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Module 4 - Case

ORGANIZATIONAL CULTURE AND DIVERSITY

Assignment Overview

According to your Organizational Behavior text (sec. 15.3), there are nine values that represent corporate cultures: innovation, aggression, outcome-oriented, stable, people-oriented, team-oriented, detail-oriented, service culture, and safety culture (p. 642). Let’s look at each of these values to see how they differ from each other and why certain companies are identified with these values.

Innovative Cultures

Innovative organizations are flexible and likely to take risks, and foster the creation of new ideas. They are inclusive of all employees, encouraging input from everyone. Another key point of an innovative organization is its flat hierarchy, which is one where titles are not as important as an employee’s contribution to the organization.

Your text identified two companies that were in the 2014 version of Fast Company’s The World’s 50 Most Innovative Companies: W. L. Gore & Associates and Genentech. Two of the top 12 innovative companies listed in The World’s 50 Most Innovative Companies 2019 article are Shopify (12) and Square (8), which are in similar industries and could merge down the road. Shopify is a tool for online shopping that developed one-click purchasing via any method. The Shopify CEO refers to Shopify as “a retail operating system.” Square is a device through which credit card payments can be completed and was described as “a more elegant way to pay” (McCracken, 2019). It can also be used for payroll, loan applications, and appointment scheduling—three processes which small businesses can use the Square for.

Aggressive Culture

When you think about a strongly competitive company such as Microsoft, you will see it has an aggressive culture because it is an extremely competitive company that repeatedly outperforms its competitors. One important concept to note is that aggressive companies are competitive to the detriment of other areas, such as corporate social responsibility. The language spoken by its leadership team also imparts the idea of the company’s aggressiveness when it says things like, “We will kill our competition.”

To counter some of the negative feelings toward Microsoft, its creator, Bill Gates, has taken steps to be more philanthropic. He created the Bill & Melinda Gates Foundation, which focuses on improving life around the world by reducing poverty.

Outcome-Oriented Culture

The outcome-oriented culture is one that values results. There is a high degree of competition among employees. Their main focus is on achieving high financial results every day. One of the worst cases of a company that did this (note the use of the word “did”) is Enron. Enron valued results and actions more than anything, including being honest and ethical. Things got so bad at Enron that the normal behavior at the company was everything the rest of us consider unethical, such as misleading (“lying to”) their accountants and investors about the actual financial status of the company. A more recent example of a results-oriented company is Bernie Madoff’s organization, which perpetuated the largest Ponzi scheme in history on its investors. Like Enron’s leadership, Bernie is living the rest of his life in a federal prison.

Stable Culture

At first glance, a stable culture might appear boring, as since it is risk averse. They are It is considered predictable, rule oriented, and bureaucratic, and had has a centralized decision-making policy. The problem with a stable culture is that it only worked works fine well when everything was is going well and there was is little innovation or change. An example of a company that suffered from a stable culture is Kraft. The reason this culture was bad for Kraft was because a slow centralized decision-making process did not fit with a changing and dynamic government. It took too long to make changes in the company—too much red tape with too many people having a part in making decisions.

Stable Culture

At first glance, a stable culture might appear boring, since it is risk averse. It is considered predictable, rule oriented, and bureaucratic, and has a centralized decision-making policy. The problem with a stable culture is that it only works well when everything is going well and there is little innovation or change. An example of a company that suffered from a stable culture is Kraft. The reason this culture was bad for Kraft was because a slow centralized decision-making process did not fit with a changing and dynamic government. It took too long to make changes in the company—too much red tape with too many people having a part in making decisions.

People-Oriented Culture

A people-oriented culture is one where employees are valued and treated with respect. In this culture, employees are provided benefits even if they are part-time, such as health insurance and tuition reimbursement. Managers know their followers very well, including their family lives. Two compatible styles of leadership in a people-oriented culture are transformational and servant leadership. Both of these styles fit well because of the managers’ caring about their employees. According to your text, employees stay at companies that have a people-oriented culture about 14 months longer than at other companies. Starbucks is a great example of a company with this type of culture and it is always ranked as one of the best companies to work for, according to Fortune magazine.

Team-Oriented Culture

Companies with a team-oriented culture work together to complete tasks. They are collaborative and focus on resolving issues in teams. One such team-oriented company is Southwest Airlines. They meet twice a day, first to determine their daily focus and later in the day to figure out the issues that need to be worked on, coming up with solutions together. Not only do they work in teams, but the company is so team-focus that they strive to hire only people who prefer to work in teams and are seen as team players.

Detail-Oriented Culture

Companies that have a detail-oriented culture are all about paying attention to details, including details of customers. The textbook gives an example of how the hotel industry uses customer feedback to make changes that provide competitive advantage by differentiating themselves from industry competitors. The best quality hotels greet repeat customers by name and provide them with perks, such as placing champagne in their rooms for special occasions. Another industry that bases its reputation on being precise is in the accounting industry. Can you imagine what would happen if a company like H&R Block consistently made errors on customers’ tax returns?

Service Culture

A service culture is one of the two new culture types added to the list of seven original culture styles. You see this type of culture in retail and hospitality, but any company that has customers and employees who deal with customers has some form of service culture. In the end, if employees at any level of an organization deal inappropriately with customers, the business will be irrevocably damaged and go out of business. What really defines a service culture is having employees that are not just invested in the company but in its customers as well. They understand the importance of customers and of keeping them happy. Happy customers generate more business and more happy customers. One of the aspects of a company with a service culture is that its employees are so customer-centric that they solve problems before they become problems—and without being told to.

Safety Culture

This final culture, safety culture, is included because companies have realized that their employees are important to the growth and success of the company, so it is doubly important to keep them safe. Reducing workplace accidents increases company morale. A company with a safety culture is one where employees are encouraged to report potential safety hazards they spot as they do their jobs. This commitment to safety begins at the top of an organization. As employees see this focus, they begin to reflect the actions of their managers.

Signs of a Toxic Company Culture

It is not always easy to recognize a toxic company culture. Things may seem fine on the surface until one day you suddenly realize what is going on. That is the day you either type up a resignation letter and walk out the door or accept matters as they are. Or if you are not in a position to just suddenly walk away from a job, you start looking for a new job and leave as soon as possible. What makes a toxic company culture? Review the following five signs as discussed by Zimmerman (n.d.).

Inauthentic leaders: These leaders lack integrity, authenticity, honesty, and transparency. These are leaders who say one thing and do another, living by the mantra, “Don’t do as I do, do as I say.” According to The Cornerstone on Demand report, “Good employees are 54 percent more likely to quit when they work with a toxic employee.”

Unmotivated employees: This type of employee can start an exodus of good employees who do not want to be around someone who is constantly negative about their employer. If you enjoy your workplace, how do you spot these people so that you can avoid them? Unmotivated employees are found walking around, chatting negatively about the company, looking very unhappy, not focused on their work tasks, doing a lot of complaining without offering solutions, and appearing to be simply filling in their time until it is time to go home or until they find a new job.

Playing games: Employees who complain a lot, try to sabotage the job prospects of others, and blame other employees for their own mistakes or shortcomings are playing games that have a negative impact on other employees.

Zero communication: Employees understand downturns in the economy can negatively impact their company. What they do not understand, however, is why the company does not keep its employees up-to-date on its financial situation. As long as people know what is going on, they are less likely to spread rumors of the company closing. Companies in this situation need to provide information as soon as it is available. A lack of communication instills fear, anxiety, and nervousness in employees and their imaginations run rampant because there is no real information on which to focus.

Red tape: Many large corporations have numerous levels of decision making which stymie growth by slowing down innovation and implementation of plans and programs.

Signs of a Great Company Culture

Do your employees enjoy coming to work every day? Have you ever heard anyone at your company say that they look forward to going to work every morning? Employees spend more waking time at their job every week than they do at home, so a positive company culture is vital. Check out these signs of a company with a great culture:

A long line of job applicants: When employees enjoy working for a company, they do not keep it a secret. After all, good news spreads like wildfire (although to be perfectly fair, so does bad news). Some of the companies identified as hiring now include Amazon, Apple, Berkshire Hathaway, and CVS.

Low employee turnover: A company has low turnover when its employees like their workplace and their work. Two such companies are Hurco Inc. and Rexnord Industries. Low turnover is indicated by the number of employees who stay at a company for more than 10 years. At these two companies, the majority of their workers were employed there over 20 years—some over 30. Both of these companies are successful multinational manufacturing companies that offer excellent benefits to their employees. Other companies with low employee turnover include Google, Kodak, General Motors, and Domtar.

Smiles and laughter: A sure sign of a happy company are happy workers, including the receptionist who greets you with a friendly, “Good morning.” Even in times of great stress, happy employees still spread the cheer around because they are emotionally balanced and able to use stress to their advantage. A good example of a company known for its happy employees is Southwest Airlines. Its flight attendants frequently offer vocal in-flight entertainment as a way to relieve stress for passengers who are afraid of flying. It is hard to not smile at their funny jokes, songs, and stories and the fun makes the trip fly by (forgive the pun)!

Open communication: Open communication instills a sense of being valued by an employer. The key point is for employees not to be surprised by a sudden announcement of an occurrence. Instead, they are kept updated about changes affecting the entire organization.

When you think of companies like Walgreens, CVS, Zappos, or Amazon, which type of culture do you attribute to them?

Company Backgrounds

For this Case Assignment, you have the choice of writing a paper about:

Walgreens and CVS or
Zappos and Amazon

The following company information required readings will help you with this assignment:

Walgreens

Walgreens began life as a single, stand-alone drugstore. Over time, Walgreens built more stores around the country. CVS also began as a stand-alone drugstore; however, instead of just building CVS stores around the country, it also expanded its business umbrella over other drugstores and worked in conjunction with grocery stores during a long period of acquisitions. The benefit of this type of M&A is the retention of customers who are loyal to a particular brand name.

Walgreens' mission is to be America's most-loved pharmacy-led health, well-being, and beauty retailer. Its purpose is to champion everyone's right to be happy and healthy. Its pharmacists and technicians are focused on building closer relationships with their patients in the communities they serve.

Diverse employees at Walgreens score the company at 64 out of 100 across various culture categories, placing Walgreens in the bottom 45% of companies in the United States with 10,000+ Employees for Comparably's diversity score. The Diversity score provides insights into how diverse employees feel and rate their work experience at Walgreens across various culture dimensions. Walgreens ranks in the bottom 45% of other companies in the U.S. with 10,000+ Employees for Diversity Score (Comparably, n.d.).

CVS

CVS’s mission is “to improve the lives of those we serve by making innovative and high-quality health and pharmacy services safe, affordable and easy to access" (Comparably, n.d.). CVS’s vision statement is, "We strive to improve the quality of human life.” CVS’s organizational culture has an emphasis on corporate citizenship, in terms of support for stakeholders. Through its corporate culture, the company enhances its corporate image, as well as health care and retail pharmacy branding.

Zappos

Zappos has a mission of providing each customer with the highest standard of customer service. This mission statement indicates a company that is customer-centric, but what else do we know about its culture? In 2009, when Zappos was purchased by Amazon, its employees found out via an email in which its owner said, “Over the next few days, you will probably read headlines that say, ‘Amazon acquires Zappos’ or ‘Zappos sells to Amazon.’” When you think about what you just read about cultures when it comes to communication, where does Zappos fall? Since its employees had no idea this sale was going on, this is a sign of a poor culture because of a serious lack of communication. However, it also falls into the good culture category because of its excellent customer service. Zappos customer service employees have no script or time limits on calls with customers—whatever it takes to make the customer happy. In addition, every new employee has gone through two interviews: The first interview is to make sure they have the right skills and experience for the job for which they are applying, and the other to see if they are a culture fit. As found in the Christofferson (2019) article, “[H]iring people that become good coworkers and good friends is of utmost importance.”

Amazon

According to Yohn (2018), “Amazon's distinctive organizational culture fosters a performance-driven environment that fires up employees to innovate in pursuit of an outstanding, continuously improving customer experience. Its brand identity is based on delivering that same disruptively innovative customer experience.” Though this description indicates Amazon has an innovative culture, Yohn also noted a New York Times article in which Amazon’s culture was described: “Bruising.” “Relentless.” “Painful.” “Frequent combat.” “Burn and churn.” No one would fault you for thinking a company with a workplace culture described in these harsh terms is destined for failure. Yet, in 2016 Amazon nearly doubled its operating income, increased its annual revenue by 27%, and turned in its eighth straight quarter of profitability. What’s more, it tops the lists of many customer service awards, holds the second spot on LinkedIn’s Top Companies to Work For list, and added more than 85,000 employees in 2016. Amazon’s workplace culture is not for everyone—that much was exposed by the article. But its own employees’ response revealed something else: The company’s culture does not need to be “warm and fuzzy” to be effective.

Every organization is different, so its culture should be too. Beyond an obvious baseline, there is no universal definition of a good culture. There’s a unique culture that’s right for each organization. A benevolent and supportive culture might fuel one company’s growth, but might backfire completely at another company that should be more competitive and driven by standards.

Do some background reading on the cultures behind the current competitors, Walgreens and CVS Health, or behind Zappos and Amazon who were competitors in their industry. Here are some required and optional articles and videos to get you started that will give you some background about the cultures of Walgreens, CVS Health, Zappos, Amazon, and culture in general:
tive.

Videos

TV Choice. (n.d.). Organizational cultures and group norms [Streaming Video]. Kent, UK: TV Choice. Retrieved from video.alexanderstreet.com/watch/organizational-cultures-and-group-norms database. Available in the Trident Online Library.

Votaw, K. Q. (2020, February 27). Company culture: You can feel it all around [Video file]. Retrieved from https://youtu.be/ILZHmYZ0vXo. Standard YouTube license.

Required Reading

Christofferson, T. (2019, June 5). 20 years, 20 milestones: How Zappos grew out of just shoes. Retrieved from https://www.zappos.com/about/stories/zappos-20th-birthday

Klein, D. (2011, January-March). Creating cultures that lead to success: Lincoln Electric, Southwest Airlines, and SAS Institute. Organizational Dynamics 41(1), 32. Available in Science Direct in the Trident Online Library.

Organizational behavior. (2017). Minneapolis, MN: University of Minnesota Libraries Publishing Edition. Retrieved from http://open.lib.umn.edu/organizationalbehavior/. CC BY-NC-SA License.

Read the following sections in Chapter 15:
Section 15.2 Understanding Organizational Culture
Section 15.3 Characteristics of Organizational Culture
Section 15.4 Creating and Maintaining Organizational Culture

Rosenthal, H. (2012, December 1). CVS continues to embrace the culture that got it started. Chain Drug Review, 34(21), 42. Available in the Trident Online Library.

Schein, E. H. (2010). Chapter 1: The concept of organizational culture: Why bother? In Organizational Culture and Leadership. San Francisco, CA: Jossey Bass. Available in the Trident Online Library.
(Type Schein Organizational Culture and Leadership in the Summon search box.)

Walgreens. (2019, July 23). Walgreens gets best place to work in 2019 disability equality index. Close-–Up Media. Available in the Trident Online Library.

Walgreens Boots Alliance. (2017). New kind of corporate culture energizes Walgreens. Chain Drug Review, 39(7), 148. Available in the Trident Online Library.

Yohn, D. L. (2018, March 13). Company culture doesn’t need to be “warm and fuzzy” to be effective. Quartz at Work. Retrieved from https://qz.com/work/1227352/amazon-proves-company-culture-doesnt-need-to-be-warm-and-fuzzy-to-be-effective/. Noncommercial use of article.

Zimmerman, A. (2016). 5 warning signs of a toxic work culture. Inc. Retrieved from https://www.inc.com/angelina-zimmerman/5-signs-you-know-its-time-to-walk-out-the-door.html

Optional Reading

Bells, S. (2019, October 13). Walgreens vs. CVS: Comparing pharmacy giants. Market Realist. Retrieved from https://marketrealist.com/2017/10/walgreens-versus-cvs-comparing-pharmacy-giants/. Market Realist Terms of Use grant you revocable license to access and use the Site for your own non-commercial use.

CVS. (2014, February 6). CVS' quitting cigarettes marks a culture change. USA Today. Available in the Trident Online Library.

Organizational behavior. (2017). Minneapolis, MN: University of Minnesota Libraries Publishing Edition. Retrieved from http://open.lib.umn.edu/organizationalbehavior/. CC BY-NC-SA License.

Read the following sections in Chapter 2:
Section 2.2 Demographic Diversity
Section 2.3 Cultural Diversity

Walgreens Annual Report. (2015). Walgreens transformed by megamerger. MMR, 32(7), 55. Available in the Trident Online Library.

Case Assignment

For this Case Assignment, write an essay in which you discuss the cultural differences of two respected companies that are successful in their industry. You have the option of choosing between:

Walgreens and CVS or
Zappos and Amazon

For Option 1, Walgreens vs. CVS, after you discuss the culture of both companies, your ultimate final question is whether CVS should buy Walgreens. You must support your response with at least one high-quality reference.

For Option 2) Zappos vs. Amazon, after you discuss the cultures of these two companies, your ultimate final question is whether the purchase of Zappos by Amazon in 2009 was the right strategy based on the findings of your own online library research and the articles provided. You must support your response to that question with at least one high-quality reference.

