Introduction
Edward Lampert analyzes Sears’ downfall using the Human Relations Movement (HRM) and the system’s four parts. This paper assesses Edward Lampert’s strategic missteps and priorities that led to Sears’ downfall. Sears’ issues are analyzed using HRM concepts. The paper will also examine the company’s mission and evaluate the clarity, breadth, business-domain definition, stakeholder accountability, and how it fits within its culture.
Problem-Solving Perspective
Edward Lampert may have prioritized real estate value and cost-cutting over retail business fundamentals. Lampert seemed more interested in land value than retail operations when he bought Sears and integrated it with Kmart. Lampert cut costs by disregarding store maintenance and customer service. Sears lost revenue due to this practice, and its company units were set against each other, encouraging sabotage and harsh competition (Kinicki & Williams, 2016).
A lack of teamwork and reliance on individual success hurt Sears’ performance. Lampert’s reliance on online and technology over physical sites may have affected customer service. Amazon, which combined online and offline retail, challenged Sears. Sears failed because Lampert neglected key areas, including retail, customer experience, and teamwork.
Causes of Sears’s Decline
Sears’s failure to adapt to the changing retail landscape led to its downfall, as its inability to adjust to shifting customer tastes and shopping patterns contributed to its decline. While competitors like Walmart and Kmart adopted dynamic pricing and stock management to meet customer demand, traditional retailers like Sears remained bureaucratic and rigid (Kinicki & Williams, 2016).
Additionally, Sears had been experiencing financial struggles, including falling sales and rising debt. Although the deal with Craftsman brought in some much-needed cash in the short term, it was insufficient to address the underlying problems threatening the company’s continued success.
Human Relations Movement’s Suggestion about Sears’ Decline
According to the HRM, management, culture, and employee interactions caused Sears’ failings. Movement proponents emphasize the importance of respecting workers and how strong company relations boost productivity. The HRM’s tenets help explain Sears’ troubles. Despite the HRM’s emphasis, employees are not involved in the decision-making process. Sears’s splintered structure caused fierce divisional rivalry (Kinicki & Williams, 2016).
The highly competitive workplace likely inhibited teamwork since employees were motivated by individual rather than team success. The workplace, employee motivation, and output may have suffered. Few employee development opportunities encourage employee growth. Sears’s lack of store maintenance and training may have hindered its staff’s ability to improve and provide better customer service (Bienenstock et al., 2019). Training restrictions could have hurt employee morale and retail performance.
Diagnosis of the Company’s Decline
Structure
Sears had a fragmented concept, with 30 business groups vying for attention, funding, and customers. Incentives were related to individual unit success, encouraging ruthless rivalry and hampering division collaboration. The company’s capacity to respond swiftly to shifting market conditions and unified threats was probably limited by a lack of coordination and isolated decision-making (Kinicki & Williams, 2016). As an example of the segmented structure’s competitive and non-collaborative culture, consider the reports of managers telling sales employees not to help customers in adjacent sectors and Lampert’s praise for such policies.
People
An integral part of the HRM is encouraging and facilitating worker participation in organizational decision-making. Employee disengagement and managerial apathy were evident at Sears. Due to the company’s focus on cost-cutting, the lack of attention paid to store maintenance, and limited prospects for advancement, employees may have felt underappreciated (Kinicki & Williams, 2016). Since morale and output were already low, this probably made things worse. Supporting evidence includes Lampert’s disinterest in running the business and claims of a toxic work environment filled with disgruntled employees.
Technology
A strong physical retail presence may have been sacrificed in Lampert’s strategy, with a concentration on technology, especially the emphasis on Sears’ website and online presence (Kinicki & Williams, 2016). While it is essential for Sears to invest in technology, the company may have lost customers if it had instead focused on improving the quality of the shopping experience in its physical shops (Datta, 2022). Evidence suggests that Sears is not prioritizing the integration of technology into the consumer experience, as evidenced by the store’s deteriorating appearance and chronic underinvestment in upkeep.
Environment
The retail sector was fast changing, with the rise of internet shopping and e-commerce giants like Amazon. However, Sears failed to fully adapt to this shifting market, primarily due to the growing focus on low pricing, convenience, and a seamless customer experience that internet merchants delivered (Kinicki & Williams, 2016). Supporting evidence, the revenue decline at Sears and the expansion of rivals like Walmart and Amazon during the same period underscore the shifting market dynamics that Sears struggled to navigate successfully.
References
Bienenstock, J., Fitzgerald, R., Glasser, M., Kim, K., & Altman, E. (2019). The downfall of Sears.
Datta, P. M. (2022). Digital transformation in a globalized world. In global technology management 4.0: Concepts and cases for managing in the 4th industrial revolution (pp. 227–260). Cham: Springer International Publishing.
Kinicki, A., & Williams, B (2016) ‘The decline of Sears’, in B Williams (ed.) Management : A Practical Introduction. 7th edn. New York: McGraw-Hill Irwin, pp. 73–74.