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Value Driven Management: Publix Supermarket Report (Assessment)


Introduction

Competition has increased and this has forced managers to look for innovative ways of enhancing competitiveness of organizations. There is a general trend of change in management and leadership from simple leadership to more complicated leaderships.

This change has been prompted by changes in the business environment and increased competition. The environment in which businesses now operate in are quite complex and this requires more than a single minded approach (Porter, 1985).

Managers in organizations have been searching for ways to beat survive in the complex business environment and to cope with the increased competition. Multidimensional and non-integrated approaches to management have come up and they are more preferred to the single minded approach.

Evolutions of styles of management progressed from the basic management that simply comprised of planning, organizing, directing, staffing and coordinating to behavioral management to management by objectives (MBOs) to Total Quality Management (TQM) to excellent companies approach to business re-engineering just to mention but a few (Porter, 1985).

Value Driven Management

The new approach is the Value Driven Management (VDM) which provides a more holistic approach to management (Pohlman & Gardiner, 2000). The concept behind this method is that whenever employees have to make decisions in an organization, they must consider the impact of the decisions on the impact of the organization. Employees must therefore have an understanding of the facets of values of the organization.

Cohen & Warwick( 2006) points out that “these facets or sets of values are developing world culture, national cultures and subcultures, organizational culture, value of employees, suppliers, customers, competitors and third parties and then the owners of the business employees” (p.87). All employees in an organization must be leaders and they must work hard to maximize value of the organization over time.

Value Driven management is thus a leadership style that takes a multidimensional approach to the organization. It involves considering the effects of an action to the value of an organization from the perspective of different groups. It is important to note that Value Driven Management does not replace other management styles but seeks to work together with them.

There are several assumptions behind the Value Driven Method. These are the suppositions that formation of value or worth is imperative to the institute; “what are valued-driven action and that value creation and appropriate use leads to value creation” (Cohen & Warwick, 2006, p. 97).

The other assumptions are that value is subjective; there are value adders and destroyers; markets provide basic information; opportunity costs affect value; order is spontaneous; values can compete or be complementary; for every action there are unintended consequences and all employees are employees.

All employees must understand the eight faces well and apply them in every decision they make (Pohlman & Gardiner, 2000). These will be discussed later in the paper.

Publix Supermarkets Inc.

Public Supermarkets Inc is a privately held retail outlet owned by employees. It was started in 1930 by George Jenkins and in 2010 it was ranked as one of the top 100 Best Companies to Work for by the fortune magazine. The Company operates in several states in the U.S. such as Alabama, Florida, Georgia, and South Carolina among others.

The main products for the company are dairy products, frozen foods, pharmacy, produce, seafood, general grocery, lottery tickets and others. The company operates in the food sector of retail industry in America. The retail industry is one of the core industries to the economy of the country. A third of America’s GDP is generated from the retail industry. It is thus a very profitable but a competitive industry (Publix Supermarkets Inc., 2011).

Publix supermarkets Inc has been successful over the past by all standards. The company has been ranked as one of the best to work for, its revenues and sales are high and the company has generally been able to take care of its stakeholders.

It has been therefore selected as a case study to see how value driven management has been applied in the company and to give recommendations on best practices regarding Value Driven Method. The case study ill be based on the productivity audit for the company (Publix Supermarkets Inc., 2011).

General Statement of Results

After the audit of productivity in Publix Supermarkets Inc., the overall impression is that the company scores low in productivity management. There are a lot of issues that need to be addressed in order to enhance productivity and efficient in the management. The policies, staffing, work procedures, inputs, leadership, performance, technology and objectives of the company are wanting and they need to be improved on.

The company uses the traditional management style which is characterized on a highly centralized control and decision making. Much focus of the production is on quantity and not quality and there is more of collective responsibility than individual responsibility.

Asset management in the organization needs improvement. Employees are not well trained and this affects productivity of the company. There are so many wastes and non-value adding activities in the organization (Porter, 1985). A general conclusion is that the company needs to change its approach to productivity management.

