An Overview of Management Practice of Whole Foods - Essay Example

? An Overview of Management Practice of Whole Foods Submitted by: Management December 5, TABLE OF CONTENTS Introduction 3 2. Brief Overview of the company 3 3. Motivational tools and strategies such as Work Life Balance, Benefits , Virtual Work, Rewards, Recognition, Performance Management, Training and Development 3 4. Leadership/ Management Style 4 5. Organizational Culture / Corporate Values/Norms 4 6. Teams and Employee Empowerment 5 7. Diversity Initiatives 5 8. Organizational adaptability and response to change, innovation 6 9. Conclusion 6 10. References 7 WHOLE FOODS 1. Introduction This study focuses on the operations of Whole Foods Market and to know what cultural practices of management made it big. The opening of the Whole Foods Market was well-timed as there were only few stores that sell organic foods at the time. It was an opportune time since consciousness of people on the healthy lifestyle has begun; there is an increasing educated age and wealthy population, and environmental concerns are spanning across the globe. 2. Brief Overview of the Company Whole Foods was formed in 1978 by two friends, John Mackey and Rene Lawson Hardy from a borrowed capital of $40,000 to sell natural foods in Austin, Texas. It was originally known as Safer Way, to be distinct from Safe Way that was also in Austin, Texas. Expansion and mergers has been part of its business strategies as, within only two years after it was formed, it entered into a partnership with a grocery store that resulted into the opening of the Whole Foods Market in 1980. It didn’t stop there since from then on; WFM had several acquisitions of companies carrying organic products. In 1992, the company went public trading in NASDACQ Global Select Market. It sales revenue saw successive growth that reached $11.7 billion in 2012. Correspondingly, shareholders earnings have steadily increased, from $0.82 in 2008 to $2.52 per share in 2012. In 2013, its stores are located in 335 sites in North America, Canada, and United Kingdom with prospects of aiming for more stores opening in years to come. The store offers perishable foods, grocery, meat and poultry, seafood, bakery, prepared foods and catering, specialty beer, wine and cheese, coffee and tea, nutritional supplements, vitamins, body care, educational products, floral items, pet products and household products (Whole Foods Market 2012 Annual Report). WFM is the world’s leading retailer of organic foods and is the first grocer to be certified as “organic”. Its corporate mission is “to promote the vitality and well-being of all individuals by supplying the highest quality, most wholesome foods available”. This has been translated to a core mission, of “ promotion of organically grown foods, healthy eating, and sustainability of the eco system”. 3. Motivational tools and strategies such as Work Life Balance, Benefits ,Virtual Work, Rewards, Recognition, Performance Management, Training and Development Fortune List has ranked WFM for 15 consecutive years as “One of the Best Companies to Work for in America”. This recognition acknowledgment bears out WFM’s commitment to fulfill its core values of “Supporting team members’ happiness and excellence.” . As motivational tool, WFM has designed a “Total Health Immersion and Healthy Discount Incentive program to promote health of its employees. This program aims to educate members and create awareness of the benefits of healthier habits that contributed to year-over year decreases in participant medical claims and inpatient stays in hospital, and an increase in annual preventive wellness exams. WFM recognizes team member’s efforts so much so company supports them in many other ways. Part of its package compensation plan includes a generous store discount, medical care, dental and vision plan, life insurance, retirement savings plan, gain-sharing program, stock option plan and emergency funds, paid time off and leaves of absences. A salary cap limits cash compensation (wages plus bonuses) to 19 times the average of all full-time Team Members employed during the year. 4. Leadership/ Management Style Company employs 73,000 team members, and are not called employees. WFM practices team approach, or an empowerment organization. John Mackey, one of its founders, claims that this kind of approach is a rare style in America, but he thinks that the team approach is the secret of WFM’s success. The team approach according to him represents company culture of shared-decision-making and the power of the group mind. For them, team concept is ideas. For instance, WFM has Co-CEO, and implements a five-executive team 5. Organizational Culture / Corporate Values/Norms WFM has established core values that stayed since the store was established and defines its corporate culture. It states: We sell the highest quality natural and organic products available We satisfy, delight and nourish our customers We support team member happiness and excellence We create wealth through profit and growth We serve and support our local and