Organizational Behavior in Staples Inc - Case Study Example

Lecturer: Topic: Background Staples Inc is an office supply chain store that operates globally and has more than 2,000 establishments worldwide that exist in twenty six countries (Barajas, 60). The head offices of this large business are situated in Framingham, Massachusetts in the United States and the company has retail establishments that operate under its original name in Brazil, United Kingdom, Portugal, Finland, China, France, Australia, Germany and the United States. Officenet-Staples based in Argentina is one of its subsidiaries among others that operate in various other countries. In its day to day operations, Staples is in the business of selling supplies, machines that are meant for the office, furniture, products for promotions, business and technology services. These products and services can be accessible from their stores or through the internet by accessing their website. The initial store that the company operated was established in 1986 and its location was in Brighton, Massachusetts. Problem statement Staples had been set to merge with Office depot but the Federal Trade Commission thought that this would create an unfair position in that the merger would enable the two companies to be able to increase prices of office supplies unfairly despite the competition that was posed by Officemax since the latter did not have stores in most of the areas that the merger would have affected. The argument that Staples brought out was that the chains such as Wal-Mart were a representation of significant competition but this argument did not help to resolve the decision. After this denial by the FTC the two companies that were supposed to merge developed a rivalry and competition between them has stiffened. Competition in the company can therefore be seen as an issue that cannot be overlooked. This enormous level of competition was the reason behind the company’s decision to consider a merger. However, the manager was of a different opinion in that he sees the mergers as having no direct importance in how the company is supposed to survive and the operations that it is to carry out in the days to come. The attributes that were defined by the competition made the business sound an alarm in terms of the profitability and the overall performance. Aspects of organizational behavior therefore have to be considered and the manner in which they influence the overall performance of the organization also considered. This is necessary to make sure that they are working towards the success of the company. The organizational behavior is considered using a number of theories that are meant to understand it better. Issues and symptoms After Ronald Sargent took over the company in 2002 the company posted a decrease in the rate of expansion in terms of the stores that it had been operating. Through learning through several focus groups, he was able to open stores that were smaller and this necessitated the removal of the products that were not essential in the main stores such as computer games. The company was also able to employ a subsidiary that was tasked with working on online sales conversion rate that was known as Quill.com. Analysis Staples as the number one office supply store operator in the United States and as a worldwide leader in the office sector sells products, computers, furniture and a variety of other supplies in several countries through more than 2,000 stores. In addition to the retail outlets that it operates, it also sells office products through the internet and through the catalogue that it has as well as direct sales operations that include the subsidiary Quill Corp. it also provides document management and copying services at the stores that it operates and after it expanded to Europe, the company is growing into Asia and South America. However, the company is facing stiff competition from the merger that took place between Office Depot and OfficeMax keeping in mind that there was supposed to be a merger that involved Staples. PEST analysis Political The involvement by the FTC The supply of government departments that are across Asia The competition that comes from Office Depot and Office Max Economic The recession Lending by the banks has reduced Less businesses have been able to get money from the bank Consumers therefore become less loyal to the brand An increase in the VAT Quantitative Easing Social The customers want more expertise The customers think that it is not fashionable As a result of the internet craze of the customers, it makes it cheaper to operate Technological New methods of purchasing such as click and collect and the e-Channel Concept The use of social networks Operates 10 different brands of Catalogues and websites in 15 different countries SWOT analysis Strengths It has diversified the business that it conducts It is a market leader in its global businesses that it conducts worldwide The staples brand is a well known brand in the world since it has created a name for itself Cost advantage at Staples leads to increasing profits for the company The technology that is available at Staples in sufficient and efficient in making its operations successful The economies of scale greatly reduce the costs that Staple has to incur It has the advantage of being a large organization It has very strong leadership Weaknesses The company experiences a high staff turnover The weak supply chains that are associated with it weaken the potential that Staples for some of its products It has lower margins in terms of stock that is branded It has not been able to come up with products that are innovative Opportunities The expansion of staples express The expansion of new their own branded products The company has the opportunity to develop further as a result of the online market International expansion will enable the company to be able to increase the profits that it realizes The paper product that it deals with can be considered to be of a high margin The market environment that it has and the relationship that it has with Office Max makes it work harder It has the money to develop better services and products for its customers Threats The website that is operated by its competitor is more user friendly than that which is operated by Staples Intense competition in the field that the company operates in could hurt the potential of growth that the company has Direct competitors such as Office Max mean that the company will have to work harder so that it can be able to post profits The merger of Office Depot and Officemax Competitors/Market analysis With an estimated USD24 billion in annual sales, Staples is the leader in the office supplies sector and also enjoys a noteworthy scale advantage over most of the companies that are in the same business. The company reaps from a huge network of profitable middle-market business customers that have conventionally been fairly sticky, in spite of the attempts that OfficeMax and Office Depot have made to try to capture this share. Compared to the competitors that Staples has, the company has reported a dip in the total revenue that it gets despite the revenue increase that is recorded by most of the companies that are considered to be its competitors. Since the is a relatively