Organizational Behavior in Best Buy - Case Study Example

Running Head: Organizational Behavior at Best Buy Inc. Background Best Buy is the leading electronics retailer in the United States with more than 941 stores. It is a global family of global brands with more than 40 years of history. Their primary product lines include televisions and related products; personal computers and related products; entertainment software, including movies, video games and pre-recorded music; and appliances. They have large stores (Best Buy stores) targeted at a broad customer base and smaller stores (Magnolia Audio Video stores) targeted at high-end customer (BBYCommunications). In addition, they operate the Geek Sqaud which is a customer service business where they assist their customers both bin the Best Buy stores and in customers’ homes. Future Shop and Best Buy are two brands of large, broad-based customer electronics stores they operate in Canada. They also serve their customers through four websites - BestBuy.com, FutureShop.ca, Magnoliaav.com and GeekSquad.com. Their corporate vision is to make life fun and easy. The company is strongly associated with technology as they think technology should serve people. Since its inception in 1966 the company has grown steadily through innovation. They have overcome numerous challenges on the way and grown stronger. With a customer centric approach the employees have been trained to respond to their unique needs and aspirations. Change management Changes in organizational behavior have become essential to sustain the market forces and competition. Employees at Best Buy are stressed out and find it difficult to maintain work-life balance. Organizations are constantly being challenged to develop new dynamic, adaptable structures. This is what Best Buy (BB) was experiencing till they decided to bring about a drastic change in their corporate culture. Attrition rate had increased at Best Buy when the company decided to introduce the ROWE (results-only work environment) program (ICMR, 2007). The vision of the program was that productivity should be measured by output and not by the number of hours spent at work. Turnover has reduced following the implementation of the program (Business Week, 2006). Change management is difficult and BB too faced problems. Implementing ROWE required a complete overhaul of people’s attitude towards work. There was a lot of confusion in the beginning. To manage change motivation is the key to empower the staff and get the front line managers to take collectively responsibility (Landale, 2004). When BB implemented this, they gradually found that employee engagement, a measure of employee satisfaction, was higher in ROWE teams. Performance became easier to track. As workers performance declined the managers started giving it due importance. According to McGregor (1960) jobs should be delegated and people should be given a degree of freedom to assume responsibility in helping to achieve organizational goals (cited by Amaratunga & Baldry, 2002). Best Buy did exactly this and it helped to improve the commitment of the employees. Best Buy insisted on achieving the goals under their ROWE program because in words of Seijts (2001) specific goals define what constitutes an acceptable level of performance. It empowered the employees which in turn served to motivate them. Group Dynamics and team work Work teams enhance effectiveness in an organization. There is always a tendency to resist change but since an individual is a part of the social group, the outcome and the productivity of an individual depend upon the dynamics of the group. Teams can bring together skills and experience that far exceeds that of an individual (Castka, Bamber, Sharp & Belohoubek, 2001). Team communications support real-time problem-solving and initiative and thereby enhance productivity, creativity and employee satisfaction. Small ROWE teams at BB set the stage for facing the challenge. Teams are often resistant to change and they form set patterns how to relate with each other. When a group as a whole decides to have its members change their behavior, the results are better. Instead of negotiating with the employees, the management used two employees to experiment their program and very soon through social networking it spread and gained popularity. Here group dynamics played a significant role (Business Week, 2006). External pressure does not work but internal group dynamics has more positive effect (Coghlan, 1994). If a group is attractive to its members it has more profound effect on the members. Organizations usually adopt the team approach to manage change. Along with the success of the program the opposition to it also intensified at BB. The critics expected the executives to lose control and the teams formed for the implementation of ROWE would break up. There was resistance to change because it was felt that work relationships are better face-to-face, not screen-to-screen (Business Week, 2006). The group of people that were enthusiastic about the ROWE formed underground networks and lobbied support. Their bosses too had to give in ultimately. The company has now evolved and is the ‘go-to’ example of employee empowerment and value creation where employees self-organize to solve problems and create innovation (Azar, 2008). Motivation Motivation means effort or in the words of Ryan and Deci (2000), “motivation produces”. Getting people to work requires a great deal of tact and motivation is one such tact. Motivation, according to Herzberg, cause positive job attitudes because they satisfy the workers need for self-actualization (Tietjen & Myers, 1998), which according to Maslow is an individual’s ultimate goal. These motivators include recognition, achievement, growth prospects, responsibility and the work itself. At Best Buy the employees were not clear about the roles and responsibilities, there was