Analysis of the Audit

Policy

This section seeks to understand the process of policy formulation and implementation in an organization. There are several aspects about policy that has to be audited for an organization. According to the audit of the Publix Supermarkets Inc., it was found that the company does not have a productivity mission statement that has been issued to all employees and that has been prioritized by the top management.

The Company uses only the overall mission statement of the company. The overall mission statement has an aspect of productivity mission statement since it reads that the company would like to be the premier quality food retailer in the world, committed to maximizing customer value and responsibility.

The audit revealed that managers are required to submit their productivity plans that are incorporated to the organization-wide productivity plan. This was specifically applied to managers in the manufacturing divisions of the company. The productivity results are not however formally evaluated at least twice a year.

All employees are not involved in decision-making about their own related jobs. The audit revealed that all departments or cost centers practice productivity improvement. The organization power structure for Publix Supermarkets Inc. does not include all the necessary functions for productivity and each employee is not held responsible for the productivity efforts that have been delegated to him.

From the audit of policy formulation and implementation, it is clear that a lot need to be done on policy formulation and implementation. Employees are not incorporated in policy formulation and there are not clear productivity plans. Productivity reports are not regularly reviewed (Pohlman & Gardiner, 2000).

Leadership

An audit on the leadership of Publix Supermarkets Inc. reveled that the leaders in the company do not approach productivity improvements in an action based research manner with an emphasis on team work. The leaders however require a balanced effort from all work units.

The leaders do not operate a system that promotes and implements work improvement innovations from all levels of employees. The leaders foster competition around productivity rather than among personalities. The leaders do not utilize information from productivity audits. They however encourage research and development and they require annual productivity reports to e presented to them.

It is clear that the leadership in the company is not effective. It is a traditional management style which focuses on basic issues and overlooks the complexity of the business environment. With the competition and increased complexity the management of Publix Supermarkets Inc needs to change its leadership style (Cohen & Warwick, 2006).

Objective

According to the audit of the objectives in the organization, it was found out that all the managers have specific measurable productivity objectives. The productivity objectives are in line with the organizational goals and purposes. All the employees are not fully aware of their work unit’s productivity objectives.

The productivity objectives are not sufficiently challenging and attainable. The productivity course of action can be appropriately monitored to solve problems that occur and there is a reporting system that identifies variances from productivity objectives.

The audit on productivity objectives reveals that the organization has productivity objectives. These objectives are not however understood by the employees and they are not attainable and challenging enough. This therefore calls for improvement (Pohlman & Gardiner, 2000).

Inputs

It was found out that all the resources used are not identified in cost center budgets and each employee’s time input does not reflect a 100% contribution to organizational input. The organization’s information system does not monitor human and material resource utilization and all the resources are not available in a timely fashion so that schedules can be adhered to.

The quality of input is not consistent with the quality of output. Each work unit does not have a control over its own budget formulation. Job specifications are not clearly and precisely defined.

There is poor management in terms of inputs of production in the organization. The budgeting is highly centralized and each work units is not responsible for developing their own budgets.

There is no clear job specification and definition and this leads to a lot of wastage and redundancy in duties and operations. This therefore needs a lot of improvement (Cohen & Warwick, 2006).

Performance

All the levels of employees are not completely trained in job tasks that they are expected to perform. The standards for employee work performance are not specific, measurable and realistic.

Employees in Publix Supermarkets Inc. do not have control over the resources that are necessary to meet the required levels of performance and the team performance measures are not identified in each work unit. Productivity is not measured by resource utilization levels in each work unit. The performance results are a key productivity measure for each work unit in the organization.

The above shows that the organization has failed in management of performance. Employees do not control the inputs for their performance despite the fact that performance results are a key measure of productivity for each work unit. The organization should therefore work on its measure for performance and the methods to enhance performance of the organization (Cohen & Warwick, 2006).

