Questions Given

Student’s Name
Instructor’s Name
Course
Date
Whole Foods
1.
Labor Factors
Karakowsky and Guriel (6) argue that economies and societies are greatly influenced by the organization of work. There is, therefore, need to attract and hire the most qualified workers who will hold the organization’s goals and values and always work towards its best interests (Karakowsky 6). At many times, however, there is usually a crash of interests, with the business focusing on maximizing its profits and the employees focusing on income maximization. Unless the two interests balance in the organization, there is a risk of not achieving the interests of the workers as well as that of the organization. Whole Foods, in its dedication to making the society and environment better, had always been involved in spreading healthy eating habits in the nearby communities (Aaker Npag). This plan was beneficial to both parties in that it created more job opportunities in the communities as more people would be involved in the educational programs in addition to selling in the various stores. The business would also benefit greatly in that the arrangement would ensure a consistently pleasant experience, ongoing innovation, and continuous value-based execution (Aaker Npag).
Political Factors
This is to what extent and how the government controls the market, industry, and economy in general. This is usually through trade restrictions, environmental law, labor law, political stability, tax policy, foreign trade policy, and other government policy.

The company may have been affected by these factors bearing in mind that the company operated in the US, Canada, and U.K (Freschi, Npag). It was, therefore, subjected to different tax tariffs as well as government policies.
Economic Factors
These usually include the level of disposable income, inflation, exchange rates, interest rates, and the rate of economic growth. All these factors usually have a great impact on the profitability of companies and how they do business. The various factors that may have impacted on Whole Foods include changes in household incomes. Lack of growth in household incomes had a great negative impact on the firm as customers could not spend much on its products which were already too expansive. Though many people believed that Whole Foods’ products were healthier, they had to go for the products that were more affordable. This could be seen from the fact that Simple Truth, a competitor in the foods and groceries market made a whopping $1.7 billion in sales in 2016 when Whole Foods sales had greatly slumped (Halzack Npag). The acquisition of the company by Amazon, therefore, had to be accompanied by various changes to reverse the negative trend. These changes included the switch to Amazon prime as the new customer reward program, price cuts, and the incorporation of technology in all the food stores (Taylor Npag). These changes were necessary because the company had in its last days faced intense pressure from a section of the shareholders to determine how it would stop customers’ exodus to stores with lower-priced foods to improve its financial results (Pisani Npag).
Societal Factors
These usually include age distribution, career attitudes, health consciousness, and population growth. They are usually crucial to the business as they determine customers’ needs and wants. According to Karakowsky and Guriel (6), social responsibility is the belief that organizations should balance their desire to make more profits with various undertakings to benefit the society. Businesses, therefore, need to take in consideration societal expectations and needs to prosper. The company’s motto is “Whole Foods, Whole People, Whole Planet” (Freschi Npag). The company was not just a food retailer that aimed at making profits, their vision entailed customer satisfaction, improvement in the environmental state, Team Member happiness, and support to the local community. Whole Foods believed it had a responsibility to shareholders, producer communities, customers, suppliers, and everybody that was part of their business (Freshchi Npag). The company’s activities in highlighting the need for being health conscious helped many starts moving towards organic foods which led to more customers and profits over the years.
However, with time convenience took the upper hand over the need for organic products. Many shoppers now prefer to get regular groceries and other foods in addition to the organic groceries in one location. The customers, for example, would like to get cage-free eggs in addition to unbleached paper towels or Coca-Cola in addition to their grass-fed beef (Halzack Npag). Having to move from Whole foods store to other stores in search for other commodities did not, therefore, go well with many customers leading to the rise in Walmart, Target, and Simple Truth stores and the fall of Whole Foods.
Technological Factors
Technology usually has a great impact on businesses in that it determines new distribution channels, new production methods, and new communication channels. The craze for technology has affected nearly all industries. The grocery and foods industry has therefore not been left behind. Three out of four consumers believe that more technology should be deployed in stores and will, therefore, visit stores that employ technology in the best way (Rigby Npag). 70% of customers also believe that companies are not doing the incorporation of technology in their operations in the right way and that according to them, what matters is technology that gest faster results, increases convenience, and saves them time (Rigby Npag). Whole Foods did not change with the times to incorporate this attitude in their practices by for example adding online sales. This made it lose out to companies like Walmart and many more.
