The Organizational Issues That Lead to the Economic Decline of Sears

...

First, Sears offers a vision which is non-inclusive to employees and largely focuses on the customer. The company motto, an organizational artifact, asserts that Sears is a “compelling place to work, compelling place to shop, compelling place to shop” (Steven P. Kirn 2012). The fact that “compelling place to shop” is repeated further illustrates Sears’ enacted values; the organization is profit oriented and facilitates weak organizational culture. The company motto should be looked at as encouraging for employees and provides intrinsic motivation. Sears’ clear method of extrinsically motivating their employees contributes to the weak organizational culture.

Second, weak organizational culture is further perpetuated through Lambert’s reluctance to adopt change in the modern commercial environment. The rise in e-commerce trends has become the main competition for department stores such as Sears. Many at Sears have expressed the need for innovation online and would be ready for updates to respond to the competitive and evolving trend, however, the CEO remains focused on his profit oriented agenda (Intelligence 2016). In regards to organizational culture, it is clear that the leader and followers visions are not aligned, as well as, proves that the feedback channels at Sears are not open. Both these result in dissatisfied employees and solutions should be seriously considered.

Third, Sears’ stores are outdated and in poor condition (Peterson 2016). They do not measure up to the “wow” standard Sears claim to hold and further dissatisfied employees, directly contributing to their lack of motivation (Mello 2010). Eddie Lambert constantly rejects proposals to improve the interiors of stores as he does not consider them profitable. These three factors combined with the CEO’s profit oriented values promote a weak organization culture resulting in a lack of motivation among employees and a negative attitude towards work. Recommended Solutions

The problem of Edward Lampert’s vision is very difficult to resolve, because it is an organizational level problem, along with an individual level issue as he bases his decisions on personal gains, without accepting any form of feedback from the other members. To put Sears back on track, the CEO would have to change his entire vision of what type of value is the company supposed to deliver. Lampert had a brilliant career as a hedge fund manager, leading him to be victim of an overconfidence bias, automatically silences those who do not support his point of view (Allison, 2016). It would be extremely difficult to change Lampert’s perspective, given that, by extending a $300 million loan on the company to pursue the same goal, he is also a victim to the sunk cost fallacy by which he is “throwing good money after bad” (Song, 2016). The solution to this issue does not lie in appointing a new CEO, but rather making Lampert more concerned with the situation of the company, and not just the economic value of the firm. For this, a meeting with the managers of every store in the US should be organized, so that they can expose the facts in a direct way, expressing their feelings and concerns about the future of the company.

If the top management has problems with the job engagement dimension, the results will be disastrous at lower levels of the company, and this closeness with the lower levels could make him review his position (Song, 2016). On a corporate level, Sears should focus on the merchandising and retail industry that built its reputation to gain back its customer-service identity. Eliminating levels between the CEO and lower levels would help establish a more effective bottom up communication, as well as an alignment of the policies based on the company’s vision. The only way to achieve these recommended goals would be to radically change Eddie Lampert’s leadership style by going from a more transactional leader, focused on communicating expectations and rewarding those that attain them, to a transformational one, leading the employees to feel part of a team and be inspired by a real vision, not just the desperate pursuit of profit (Song, 2016). This would not require Lampert to radically change his style, as the transformational style takes on the elements of the transactional one, but rather to identify a vision that he would like to transmit in order to make employees achieve his goals, not just tell them what is expected. Lampert should adopt a more strategic leadership style as well. By anticipating what his competitors will do and considering all possible solutions to a problem, Sears will be able to develop a better understanding of the root of the problem and can then implement the best solution.

In reference to the communication issues present within Sears, a strong communication channel needs to be established. Firstly, Sears needs to adopt a Transactional Model of Communication. In this model, the sender and receiver are constantly switching roles and, therefore, increasing feedback between the upper and lower levels of the organization (Song, 2016). The issue of communication that Sears faces is a direct result of the lack of communication from both upper to lower and lower to upper levels. Although executives cannot communicate with each employee individually, they should communicate with each store or district manager. By enforcing the interactive model, a bottom-up communication channel will be established whereby Sears’ upper levels of management will receive constant feedback and suggestions from the individuals who see the problems first hand. In addition, by directing their messages and encoding them specifically for the lower levels of the organization, employees and managers will be able to properly enact executive decisions and reach corporate goals. Clearly communicating the goal will increase motivation and performance.

Secondly, increasing task significance and helping employees feel as though they play a vital role in achieving Sears’ goals will increase employee motivation and cause their desire to improve the organization’s productivity and performance. Sears can do so by keeping employees up-to-date with company changes, progress and future plans in a bi-monthly newsletter or in company meetings. Employees are more likely to communicate well when they feel they have a part in where the company is headed.

Lastly, Sears should apply the Goal Setting theory. Giving the employees the opportunity of being part of the decision-making process and assigning their goals will not only motivate them but it will also create strong ties in between managers and employees. The goals should be clear and measurable, challenging and complex with a clear channel for feedback (Song, 2016). By setting complex and effective goals, employees will feel