Technology

The other audit was into the technology of the company. It revealed that expenditures for new technology in Publix Supermarkets Inc. are cost justifiable by proposed productivity improvement data. The scheduling of machine usage does not reflect maximum concern for productivity and work units are not totally responsible for their own equipment expenditures and utilization.

Long term considerations in the company override short range benefits in some cases. The technology in place in Publix Supermarkets Inc. is the latest available technology given the budgetary constraints but technology that maximizes on productivity is not utilized by the employees all the time.

The company has embraced technology in it operations. However, there are challenges into the use of technology. There is lack of expertise and most employees do not know how to use the technology productively.

Scheduling of machine hours does not reflect productivity of the company and this means that there is a lot of wastage. This is an area that needs improvement in order to enhance productivity in Publix Supermarkets Inc (Cohen & Warwick, 2006).

Work Procedures

The product or service quality is not maintained as level of productivity increases. There are variances in the quality of products and services according to different levels. Security and safety procedures have a positive effect on productivity. Time wasting operations are not systematically eliminated.

There are quality checks for automated procedures in the organization. The employees are not allowed to change work methods that have an adverse effect on productivity and method analysis is not conducted on an annual basis. The relationship between man and machine arrangement does not enhance maximum productivity since the employees are not well trained to use the machines (Pohlman & Gardiner, 2000).

Staff

The people hired in Publix Supermarkets Inc. do not have productivity awareness and skills. All levels in the organization are not committed to productivity and their actions do not reflect their concern for productivity. All employees do not strive to be up to date in knowledge and skills.

The employees are properly rewarded for productivity improvement whenever data justifies it. The communication system in the organization openly supports and recognizes productivity improvement efforts. The supervisors and managers are not properly trained to coach others for increased productivity skill and ability.

The organization of the staff of Publix Supermarkets Inc. is in such a way that it does not support productivity. The employees do not appreciate issues of productivity and their actions are not aimed towards enhancing productivity.

Employees do not have the required skills. This would create a problem in trying to enhance value addition. The organization has attempted to award productivity but this has not created a positive culture among the employees (Pohlman & Gardiner, 2000).

Recommendations

From the analysis of the audit into the productivity of the company, I recommend that the company change its approach to the productivity management. The management seems not to appreciate the fact that there is a lot of complexity in the environment and this needs a multidimensional approach (Porter, 1985). The company has not adopted any policy regarding productivity management and this is very dangerous to its performance.

I highly recommend to the Publix Supermarkets Inc. formulation of a productivity policy. This policy will be the roadmap to the company in enhancing value addition and eliminating wastage in the business activities. This is the starting point for value addition management.

The company should incorporate evaluation of it productivity results at least once every year. This will enhance corrective action and put a great emphasis on productivity approach. A culture of employee responsibility should be encouraged and the employees should be incorporated in the productivity policy formulation and implementation. This will create a sense of ownership to the productivity mission and commitment (Cohen & Warwick, 2006).

The organization should put more emphasis on team work and it should put a system in place that promotes employee innovation. Information from audit results should be utilized in order to improve on the leadership of the company. Communication in the Publix Supermarkets Inc should be enhanced.

Employees at all levels should be aware of the productivity objective and these objectives should be high enough to challenge the employees. The objectives should however be attainable in order to avoid frustrations (Pohlman & Gardiner, 2000).

A lot of improvement needs to be done in the management of inputs of the organization. Materials should be availed in time to avoid delays and each unit should have control over its budgets. This will ensure that the units have a sense of responsibility. Jobs should be defined clearly to avoid redundancy and all the resources in the organization should be identified in their cost center budgets.

The performance of the employees and units should be measured by specific standards which are realistic and objective. Employees should have control over the resources that affect their performance (Pohlman & Gardiner, 2000).

The technology in the company should be aligned with the personnel available. The company should ensure that it has the required personnel to match the technology it has. Time wastage and delays in the procedures should be eliminated in order to enhance value addition.