Sustainability Factors
These are the factors that normally determine the sustainability and ethical standards of companies. The issue here includes pollution, the availability and types of raw materials, and various regulations set by the government concerning the environment. Whole Foods did not have an issue with environmental factors as it was the leader in environmental stability in the grocery industry being a champion of organic and natural foods. The company not only believed in a healthy lifestyle but also in care for the environment and planet as a whole. The company may, however, have been impacted by the climate change that has been occurring in the last few years as this may have led to low organic foods yields.
Global Factors
A company wishing to expand n to various regions of the World usually faces various hurdles and significant competition from other firms in the region. The company, for example, had to be subjected to different taxes in the various regions in which it operated. Other companies that also had a global outlook were fiercely competing against the company. The Whole Foods Market had always believed in the stocking of only organic and natural foods. Such foods may not contain certain ingredients which mean that they do not stock many familiar brands such as Coca-Cola. This greatly impacted on the company’s profits in that many customers who did not see the need to move to Whole Foods for their organic supply then to another store for other products stopped going to Whole Foods all the same. Companies like Publix Super Markets. Kroger Co. and Wal-Mart stocked all these products (Halzack Npag). This threat may have led to the company’s downfall.
2.
The management philosophy most suited for Whole Foods is the behavioral school of management. The theory usually focusses on the human dimension of work rather than the quantity of work done as proposed by the classical school of thought. The theory holds that productivity is improved through a clear understanding of human behavior and attitudes such as group dynamics, conflict, expectations, and motivation. Employees are usually regarded as assets to be developed, individuals and resources. The values held by the company can only be achieved under a behavioral philosophy. The company’s motto is “Whole Foods, Whole People, Whole Planet” (Freschi Npag). The company was not just a food retailer that aimed at making profits, their vision entailed customer satisfaction, improvement in the environmental state, Team Member happiness, and support to the local community. With their emphasis on quality, the company believed in helping people increase their lifespan and live a quality life through the right food. The company taught people that their eating habits also impacted on the planet we lived in and that there was, therefore, need for eating the right food. The needs of each community were best achieved through increased autonomy in decision making as to what was the best for them. Whole Foods believed it had a responsibility to shareholders, producer communities, customers, suppliers, and everybody that was part of their business. The employees had to be highly motivated and with the desire to always do more than was required to realize the level of customer satisfaction needed by the company. The company built its business on teams, with each of its store having around eight to ten teams from departments such as prepared foods, meat and produce (Burkus Npag). There are also other teams that go up to the top of the chain of command. The Whole Foods may, therefore, be said to have forged a strong sense of community that was key to the high levels of output. The team approach reinforced each of the employee’s attention to performance. The approach also challenged and empowered the employees to be more innovative so that they could improve the various stores and company in general. While in a group where other people are contributing ideas on what is good for the company, you will also be challenged to give your point so as not to appear as a joyrider. The encouragement received from the other members also help each of the employees to feel like a part of the company. Each of them will therefore always strive to realize the best results for the organization. The teams also reinforced trust within the organization. This is the best way to push the company forward rather than relying on the input of a few geniuses that have been given senior positions.
The company mainly focused on collaboration and competition within the self-directed teams for maximum output. The teams often met to solve various problems and here the input of different members. Each of the team had some leaders who were members of the Store Leadership Team. These were also in the Regional Leadership Team. This went all the way to the C.E.O who was also part of a team (Burkus Npag). The teams competed against themselves in the implementation of their production and sales targets and visions. They could measure and compare each of the other team’s results. The positive competition may have had positive implications for the company in that each of the team was always hoping and working to outdo the rest in realized profits, sales, production, and customer satisfaction which lead to more favorable results in each of these areas. The teams however shared information on the best way to realize their targets, they were not just in competition. The teams also approved new employment in the organization. After store leaders screened potential employees, they would refer them to a team where they would require a two-thirds majority vote to be an employee after completing a trial period (Burkus Npag). The teams were crucial to the operations, often meeting to come up with better ways of running the business. The group structure helps each person feel like a vital and important part of the team.
