J. C. Penney Company Inc., (JCP) like other chain of companies in the US, has a history of changing its management strategy to suit the growing demand for good governance (Nafziger, 2012). JCP deals in clothing lines and retail business in various countries of investment. Its position in Texas provides it with an opportunity to serve the suburban community and other metropolises around the world. With over 11, 000 stores across US States, JCP sold its merchandise through personal selling.
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In 2013, the company indicated interest in Seattle’s Best Coffee and Portrait Studios. This explains its business strategy that focuses on a variety of products and services for people through the numerous convenient stores distributed in the country (Talley, 2012).
Since the 1960’s, JCP has used a similar management style until the 21st century when it realized the importance of incorporating technology in the new democratic style of management. This paper intends to explain the company’s management style including the advertising technique that helps it achieve a competitive advantage.
Changes in J.C. Penney’s Management Style
Management strategies have direct impacts on organizational performances since inception. JCP incorporated different management styles owing to the changing consumer environment. Two most common strategies adapted by the company include:
Acquisitions and Expansion
Since 1960, the company acquired The Treasury outlets, but JCP experienced losses by the end of 1962. This involved an agreement between JCP and a General Merchandise Company that offered the company the stores it needed during the period. Within the same period, JCP extensively accessed about 10 stores through a Milwaukee acquisition contract.
This provided the company with an opportunity to venture into the market in Alaska and other states in the US. Besides these acquisitions, JCP equally purchased Supermarkets Interstate. Normally, an independent organization rarely involves the managing director actively in most house businesses.
This enables it to grow even in the absence of the founder. At JCP, it was impossible to operate since 1971 following the death of JC Penny (James Cash). For 30 minutes, all stores across the US closed down in honor of JC’s departure. Instead of accruing losses, the company made huge profits since most suppliers and clients paid tribute to the founder of JCP.
Two years later, the company used its profits to increase the number of stores by over 2000. The company’s lack of autonomy ensured that the top management made most decisions. It was difficult to project future outcomes of an action unless an employee had close relations with the top managers. In 1974, the company faced huge losses because of the inflation. Democratic management styles enable people to share ideas in order to avoid the effects of natural occurrences such as inflation. However, this could not happen at JCP.
In the early 19th century, JCP began direct marketing by merchandizing its products through the internet. Globalization made it easy for JCP to acquire customers and mergers through the internet. It used this platform to sell shops to established brand names, such as Firestone. Its Viewtron Videotex catalog helped the company to acquire new stores and to market its products. The JCPenney National Bank allowed customers to use credit and debit cards for withdrawal and deposits.
These automated cards had the company’s name making it possible for JCP to reach out to many clients through virtual techniques (Nelson, 2005). It had to reduce the number of stores it opened for automotive purposes. Instead, it directed most people to the online portal. The innovative transition displayed JCP’s change strategy. The company reduced dependence on the founder because of his demise. It adapted a new management style that would help it in increasing profits while it remained competitive.
Current Management Style
JCP’s current management style focuses on e-commerce, endorsement of celebrities for adverts, and diplomacy in business operations. Myron Ullman, the current CEO, uses technology to enhance interpersonal skills. He seeks to improve a management environment created by his predecessor, Ron Johnson. Its website (JCPenneyBrands.com) creates easy accessibility to products and services making information flow fast and effectively (Hellriegel & Slocum, 2007).
JCP recognizes the efforts of different designers in their clothing industry. This boosts their self-esteem while motivating them to improve. JCP managers realized that democratic leadership was essential for team building and collective growth of the company. A change in strategy began in 2007 when the management sought to introduce innovative and interactive strategies of communicating with clients.
The company expected to increase its profit margins after introducing Ron Johnson from Apple Inc. According to experts, the CEO did not offer a guarantee for success in a company that dealt in completely different products and services from Apple Inc.
JCP’s current management strategy includes generation of creative ideas for overall organizational development. However, it uses radical measures including the ability to lay-off workers and reduction of store acquisition.
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Even though these strategies contribute towards profitability, they reflect the opinions of the top management. There is a high possibility that JCP will experience a similar style of management as the era of JS Penny. The CEO seeks to make a general overhaul in the company by assuming the status of a “start up” organization.
Senior Management’s Role
Senior managers at JCP including the CFO, CEO, and the creative designer often encourage people to make popular decisions. Ron Johnson played a significant role in transforming the organization from a catalog-based retailer to an internet retailer. According to the CEO, each employee needs to be responsible for his/ her actions within the company.
The senior managers ensure that employees develop innovative ideas, which the senior team approves. Johnson has the ability to approve the release of company annual reports. This explains why the senior manager laid-off 600 workers in 2013. Johnson equally supports establishment of virtual stores through the internet. In 2012, the company managed to freeze 100 shops and transformed their business transactions to online techniques (Nafziger, 2012).
Today, clients consult the company online platform; they make orders, get shipment, and pay through JCP MasterCard. The transition cost the company many resources, acquisition of a CEO with a successful record from Apple, and loss of stores and workers. In essence, it was not a seamless process and JC’s senior staff had to endure many challenges between 2012 and 2013.
Among the decisions made by Johnson, change of designs and pricing strategies took precedence. Even as the transition became a success, employees and clients sought for Johnson’s retirement following the radical strategies he used to change the management of the company. This led to a forceful eviction from the company in 2013. It led to a reinstatement of former CEO, Myron Ullman (Talley, 2012).
During marketing, creative designers sometimes use celebrities since they have the ability to create credibility through their charisma. In 2008, JCP used Ralph Lauren Kimora Lee Simmons to brand position the new clothing line for men and children. The two had a significant impact on sales and expansions for JCP. Kimora Lee provided professional advice to consumers and this contributed to one the highest annual sales of Decree and Fabulosity clothing lines.
By the end of 2012, the company profit margins increased to 32.5% (Nafziger, 2012). Celebrities have a natural allure for the audiences they command. Similarly, they are likely to influence sales when used for advertising, or selling. There are several avenues of sales promotion, which Johnson never explored. Instead, he concentrated on innovation, and Ullman has the duty to restore the company image, which he initially created during his tenure.
JCP needs to implement an automated communication system that makes it easy for customers and employees to exchange ideas. Previous innovative strategies failed since the over ambitious Johnson rarely included employees in rational decision-making procedures.
Through video-conferencing and virtual messaging, employers and employees will know all activities in the company and contribute towards its collective development. Instead of laying-off workers, the company will employ competent graduates who will increase organizational performance through technological assistance (Talley, 2012). JCP needs to redeem its brand image by increasing the number of employees and enhancing effective communication with clients.
JCP displays inability to make a rational decision when choosing organizational leaders. It changes its management strategies quickly and makes it difficult for employees to adapt to a single style of management (Nelson, 2005).
The continued alteration of CEO’s delays the achievement of organizational goals, and this affects pricing in the company. After reinstating Ullman, JCP should not interfere with his leadership until 3-5 years elapse. Normally, most organizational strategies function for 3 to 5 years making it impossible to replace the CEO even when he/she has a poor management style.
Hellriegel, D., & Slocum, J. W. (2007). Organizational behavior. Mason, Ohio: Thomson/South-Western.
Nafziger, E. W. (2012). Economic development. Cambridge: Cambridge University Press.
Nelson, B. (2005). The Management Bible. Hoboken: John Wiley & Sons.
Talley, K. (2012, April 5). J.C. Penney Trims Headquarters Staff. The Wall Street Journal. Retrieved from https://www.wsj.com/