global communities We practice and advance environmental stewardship We create on-going win-win partnerships with our suppliers We promote the health of our stakeholders through healthy eating education At WFM these core values are guiding principles which they encourage their team members to live by daily in the course of their work. (WFM.com) 6. Teams and Employee Empowerment Employee empowerment by definition is the process of providing production and managerial guidelines, and then allowing employees to make the day-to-day decisions that affect their job duties.” (Anderson, Arnold, 2013) Employee empowerment is a management strategy that is being popular today. WHM is one company that has been practicing this culture of employee empowerment. Company encourages team members to choose the most important core value of the company then empowers them to live by it to the fullest in the course of its work. An example of its employee empowerment is its unique hiring process cited by Executive Online (October 02, 2011) wherein a team or panel interviews an applicant. The rationale of team member participation is to put culture of empowerment into action. WHM believes that the team interview process is an effective way to make a decision for hiring because all of them give an insight of the roles and responsibilities, the expectations and challenges of the of the job. Company culture of WFM is hiring from within first, vacant positions are filled by existing team members, so external candidates may not always be considered for the job. Once an applicant is accepted, the applicant undergoes an orientation and training classes for period of 30 to 90 days, wherein the team leader evaluates his/her progress. If the team leader recommends the applicant to be a team member, fellow team members will vote on whether to add the applicant to the team. Accordingly, the team voting process is a process of empowerment to share in the building of a quality team. An applicant is voted to become new member based on adherence to policies and procedures, positive job performance, teamwork, and excellent customer service skills. 7 Diversity Initiatives WFM does not encourage discrimination in its team members. Out of its 73,000 team members, 44% are women and 44% are minorities. It respects gay team members and offers domestic partner benefits for same-sex couples (CNN 2013). 8 Organizational adaptability and response to change, innovation WFM is compliant to the provisions set by United States Department of Agriculture Organic Law set in 2002. The Organic Program regulates the standards for y farm, wild crop harvesting, or handling operation that wants to sell an agricultural product as organically produced. (USDA, 2011). WFM initiated the strategy of Whole Trade Guaranty wherein products are sourced from developing countries that meet the company’s criteria of high quality standards. WFM also provide money to producers to ensure sound environmental practices. They also buy from local producers whose products passed quality standards to be assured of freshness of stocks. Latest innovation is the “Eco-Sale” rating system introduced in 2011. It is the first national retailer to set a comprehensive set of green cleaning standards to help shoppers be informed of the ingredient contents of the product. The color-coded rating system permits the customer to identify the impact of the product to the environment and safety based on a red-orange-yellow-green color scale of its products on the cleaning category. Accordingly, products that rate Orange, the baseline rating, must be free of phosphates, chlorine, or artificial colors; to score Yellow, a product must meet Orange criteria and contain 100 percent natural fragrances and possess minimal safety concerns; Green-rated products meet both Orange and Yellow standards and contain 100 percent natural, non-petroleum ingredients. Vendors have been requested to evaluate other products in the cleaning category, since all WFM’s national brands meet the baseline orange standard (Hickman, Matt. 2013). 9. Conclusion Whole Foods Market is an organization that experimented successfully with the team empowerment culture management. WFM recognizes the importance of their workers, took pride on seeing the employees’ contributions, and considers them as its important assets in their business. It has done away with the command-and control management style but has encroached on the coach and collaborate schemes that encourages empowerment. This helps make relationships of management and employees stronger. Here suggestions are encouraged and employees are allowed to contribute their ideas in directing the business. This idea makes the employee happy and motivated. They did not only imbibe healthy life style culture to its customers, but practiced them to its employees as well. A gym for employees’ use encourages them to exercise and stay fit, and the health incentives program that educate employees on proper eating of healthy foods. References Anderson, Arnold, 2013 “Examples of employee empowerment”. Retrieved 05, 2013 Read More