discussion replies- Whole Food

Reply1

step 1: Define the Problem

 Expanding into the brick-and-mortar space was the next significant milestone that Amazon was ready to accomplish with Whole Foods. But the “Whole Foods – Amazon” acquisition exhibits a tale of two completely distinct cultures (Blanding, 2018). Amazon has been extremely successful since their establishment in 1995. Since they primarily operate on an online platform, they build efficiency through innovation, lowering costs, speed, data standardization and consistency to make their customers happy. But unlike Amazon, Whole Foods operates more on human interaction, personalized service, and team empowerment in decision making (Blitz, 2021).

In defining the problem using the OB framework outcomes, it appears that their cultural differences lie on the individual, group, and organizational levels of the organization (Kinicki, 2021). Since the merger, employee morale is low, the workspace has taken on a stressful undertone and keeping up with the logistical operational standardization has received negative backlash from their employees and customers. For a brand-new merger, this is sad news for both reputable companies to face. 

 

Step 2: Identify the causes of the problem.

How did they end up in such a negative problematic state? According to Blanding (2018), after the acquisition, Amazon went straight into takeover mode and immediately added their brand in Whole Foods stores. This was the start of the downward spiral no one anticipated. In addition to the branding, they utilized data to determine more efficient product mixes. This reduced the empowerment from the Whole Foods team, in how they matched their products in the past and creating new inventory systems (Blitz, 2021).

Some situational factors like job design, leadership, and organizational factors were a huge negative input in the eyes of the Whole Foods staff. The individual level processes like the equity/justice theories are evident in this case study (Kinicki, 2021). While Amazon’s approach works extremely well for online shopping, it doesn’t fit with Whole Food’s brick-and-mortar operations. Whole Foods was a “Fortune 100 Best Companies to Work For” for 20 years in a row until Amazon took over (Blanding, 2018).

 

Step 3: Recommendations

 Proverbs 15:22 says, “without counsel plans fail, but with many advisers they succeed.” I’ve been involved in two mergers and acquisitions of financial institutions and these projects require a lot of planning, agreement of certain protocols and participation in implementing the new strategy. I can attest to the feeling of wanting to get right in and make change instantly. But that’s not necessarily the best initiative to take so early in the process. The Amazon and Whole Foods acquisition proves that without careful goal planning, bringing the two powerhouse companies together doesn’t always measure up to the immediate success they envisioned.

I recommend that the Amazon leadership team reevaluate their approach to get buy in from the employees and from the customers. It is time to progress on and reinvent new core competencies. Be transparent with the teams and acknowledge the deficiencies that exist. I suggest that they perform job-shadows and collect anonymous feedback from each store. Once they compile the responses, create a job characteristics model that will work to promote a more empowered culture. The job characteristics model will promote high intrinsic motivation that will improve job satisfaction (Kinicki, 2021). Amazon doesn’t have to return to Whole Food’s old processes, they should build a new process that blends the best of both companies together. Focus more on the end goal, instead of the process to get there. The other recommendation is to listen to the customers. According to Blitz (2021), successful companies focus on their customers wants and needs because the business fails if customers are not satisfied.

 

References

Michael Blanding. (2018). Amazon vs. Whole Foods: When Cultures Collide. Harvard Business School Working Knowledge.  https://hbswk.hbs.edu/item/amazon-vs-whole-foodswhen-cultures-collide

Kinicki, A. (2021). Organizational behavior: A practical, problem-solving approach. McGraw-Hill.

Blitz, A. (2021). Surviving disruption: the grocer's tale. The Journal of Business Strategy, 42(1), 13-22.  https://doi.org/10.1108/JBS-07-2019-0152

The Holy Bible, English Standard Version. ESV (2016).  biblegateway.com

 

Reply 2

 In this case, the problem is decreased consumer satisfaction as a result of Amazon’s highly centralized and a data-driven approach to business decisions. This has had a negative effect on the employees and the customers of Whole Foods. Before Amazon bought Whole Foods, the owners of the stores had significant autonomy about the decisions they made and focused their attention on better serving their customers.  

            The causes of the problems are that Amazon has failed to understand what customers expected from the Whole Foods merger. For personal factors, stress from employees to make performance expectations has been an outcome. As a result, employees might feel conflict and have to rush to make deadlines. The outcome is that employees' work attitudes toward change can be negative if they think the company does not support their employees, resulting in higher turnover. As situational factors: the organizational culture of Amazon has affected how consumers see the merger, and employees might feel the company that does not share their same values. The group dynamics of employees have changed dramatically. As a result, the outcome is that the employee’s cohesiveness has changed, and conflict can emerge due to employees competing to make their daily targets. Organizational practices such as increased efficiency at the cost of consumers' preferences can drive customer satisfaction to decline. Companies should be able to adapt and change to changes in their customer's preferences.  

            Recommendations: Solve it. Changes will have to be made for Whole Foods to be on the Fortunes Best Places to Work list again. An effective leader will have consideration with their employees to create mutual respect, and trust and recognize the needs and desires of their subordinates (Kinicki, 2021). Leaders should empower their employees and make employees feel safe at work, have constant communication with them, and give and receive feedback. Leaders can involve their subordinates in the change by giving them information and opportunities for participation. This can help employees increase their acceptance to change (Van Dam, 2021). Leader-Member Exchange Theory (LMX) can help employees engage, building employee loyalty and trust (Van Dam, 2021). Employees tend to resist change when they do not understand the new management's abilities and motives (Van Dam, 2021).

Biblical reference

            Philippians 2: 3-4 reads, “Do nothing out of selfishness or out of vainglory; rather; humbly regard others as more important than yourselves, each looking out not for his own interests, but (also) everyone for those of others.” Jesus is the perfect example of unconditional love. We should follow his teaching and become leaders who are effective and help employees feel valued and empowered. Being a good person does not require much and we should constantly try to improve ourselves.

Conclusion

            Amazon uses a centralized and data-driven approach to maximize efficacy and profit. Still, when they acquired Whole Foods, they did not have a clear idea of why people preferred Whole Foods over other stores. The decentralized high-touch approach gave Whole Foods the advantage because consumers felt the company cared about their inputs and preferences. Leaders can become effective if they understand the needs of their subordinates, make the changes necessary, and provide feedback when needed.

References

Kinicki, A. (2021). Organizational behavior: A practical, problem-solving approach plus Connect. McGraw-Hill.

Senior, D. (2010). The Catholic Study Bible. New York: Oxford University Press.

Van Dam, K. V. (2021). The impact of middle managers on employees' responses to a merger: an LMX and appraisal theory approach. Journal of Change Management, 432-450.