The relationship between man and machines should be improved to ensure that there is efficiency. An analysis on the procedures in the organization should be conducted on an annual basis in order to recognize wastes and remove them. Staffing in Publix Supermarkets Inc. should be reviewed to ensure that employees have productivity awareness and skills to improve on it.

Employees at all levels should be committed to enhancing productivity and they should attend seminars in order to remain up to date. Managers and supervisors should be trained in productivity so that they will be able to help the employees (Cohen & Warwick, 2006).

Value Facet Analysis

This section analyses the recommendations above using the eight facets of value driven management. The top recommendation is to the Publix Supermarkets Inc. is adoption of a productivity based approach in the operations. This would entail changes in different areas of operation of the organization. This would enhance value addition to the organization and it will go a long way to enhance efficiency.

The organization should appreciate the first facet of value driven management which is cultures external to the environment. The managers should appraise the fact that the employees come from different cultures which affect their performance. Therefore, in the development of the productivity approach in management should help employees to shed off negative culture and focus on positive culture that will enhance productivity (Pohlman & Gardiner, 2000).

The other facet is organizational culture. The recommendation is that the organization should develop an organization culture of responsibility and ownership. This will support the productivity approach to management and value addition will be enhanced.

Employees’ values should be changed in order to make the productivity of the organization operational. Positive values should be reinforced and negative employee values should be eliminated. The organization should recognize efforts of employees. This will ensure that employees are motivated and they have the right morals to work hard (Cohen & Warwick, 2006).

The recommendation above also has put into consideration the supplier’s values. For the recommendation to be operational, suppliers will play a big role. They will be required to avail the supplies without delays. The Publix Supermarkets Inc should therefore seek to support their suppliers.

Customer values are also of great important to the recommendations for Publix Supermarkets Inc. Elimination of wastage in the production process, enhancing value addition and other recommendations are aimed at taking care of the customers values (Cohen & Warwick, 2006). Customers are important factors of success to an organization.

The recommendations will also take care of the third party values. The third parties include trade unions, the government and the general public (Pohlman & Gardiner, 2000). Adoption of a productivity policy will incorporate corporate social responsibility and responsibility to third parties.

This is because the success of Publix Supermarkets Inc depends on its image to the outside world. Competitor values and owner’s values are also taken into consideration in the recommendations. The recommendations aim at achieving ethics in competition and fairness. The recommendations will also enhance maximization of shareholder value to the organization and this will take care of the owner’s values.

From the above analysis of the recommendations to Publix Supermarkets Inc using the eight facets of value driven management, the recommendations are significant enough to operationalize the value driven management approach in the organization. The company should therefore adopt the new recommendations since they will enhance a multi-dimensional approach to management and this will enhance competition (Cohen & Warwick, 2006).

Conclusion

A value driven approach is the new approach to management and definitely not the last to be realized. This method is important to the success of an organization and if well implemented, it would enhance performance and general success of an organization. This approach is multi-dimensional and it ensures that all the stakeholders review the impact of their actions to an organization.

The audit into the productivity of Publix Supermarkets Inc reveals that the company does not have a clear policy on productivity and value addition. Various recommendations are thus made to the organization to ensure that it takes into consideration issues of productivity in its operations.

The recommendations are in line with the eight facets of value driven management and they will ensure that the organization remains competitive. The complexity in business environment requires that organizations review their management approach in order to stay ahead of competition. Value driven management is thus highly recommended to Publix Supermarkets Inc (Cohen & Warwick, 2006).

References

Cohen, B. & Warwick, M. (2006). Values-driven business: How to change the world, makes money, and have fun. San Francisco, SF: Berrett-Koehler Publishers.

Pohlman, R. & Gardiner, G. (2000). Value driven management: How to create and maximize value over time for organizational success. New York, NY: AMACOM Div American Mgmt Assn.

Porter, M.E. (1985). Competitive advantage: Creating and sustaining superior performance. New York, NY: The Free Press.

Publix Supermarkets Inc. (2011).Publix Supermarkets. Retrieved from

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