Employee empowerment was part of the company’s goals. With the highly decentralized structure where the team is the basic unit, decision power was available to every employee which means there is no ordering around from the senior management on what should be done. The different teams such as prepared foods, meat and seafood, bakery, cashiers, fruits and vegetables, bakery, and grocery had the power to decide what was good for them, the store, and organization in general. Each employee was, therefore, an asset and a great resource to the organization, not a tool to be used to realize the company’s goals. The group structure was based on the belief that employees do not have to be directed now and then to do their work, of empowered and made to feel like part of the company, they would always do more than was expected.
3.
a).
The hierarchical/traditional organization structure is one in which power is exerted vertically and upward, and the various employees are categorized into different departments. There is usually a chain of command to which they have to adhere. The manager or CEO usually coordinate all the departments to ensure that everything runs smoothly. Various departmental heads also report to the managers. The goals and strategies for each department are usually set annually by people in various senior management positions and are usually hard to change. Each department also has a set of regulations and rules, and every employee is accountable to his superior.
Modern organizations, on the other hand, are those that are designed for rapid innovation and expansion into various regions of the World. These organizations are built on human capacity rather than the type of work done. They, therefore, depend on a clear understanding of the employees’ needs, establishment of good relationships and consensus building among other factors. Employees are therefore more involved in the organization’s management. Goals are not set annually or semi-annually but rather can frequently be set depending on the changing consumer needs and market.
It would not be easy to say whether Amazon is a traditional bureaucracy or a modern organization as it seems to incorporate the characteristics of both structures. The various characteristics of traditional bureaucracy in the company include a tall/hierarchical structure and rule oriented. The company is hierarchical as the senior management team is composed of a Worldwide controller, two CEOs, and three Vice Presidents (CrunchBase Npag). These report directly to Jeff Bezos, the founder, and CEO. There are also various segments like the legal operations, information technology, marketing, and human resources among others. These are headed by segment heads who also have to report to Bezos. The structure is crucial to the running of the business due to its large size as the company handles the bulk of all online sales in the USA. All employees have to follow the rules and instructions given by the segment heads, supervisors and other management staff to realize company targets and objectives. The employees’ input into the organization regarding ideas is quite minimal; what is proposed by the managers is what should be followed. The company, however, has various modern organization characteristics such as global and integrated perspectives. The company is in various countries and regions in the World, not the US alone. It is also responsive to changes in the industry and markets, unlike other bureaucratic companies. After lowering the prices for Whole Foods product, for example, the company began the roll-out of a loyalty program, the $99-a-year Prime program where customers could get discounts at various food stores. The company would also add lockers in various locations to prevent shoppers from needing to move to the food stores (Pisani, Npag).
b).
The functional organizational structure is one of the most common structures. It usually emphasizes business functions and activities rather than employee behavior and attitudes as the driver of growth in the organization. In this organization, employees are grouped into various categories based on their tasks and roles in the organization. They also enjoy a high level of bureaucracy that makes it hard to respond quickly to various changes in customer needs and the market. There are well-established lines of management, with each employee aware of whom to respond. They mostly operate in stable environments where dynamism is not a major issue to the business. The major problem with this structure is that it reduces job satisfaction in that one is always engaging in the same thing and following rules and directions all the time and due to the feelings of alienation (Shepard, 207).
Social structures, on the other hand, are based on the belief that the only way to ensure maximum productivity in the organization is by ensuring the social needs of the employees are met. The organization, therefore, strives to cultivate a positive attitude towards the organization from the employees. Instead of hierarchical decision making, the employees are empowered to make decisions that are beneficial to the organization and everybody in the organization. This mainly works through teams where the employees meet to discuss and come up with best alternatives and goals to drive the organization forward.
The company, therefore, has a functional structure. Amazon has various geographical divisions, a global hierarchy, and global function-based groups which ensure that operations run as smoothly as possible. Concerning geographic divisions, the company puts into consideration the economic conditions of various regions where it operates in to plan and manage operations. The business of each region is then coordinated through various heads. This enables the company to handle issues of the various regions in the best way bearing in mind that they have different characteristics.
The company also has a global hierarchy where directives are passed from the highest levels of management to the employees with no management positions all over the World. The organization intends to ensure that the CEO and other managers drive growth through their leadership. Employees just have to follow what is directed to realize profits in the organization. The company also has various departments where various employees lie thanks to its large size of business. Employees are involved in various tasks such as package sorting, warehousing, and transportation, with the company having acquired its truck-trailers and airplanes to transport cargo to various customer locations.
c).
The organization structure is mechanic. This is because there is centralized decision making. There is a Worldwide controller, two CEOs, and three Vice Presidents all who report directly to Jeff Bezos, the founder, and CEO. There are also various segments like the legal operations, information technology, marketing, and human resources among others that are headed by segment heads. The span of control is narrow as the rest of the employees have minimal say on how the company should be run and what is best for it, they just have to take orders and do what is assigned to them. These employees are usually assigned small tasks such as the unloading, loading of goods, and transportation among other tasks.
4.
Whole Foods company was using the Differentiation business level strategy before acquisition by Amazon. This strategy usually informs the provision of value to customers through various unique characteristics and features rather than through offering a cheap product or service. It must be noted that as per this strategy, customer satisfaction takes precedence over profits. This is mainly done through product innovation, high customer-service, and high-quality products or services. The concept is usually based on the belief that if many of you are selling the same product, you need to provide it differently if you need to maintain your customers as they may not see the need to maintain one shopping point as they can pick the same product elsewhere. A customer must therefore always feel welcome when shopping in the organization’s stores. Customers should also be made to feel that even if the products being sold by the company are almost similar to those sold by other organizations, there is something different with these particular products.
The company had always focused on improvement in the environment, team member happiness, and customer satisfaction. Whole Foods had mainly solidified its position in the food and grocery industry through its emphasis on quality, focusing only on organic and natural food. There were strict regulations on the standards of quality in the organization as the company didn’t stock just any kind of food; it had to be organic and natural. According to the company, its food was “fresh, wholesome, and safe to eat.” It, therefore, had to be completely free from hydrogenated fats, sweeteners, flavors, food colors, and artificial preservatives (Freschi, Npag). The major reason for the emphasis on natural, organic foods was to maintain the environment in local communities as well as the health of its customers. The company was therefore always considered as a lifestyle store, with its customers considering themselves as health-conscious people who shared the company’s dream in a sustainable future through caring for the planet.
Customer service was also a large part of the company’s operations with the stores making sure that their customers were as comfortable and satisfied as possible with their services. Employees were customer-friendly, always ready to see them happy by providing advice on usage, clarifying various issues regarding the products, and any other details. Customers could also get information and tips on the company’s website on the best foods to eat for a healthier lifestyle. The stores’ atmosphere also played a great part in ensuring customer satisfaction. Customers would never ask when they would be done with their shopping as the whole experience was quite a pleasant thing. Customers would enjoy such a cozy atmosphere while moving down the various rows of commodities, looking at the seemingly fresh veggies and fruits, the delicious ready-made foods, and the salad bars (Freschi, Npag). The store interior was also designed in a way to ensure maximum relaxation and happiness as it was characterized by wood and bright colors such as orange, yellow, and green. It was the perfect place to be.
This was the best strategy given the nature of the grocery and foods industry. It is usually very competitive considering that there is usually free market entry. The industry is also not quite capital intensive as compared to most of the industries as to start off as a small store; you only need to buy a little variety of fruits and foods that may be readily vailed able in the surrounding farms and neighborhood. One has, therefore, to be unique regarding the service and products offered if they have to make significant earnings. The emphasis on quality and customer experience at the time made the company to be the leader in the grocery and food industry, performing extremely well while the rest of the players were struggling. The company’s sales in the year 2013 were $12.9 billion, an increase of over $4 billion in 2009. The profits for the year were $883 million (Aaker, Npag).
The advantage of the strategy concerning the forces of competition is that differentiation normally increases the level of customer loyalty and therefore decreases the threat of substitutes. Brand loyalty also lowers the sensitivity of customers to prices, therefore, allowing the company to supply quality products without any worry. Differentiation also reduces buyer power in that they lacked a comparative advantage as regular stores have fewer options, with more expensive natural commodities. Due to the high margins, the company was also not affected by supplier power.
Works Cited
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Burkus, David. “Why Whole Foods Builds Its Entire Business On Teams.” Forbes.Com, 2016, https://www.forbes.com/sites/davidburkus/2016/06/08/why-whole-foods-build-their-entire-business-on-teams/#306479763fa1.
Cruchbase. “Amazon – Current Team.” Crunchbase, https://www.crunchbase.com/organization/amazon/current_employees/current_employees_image_list.
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