low switching cost and also a very minimal product differentiation, competition has picked up quickly in the office products sector which could consequently lead to price wars that would put more pressure on the margins. Amazon supply has also intruded into the delivery business that has been very profitable for Staples and this might disrupt the returns that are normally realized in the sections of the business to business market that post most of the profits. Organizational behavior analysis Leadership is also an important aspect of organizational behavior (Griffin and Moorehead 347). Staples showed the issues of leadership in its activities and this is important in ensuring proper coordination of activities in the organization. The leaders in Staples influenced greatly the performance of various activities and tasks of the organization. Leaders in this company played a vital part in regulating a variety of strategies associated with the performance of the company. The aspects of leadership in Staples also played an important role in ensuring the smooth flow of operations in the organization and the authority of Staples shows concern and influence on the operations of the company. Motivation theory is an important aspect of organizational behavior (Sims 64). This aspect helps the employees of Staples to work effectively in facilitating the achievement of the goals and objectives of the company both in the short term and long term. This theory is an important component of organizational behavior because it of the essence in influencing the employees to perform various activities and tasks of the organization. This is meant to coerce the staffs to take part in the facilitation of the duties and objectives that are associated with the company. Motivation of the employees is important in boosting the morale of the employees of Staples in working for the company. Staples cover the global markets leading to a decrease in the levels of competition in the markets and the other companies in the business are affected by the marketing strategies of Staples. The features of global markets increased its capital base making it easier to overcome the competition threats in the business. The financial capability of Staples is an important opportunity and strength in penetrating into the international markets, thereby, reducing the high levels of competition in the business. This approach was vital in dealing with rivalry that had come up in the business. The approach to merging shows that Staples was facing competition pressure in the business. The lack of protective strategies in the market made it difficult for Staples to market freely its products or penetrate the international markets. This approach is of the essence I eliminating the aspects relating to high competition in the business. The cheap prices for the products also indicated how the company tried to combat the problem of high competition in the business. The inadequate proactive marketing strategies are responsible for the competitive pressure facing Staples in the provision of home-based office products. This made the company fail in providing the relevant products appropriately to its customers. The false marketing strategies also played a great part in a high competition, in relation to the operation of Staples in the business. This company should, therefore, put appropriate strategies in place in order to deal with the competitive forces. The company is in a position to put in place the most appropriate procedures in taking care of such pressure in the operation of Staples. The organizational performance in relation to combating competition is reflected in the approach to strategy of merging. The legal and regulatory aspects of Staples also influence greatly its operations in the market. The regulations and policies of this company played an important role in its performance both in the domestic and international markets. The policies of Staples are very important in influencing its relationship with the customers in the market. The relationship between Staples and the competitors was also influenced greatly by the nature and scope of such legal procedures and restrictions in the market. The legal aspects in relation to the cultural norms also affected the operations of Staples in the market and the quality of services provided to its customers both domestically and internationally. The features of rewards reflect the organizational behavior theory in the business where the company rewarded its employees in order to encourage higher levels of productivity. This component of the organization relating to rewards played an important role in ensuring that this company performs effectively in the market. Rewards also helped this company to maintain a good labor management practices due to the loyalty and retention of customers by the company. The rewards played an important role in motivating the employees in the performance of their roles in the company and also increased the levels of production in Staples. The leadership at staples Path-Goal theory can be divided into four segments that include leadership behaviors, employee characteristics, environmental factors and leadership effectiveness. A leader is supposed to be in a position to choose the style that best works depending on a given set of environmental factors and the employee characteristics and therefore the effectiveness of leadership can is measured by the ability that the leader has to develop a path, a set of goals and to succeed in the accomplishment of goals. The Path-Goal theory states that people are more likely to be satisfied with the jobs that they do if they have the perception that it will lead to something that will be of a good reward and they will be persuaded to work harder if they have the belief that their efforts will lead to things that will be of a higher reward. Leadership effectiveness encompasses employee motivation, employee satisfaction, and leadership acceptance as well as work unit performance whereby leaders are supposed to get rid of the hurdles that weaken the capabilities of the employees towards achieving their goals. A good leader is supposed to learn behavior and be able to adapt to situations while making changes accordingly. This means that they can be no leadership strategy that will be able to fit all the situations. The leadership that was displayed by Jeanne Lewis when she worked at Staples exhibited various characteristics. In the beginning she had employed the directive style of leadership that had the characteristics of a path-goal model and as she gained more responsibilities, she gradually changed the style to work with facilitation and supportive behaviors. When Lewis became the vice president and divisional merchandising manager, she continued to adapt a style of leadership that had a directive nature. However she started to change her leadership behavior to more supportive and result oriented style. In this way, teamwork was encouraged at Staples so that the members could be influenced by the leadership of Lewis. The directive leadership style that had been applied at Staples by Lewis before she moved to retail marketing and small business could not work in the new department and she was forced to develop a more collaborative