What you talkin’ about Willis?

In our class we talked about different operations management strategies to help businesses be more efficient and improve overall performance. Most of the concepts seem to be simple to implement and are common sense, thats why it is hard for me to belive that some managers and/or CEO’s can make such bad management decisions that they can destroy giants such as Goldblatts, Woolworth, and now Sears. Over the course of the last decade leading up to the failure of the now Sears Holdings Corporation, there are several factors that can account for the steep decline of this once retail superpower. Next to the obvious culprit, the economic downturn, there is also Sears’ failure to adapt to changing markets and its failure to modernize its marketing strategies. Since 2009, Sears has made significant changes to its marketing strategies in an effort to make up for lost ground but it may be too little too late. The economic recession has hurt the retail industry as a whole, but the negative effects have been even more devastating for the already struggling Sears. Edward Lampert, who purchased the company in 2004, was thought to have been the answer to Sears’ woes. But according to Zac Bissonnete, “[Lampert’s] rigid focus on financial metrics, while putting aside… branding and marketing” may have perpetuated Sears failure. Lampert’s move to merge Sears and Kmart was once hailed as genius but continuing declines in both stores have proved otherwise. Lampert may need to cut his losses with Kmart and focus on rebuilding Sears. As one analyst notes, “Turning around one troubled brand is tough. Turning around two in the same category is impossible.” Edward lampert was supposed to turn things around at Sears but either he is purposely driving Sears to the ground or he is really daft. Either way he could stand to take an Operations Management class at DePaul. Sears was once a store that differentiated itself from its competition by selling brands that were exclusive to its stores. But, in an effort to be more like its competitors, Sears changed its strategy, which hindered sales. In 2008, Jack Trout notes that “people went to Sears to buy Kenmore appliances, Craftsman tools, and DieHard batteries… In recent years though there hasn’t been much in the way of brand building coming out of Sears.” Now consumers can go to Wal-Mart, Home Depot, or online and get the same products for the same price, if not cheaper.
In the Washington Times article by Andrea Billups, customers speak fondly of the inexpensive, trendy clothing they were able to purchase at Sears. The article goes on to say, though, that this is not the general opinion of Sears. They claim that other brands like Target were more successful in making buying cheap chic by partnering with popular designers. One final problem Sears has faced is with the brand itself as a product. As mentioned earlier, Sears does not make an effort to keep its stores updated and the shopping experience itself is not special. At a time when competitors like Target and Wal-Mart work to make bargain shopping an experience, Sears has dropped the ball. Its sad that all it would have taken to save Sears is attention to its operations to keep the retail giant alive but now instead we are about to witness the disappearance of another great Chicago business and look at at skyline that features the Willis Tower.

Full Time Dilemma

Have you ever worked for an employer that allowed you to work almost enough hours to be considered full time but not enough hours to receive full time benefits? I haven’t, but I can imagine how frustrating that can be, especially if you are married and have children. I recently read an article that indicated that there is a growing trend of companies hiring more contractors versus traditional full-time workers to avoid paying for full time benefits in an effort to cut costs. The article made me think about whether or not this practice violates some ethical principle or if it is just smart business.

I used to work as a recruiting manager for a firm. When I began to work I was told that I had up to 400 hours per week to use for my staff (which I had to hire). I was also told that the general practice was to hire 10 full-time staff members to help me run my operations but I had the freedom to split up those hours however I saw fit. After creating my plan, I determined that my operations would be most efficient if I hired 24 part-time workers instead (12 would work 20 hrs per week each and 12 would work 10 hours per week each). As my operations progressed and I was alloted more hours per week I first rewarded my most efficient workers with more hours then I hired more staff and split the time as I deemed necessary. My entire operation was supposed to take one year; I finished in 7 months and under budget. I also want to mention that my entire staff were contractors; even if they worked full time their contracts specified that they were “intermittent temporary part-time employees” and as such would not be eligible for benefits.

Even though in this particular case full-time benefits weren’t a weighted issue I began to question whether or not I would have done the same thing if full-time benefits were at stake. After much thought I decided that I would in fact have made the same command decision for the sake of the operation.

I think it also important to note though that given the current state of the economy most bussinesses are at an advantage when it comes to selecting employees and determining pay/benefits because people just need work and are willing to accept anything rather than have nothing. This is where I think some companies may be simply taking advantage of workers. I think that there is a difference between cutting costs for efficiency sake and cutting costs for selfish profit.

I might be wrong; maybe it is all about the money and exploiting workers’ desperation isn’t as bad as it sounds. But what do you think? Is cutting costs by denying workers full-time benefits a violation of ethical principles or is it just smart business?

This is the link to the article I was referring to: