Employee Empowerment Culture
Today’s
employee’s have a desire to have a say in the decisions that they make day in a
day out. Management’s shift from primary decision maker to a facilitator is a
process known as employee empowerment. Osborne & Plastrik (2000) describe employee empowerment as a push
of the authority to make decisions down to the frontline employees. Instead of
responding to the orders they are given, they achieve results by taking
personal responsibility of their duties. “Cultures that support
empowerment encourage managers to be catalysts, facilitators, coaches, enablers
and developers of others rather than merely decision making authorities” (McCrimmon Ph.D., 2011).
Issues, Outcomes
& Analysis
Whole Foods wanted to boost
employee morale and create an overall happier workforce. They decided to
implement team interviewing, which calls for a diversified panel of employee’s
interviewing applicants. The team member participation empowers the culture at
Whole Foods because employee’s feel they have a say in the types of people that
are hired by the company. They also promote hiring from within. The results achieved
an added benefit in that “the process educates both the interviewers and the
candidates by giving insight into all the expectations and challenges of the
job” (Shelly, 2011). If I were involved
in the management of Whole Foods, I would probably not utilize this technique.
I think that it was a very profound move for the company to make as well as a
very good idea. My personal management style would leave me wanting more
control over the type of people that I was hiring. If a few bad apples were
able to penetrate the system, they could potentially end up hiring more like
them. The idea is a bit too modern for my taste but it very interesting to
consider.
The Theory of Price Penetration
When a
company is trying to introduce goods or services that are new into the
marketplace, the theory of price penetration is often implemented. It involves
the price of the new product being set lower than the company intends to sell
it for in the future. The purpose of the low price is to penetrate the market
by securing a significant amount of the market share. Price penetration is usually
used when the market of people willing to pay a premium for the product is
insignificant in regards to the market share of customers looking for a good
deal. One of the most important goals of price penetration is to discourage any
competitors from attempting to enter into the market that you are selling in.
“A penetration policy is even more attractive if selling larger quantities
results in lower costs because of economies of scale” (Hillstrom, 2002). Pricing is the most important element of a
company’s business strategy because it is the only factor that produces
revenues. All the other elements of the marketing mix represent incurred costs.
Issues, Outcomes
& Analysis
Wal-Mart is
always looking for ways to give their revenue a boost. Wal-Mart utilizes penetration
pricing on the new products that they offer in their stores. The new products
price will beat any other store that you could purchase the product at, and the
hope is that you will end up buying other products once you have been drawn
into the store (Hainer, 2011). Although
they are actually losing money selling you the new product, they usually make
up for it many times over by the other sales they make once the customer is
through the door. Wal-Mart also uses penetration pricing when they open stores
in new geographic markets. They lower prices intending to undersell the local,
better established competition in the new area. As their loyal customer basis gradually
increases over time, so do their prices. “A recent pricing issue is that of
everyday low pricing, where the retailer charges a constant, lower price at all
times, with no temporary price discounts. Wal-Mart has led the trend toward
everyday low pricing” (Allen, 2001). Wal-Mart has used the theory of
penetration pricing as their brand building strategy and they have been very
successful in doing so. I think that Wal-Mart has done an exemplary job employing
the theory and I wouldn’t have changed a thing had I been part of the
management team.
References
Allen, G. (2001, May). Witiger. Retrieved
October 28, 2011, from Pricing Objectives:
http://www.witiger.com/marketing/pricingobjectives.htm
Hainer, S. (2011). chron. Retrieved October 28,
2011, from Penetration Pricing Examples:
http://smallbusiness.chron.com/penetration-pricing-examples-18365.html
Hillstrom, K. (2002). Encyclopedia of Small
Business. Retrieved October 27, 2011, from Pricing Penetration:
http://www.enotes.com/small-business-encyclopedia/
McCrimmon Ph.D., M. (2011). Leadersdirect.
Retrieved October 28, 2011, from Empowerment:
http://www.leadersdirect.com/empowerment
Osborne, D., & Plastrik, P. (2000). The
Reinventor's Fieldbook. San Francisco: Jossey-Bass.
Shelly, J. (2011, October 2). Human Resource
Executive Online. Retrieved October 28, 2011, from Innovative Hiring at
Whole Foods: http://www.hreonline.com/HRE/story.jsp?storyId=533341639
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