and group-oriented leadership style that was meant to improve inter-departmental communications. So that she could learn from the department experts, she had to encourage representation and networking between departments and this made her establish an open door policy while encouraging dialogue with her employees. The department had a characteristic of dialogue that was encouraged through the group oriented leadership style that Lewis adapted where meetings were held every two months with the aim of bringing everyone together. The visions that she had were discussed one on one with the staff while the different advertising agencies were encouraged to divide the work that was to be done amongst each other and make sure that the customers that they serve are brought into the discussion. Breaking down the barriers and the hurdles within these departments was considered to be the method that would be used to create an organization that would be more dynamic. The route to achieving this goal can be considered to be through the small businesses and the retail marketing section and the operations department. In conclusion, the organizational behavior played an important role in the provision of quality services to the customers while facilitating the marketing strategies in curbing the competition pressure. Organizational behavior contributed to the leadership of Staples in boosting its operations in the global markets. Alternatives The main competitors that Staples has are Office Depot and OfficeMax which came about in the early 1990’s when the superstore concept was born with all three of them emerging as players that were dominant in this field. Paper and paper clips translate to big money for Office Depot Inc which is the second largest office supply chain after Staples and sells its products through more than 2000 retail stores that are scattered in over sixty countries after it merged with OfficeMax. It deals with individual consumers as well as small and medium sized businesses and it also stocks computer hardware and software, office furniture as well as taking part in printing and copying services. United Stationers Inc is a pioneer as far as the supply of products that are used in the office are concerned with its main area of distribution and operation being in North America. It puts more than 130,000 products and national brand products to more than twenty five thousand customers and through a number of subsidiaries that it owns, it supplies products like business machines, computer products, janitorial supplies and also office products. The furniture that it stocks is mainly aimed for education and healthcare markets while mainly dealing with retailers through catalogues and also the internet. Amazon.com started as the biggest book store in the globe and has grown in leaps and bounds to reach a position that it now stocks everything through an expansion that has grown it in directions that are innumerable. Apart from the traditional books that were offered by the website, it also offers home furnishings, general merchandise, electronics; games auto parts among other products and the shoppers can easily make downloads of e-books, movies and so on to their computers or portable devices. The website also offers services like self-publishing, online advertising, e-commerce platforms among others. Recommendation The relationship that a company has with its customers is considered to be what a company depends on to succeed in its operations. This means that good customer treatment will ensure that the customers return and they can also attract new customers through word of mouth. Staples should make improving customer relations an integral part of its operations by catering for its customers and making sure that they deliver precisely what they want. The transactions that they conduct should be directed towards serving and retaining these customers. Action plan The company embarked on a plan that is designed to improve and better respond to the needs of the customers that it serves and in the process accelerate growth. This will be done by integrating the retail and online offering as well as increasing investment in its online businesses, reorganizing its operations, implementing leadership changes and initiating a multi tear cost savings plan. The management wants to make the company the sole source product authority for numerous businesses in their millions while continually building on their strengths that are the basis of the success that they have been able to post so far. In the process of improving in the strengths that the company has, it will focus on accelerating growth of the online business, fully integrating the retail and online segments, improving the retail store productivity and returning cash to the stakeholders. Contingency The company rents a number of retail and support facilities that are under long-term agreements that are non-cancellable. Most of the lease agreements normally contain renewable options and rent escalation clauses which allow the tenants to be able to terminate the agreements within a certain number of years provided they give notice and a fixed payment Executive summary Staples provides mainly gives its services to the businesses that are large unlike OfficeMax mainly focuses on small scaled companies and homes and this is where they have been able to reap their profitability. With the world recession that is taking place, and the promotion of the home-based offices that are connected through the internet, staples has to review the marketing strategy that it has in order to deal with the home based offices that are coming up every day through the creation of the retailer based sales points instead of using the extensive improvement of branded store houses that can only serve a small forte of customers. The international market is a major segment that Staples has not been concentrating on and this has reduced the competitiveness power that it has in the global market. In fact, Office Depot has created a wide international market that has been able to increase the pool of services that it caters for and therefore it can decide to use the financial ability that it has to venture into the existing staples market. This therefore means that the managers at Staples are required to review the priorities that the company has so that it can be able to take advantage of the worldwide market that it has and in the process increase its operating capital to enable it to overcome future threats that might come as a result of the competition. This means that the future market for staples will be difficult unless it can be able to come up with strategies that are designed to cover the largest retail and international market. The unavailability of staples products in the small markets that has been a common occurrence has also worked towards slowing its market expansion making it lose customers who rather use any other company’s products. Works cited Barajas, Louis. “Overworked, overwhelmed & underpaid.” Nashville, Tenn.: Thomas Nelson, 2008. Print. Griffin, Ricky and Gregory Moorehead. “Organizational behavior.” Australia: South-Western/Cengage Learning, 2010. Print. Sims, Ronald. “Managing organizational behavior.” Westport, CT: Quorum Books, 2002. Print. Read More