new chain stores there may be several issues that may be observed in various locations. To remove those issues, the top management must seek feedback from the staff of the new chain stores.
Thus, the best leadership style in this case will be participative leadership style. A participative leadership style tends to seek feedback from the team. In such a style though inputs are desired from the team, the final decision rests with the top management.
The case shows that the organization is committed to treat every member in a caring and respectful manner.
In a transactional leadership style managers review and train the employees to meet the organizational goals. This is nothing but taking care of the employees.
Thus, one can say that the current leadership style is transactional leadership style.
Strengths
- Strong network of suppliers and vendors.
- A good reputation in the market.
- Continuous improvements in revenue and services.
- Very large scale customized stores.
- Attractive offers and discounts rates attracts more customers.
- High quality products.
Weakness
- Packaging outbreaks.
- Premium rates are very higher.
- Structural problems because higher decentralization techniques.
- Government does not provide subsidies for organic foods.
Opportunities
- Demand for high quality products.
- Increased income levels in population.
- Promoting various food tours and awareness campaigns.
- Giveback cards to regular customers.
- International market openings.
Threats
- Recession and weak preferences.
- Direct competition for markets.
- Changes in government regulations and taxation.
- Climatic variations