no role clarity, and this resulted in no satisfaction of job as the motivators according to Herzberg (cited by Tietjen & Myers, 1998) are not present. These factors can have a lasting impression on worker’s attitude, satisfaction and thus work. Best Buy uses recognition daily through a variety of programs so that people receive positive reinforcement of their contributions (Successories, 2009). They recognize team members and in 2008 they gave out Essence of Teamwork desktop framed print to each team member. When people see this on their desktop again and again it serves to motivate them. The Essence of Teamwork speaks of the combined team effort and it is perfect for a cross-functional team. It speaks about the differences that exist between the team members and the common goal shared by them. For each new project they have a new image. Flexibility and empowerment Today firms believe in a ‘flat, fast and flexible’ organization (Caldwell, 2004). Flexibility is not a norm that organizations follow. It means differently to different people and at Best Buy the management empowered the employees to decide their own work schedules since it is a state of mind (Caldwell). The output of a worker in the post Fordism era is measured by competency, loyalty and an aptitude to engage in a process of permanent innovation (Fuchs, 2002) as increasing pressure on employees for enhanced performance can alienate employees from commitment (Foley, Maxwell & McGillivray, 1999). Flexibility pertains to flexibility in working time schedules, numerical flexibility, functional and wage flexibility. Employers have responded by applying different forms of working-time flexibility to enable employees to manage multiple roles (Bontis & Fitz-enz, 2002). Functional flexibility results in innovation in management and could lead to efficiencies in teamworking, multiskilling and upskilling (Crompton, 2002). The ROWE program at BB was aimed to provide the employees with this flexibility in their work schedules. It served to enhance team work as well. Power Change is usually top driven but at BB it is from the inside out (Kiger, 2009). Each department is allowed to give up the rules and redesign things as they want. The ROWE program was not imposed from top down. It started as a covert guerilla action that spread like a virus and eventually became a revolution (Business Week, 2006). The executives at BB knew that top down imposition would not work and hence waited for the right opportunity. The CEO learnt about the details only two years after it had started transforming his company. Bottom-up innovation was encouraged at BB but when the results of the program were evident the employees were reluctant to share the success with the higher authorities. They feared that the perks would be taken away or reversed (Business Week, 2006). Conflicts Conflicts in the organization started in 2001 when in a survey the employees revealed that they did not think that their supervisors trusted them to do their work (Kiger, 2009). They expressed that they could not lead a happy and productive life. This gave birth to the idea of ROWE that was born and nurtured by employees and it did face resistance in the beginning by other employees. It was felt that working offsite would further diminish the work-life balance and people would be working longer hours (Business Week, 2006). Some even thought it was a PR stunt. People reacted saying that it was not possible to work more efficiently in an era of transcontinental teams and multiple time zones. The culture at BB was threatening the massive expansion plans. Still others felt it would create a stigma that drives a wedge between employees (Kiger, 2009). Resistance to change according to Hoang (2007) occurs due to lack of communication. People do not like to disturb the equilibrium when they are used to a set pattern of working. Fear of the unknown has been found to be the most evocative (Worrall, Campbell & Cooper, 1999). BB too lacked in effective communication and people were unsure of the shape of things to come. Driving the change in bits and pieces created disharmony in the groups and departments. The managers could identify the disruptive influences and hence decided to give flexibility to the department as a whole. This helped them to get rid of the old structure altogether. They faced problems initially because they did not create a sense of urgency and hence gave rise to fears and speculations. According to Heffes (2009), to quickly and effectively change workplace behaviors, ‘You need urgency NOW!’ This message of urgency should reach a good number of people who can set the stage for a challenging leap. Communication and decision-making Communication as the essence of change has been recognized by most researchers (Dulye, 2008). Effective communication can empower front-line employees to carry internal messages through every level of an organization. At BB social networking helped to filter the message through every level. For a communication to be effective it must be received and understood and only then it can produce resultant action (Kalla, 2005). Effective communication leads to good personal relationships and trust within the team; it creates a positive environment within and around the team and only then can the team achieve its goals. Members of a team should have a shared understanding, stimulate others to take action and encourage people to think in new ways. The employees at BestBuy engage in telecommuting and they extensively use web2.0 tools like Wiki’s and social networking for effective communication. Companies use blogs for various purposes - employee blog, group blog, executive blog, promotional blog and the newsletter blog (Xifra & Huertas, 2008). BB too has its own platform called the BestBuy Connect where they can ‘engage with the actual people, real behavior and unedited perspectives of those who power