For either option, please prepare a 4- to 5-page (not including title page and references) critique per the following format:

Title Page. Be sure to include 5 components of relevant information (e.g., Name, Class, Professor, Assignment, Date) on the title page.

Introduction. Discuss the topic of the paper and how you will approach it. It is best to write this section after you have written the rest of the paper. The title of this first section is NOT the word Introduction; it is the company names for this assignment, that is, Walgreens vs. CVS Health or Zappos vs. Amazon. (The heading for each of the other sections of the paper are in bold in the following four subtopics.)

OPTION 1

The History and Culture of Walgreens. Describe the history and key elements of the culture of Walgreens and explain why these cultural elements are essential to Walgreens’ success. Be sure to apply the background material and support your writing with high-quality peer-reviewed journal articles found in the Trident Online Library.

The History and Culture of CVS Health. Describe the history and key elements of the culture of CVS Health and explain why these cultural elements are essential to CVS Health’s success. Be sure to apply the background material and support your writing with high-quality peer-reviewed journal articles found in the Trident Online Library.

CVS Health Should or Should Not Purchase Walgreens. Make an argument that CVS Health should or should not purchase Walgreens. Discuss the specific differences between the cultures of Walgreens and CVS Health in support of your position. Be sure to use the background material and support your writing with high-quality peer-reviewed journal articles found in the Trident Online Library.

Conclusion. Discuss the key points in your analysis that demonstrate the importance of understanding that organizational cultures are not easily changed and why culture should be a primary consideration when organizations contemplate an acquisition or merger.

Reference List. List all references that you cited in the paper using APA or other standard formatting. References include materials from the required background readings as well as any outside high-quality, peer-reviewed library sources you used in researching and writing your paper. Their purpose is to take the reader directly to the page on which you learned some information.

OPTION 2

The History and Culture of Zappos. Describe the history and key elements of the culture of Zappos and explain why these cultural elements are essential to its success. Be sure to apply the background material by supporting your writing with high-quality peer-reviewed journal articles found in the Trident Online Library.

The History and Culture of Amazon. Describe the history and key elements of the culture of Amazon and explain why these cultural elements are essential to its success. Be sure to apply the background material by supporting your writing with at least one high-quality peer-reviewed journal article found in the Trident Online Library.

It was or was not a good decision for Amazon to Purchase Zappos. Make an argument that Amazon made the right or wrong choice to purchase Zappos. Discuss the specific differences between the cultures of Amazon and Zappos in support of your position. Be sure to use the background material by supporting your writing with at least one high-quality peer-reviewed journal article found in the Trident Online Library.

Note: A URL (website address) is NOT a reference. A reference always contains four parts: author, publication date, article title, and the source of the article. Sometimes there is no author, but the APA manual tells you what you can put in that spot instead, such as the first few words of the article title. The source for a high-quality peer-reviewed journal article is the journal!

Upload your assignment to the Case 4 Dropbox. Be sure to review your TurnItIn Originality report. If the score is over 15%, you may not be writing in your own words and you will need to contact your professor and arrange to revise and resubmit your assignment. However, you cannot revise a paper once it has been graded.

Assignment Expectations

The Case papers will be evaluated using the criteria as stated in the Case rubric. The following is a review of the rubric criteria:

Assignment Requirements: Does the paper directly address all aspects of the assignment? Have the assignment instructions been followed closely?
Critical Thinking: Does the paper demonstrate a college level of analysis, in which information derived from multiple sources has been critically evaluated and synthesized in the formulation of a logical set of conclusions? Does the paper demonstrate that the student has read, understood, and can apply the background materials for the module?
Writing and Assignment Organization: Is the essay logical, well organized and well written? Are the grammar, spelling, and vocabulary appropriate for college-level work? Are section headings included? Are paraphrasing and synthesis of concepts the primary means of responding, or is justification/support instead conveyed through excessive use of direct quotations?
Use of Sources and Mechanics: Does the paper demonstrate that the student has read, understood, and can apply the background materials for the module? If required, has the student demonstrated effective research, as evidenced by student’s use of relevant and quality sources? Does the student demonstrate understanding of a consistent (e.g., APA) style of referencing, by inclusion of proper citations (for paraphrased text and direct quotations) as appropriate? Are appropriate sources from the background material included? Have all sources cited in the paper been included on the References page?
Timeliness: Has the assignment been submitted to the Dropbox on or before the module’s due date?