Best Buy’ (Connect, 2009). They blog and exchange ideas from a meeting at work, and they share their perspectives on different issues. They have their own space at myspace.com (Figure 1). Several elements of BB’s customer-centric strategy are decision-centric. BB does not focus on customer acquisition but on growing existing customers. Decision-centric companies focus on customer development and retention as existing customers generate lot of behavioral data which can be used to develop analytics and hence improve decision-making (Taylor, 2008). BB uses analytics for segmentation which is not just a decision support tool. It also develops models to find products relevant to customers, to personalize the offers made through the loyalty program with targeted messaging. Conclusion Thus organizational behavior has to undergo change with the change in the volatile business environment. Conflicts and resistance are inevitable in business and the managers must know how to handle the situation. Motivation of employees is the most important factor which can be achieved through empowerment. Empowerment can come through functional flexibility. Along with flexibility effective communication as a tool for managing change is important. At Best Buy conflicts and stress had become prominent which is when the managers introduced the ROWE program. This created resistance because of lack of communication and lack of a sense of urgency. Top down management was not implemented at Best Buy but the change was effected from the middle level. Neither power nor politics played a role but they used group dynamics and team work to bring about change. They used technology extensively like web 2.0 tools for social networking for communication. They gradually overcame the resistance and today Best Buy is a model for change management. References Amaratunga, D., & Baldry, D. (2002). Performance management in facilities management and its relationship with management theory and motivation. Facilities, 20 (10), 327-336 Azar, M. (2008). Best Buy: Big Retail Opens UpThe. Retrieved March 2, 2009 from http://www.apiconference.com/pdf/Nov_08_BestBuy.pdf BBYCommunication. Retrieved March 2, 2009 from http://www.bbycommunications.com/newscenter/go/faqs.htm Bontis, N., & Fitz-enz, J. (2002). Intellectual Capital ROI: a causal map of human capital antecedents and consequents. Journal of Intellectual Capital. 3 (3), 223-247. Business Week. (2006). Smashing The Clock. Retrieved March 2, 2009 from http://www.businessweek.com/magazine/content/06_50/b4013001.htm Caldwell, R. (2004). Rhetoric, facts and self-fulfilling prophecies: exploring practitioners’ perceptions of progress in implementing HRM. Industrial Relations Journal, 35 (3). Castka, P., Bamber, C. J., Sharp, J., & Belohoubek, P. (2001). Factors affecting successful implementation of high performance teams. Team Performance Management, 7 (7/8), 123-134 Coghlan, D., (1994). Managing Organizational Change through Teams and Groups. Leadership & Organization Development Journal, 15 (2), 18-23 Connect. (2009). Best Buy Connect. Retrieved March 2, 2009 from http://www.bestbuyinc.com/connect Crompton, R. (2002). Employment, flexible working and the family. British Journal of Sociology. 53 (4). 537–558. Dulye, L. (2008). Using communication to drive change at Rolls-Royce. Strategic Communication Management, 13(1), 32-35. Foley, M., Maxwell, G., & McGillivray, D. (1999). The UK context of workplace empowerment. Participation & Empowerment: An International Journal, 7 (6), pp. 163-177 Fuchs, M. (2002). Changing employment relations, new organizational models and the capacity to use idiosyncratic knowledge. Journal of European Industrial Training, 26 (2/3/4), 154-164 Heffes, M. E. (2009). You Need Urgency NOW! Financial Executive, 25 (1), 20-23. Hoang, P. (2007). Change management and force field analysis: change takes place constantly in business. Paul Hoang considers the barriers to change and looks at how managers can bring about change effectively. Business Strategy, Business Review, 13 (4). ICMR. (2007). Best Buys Results Only Work Environment: Changing the Productivity Paradigm? Retrieved March 2, 2009 from http://www.icmrindia.org/casestudies/catalogue/Human%20Resource%20and%20Organization%20Behavior/HROB092.htm Kalla, H. K. (2005). Integrated internal communications: a multidisciplinary perspective. Corporate Communications: An International Journal, 10 (4), 302-314 Kiger, P. J. (2009). Throwing Out the Rules of Work. Retrieved March 2, 2009 from http://www.workforce.com/section/09/feature/24/54/28/ Landale, A. (2004). Motivation muscle frees up the front line at BVSC. Human Resource Management, 12 (2), 27-29 Ryan, R. M. & Deci. E. L. (2000). Self-Determination Theory and the Facilitation of Intrinsic Motivation, Social Development, and Well-Being. American Psychological Association, 55 (1), 68-78 Seijts, G. H. (2001). Setting goals: When performance doesnt matter. Ivey Business Journal, Jan/Feb 2001; 65, 3; ABI/INFORM Global pg. 40 Successories, 2009. Award Reinforces Teamwork Culture at Best Buy. Retrieved March 10, 2009 from http://www.successories.com/category/other+services/motivation+matters/success+stories/award+reinforces+teamwork+culture+at+best+buy.do Taylor, J. (2008). On Best Buy’s success and being decision-centric. Retrieved March 2, 2009 from http://jtonedm.com/2008/11/19/on-best-buys-success-and-being-decision-centric/ Tietjen, M. A., & Myers, R. M. (1998). Motivation and job satisfaction, Management Decision, 36 (4), 226–231 Worrall, L., Campbell, F., & Cooper, C. (1999). Surviving redundancy: the perceptions of UK managers. Journal of Managerial Psychology, 15 (5), 460-476. Xifra, J., & Huertas, A. (2008). Blogging PR: An exploratory analysis of public relations weblogs. Public Relations Review, 34, 269–275 Figure Caption Figure 1. JPEG format of the people at Best Buy employees at myspace.com Read More