Trader Joe's Case
Case Study 1: Examining Emotions, Attitudes, and Job Satisfaction
Kirsten Farnham
Dr. McGrath
BUS-520: Leadership and Organizational Behavior
October 27, 2014
Trader Joe’s was a small convenience store chain in the 1950’s turned into the intimate grocery store chain it is known as today. Trader Joe’s founder, Joe Coulombe, after a visit to the Caribbean, decided to change his corner stores to a grocery store where customers can go to try new, hard to find products while still getting a great value and receiving amazing customer service (Trader Joe’s, 2014). The Trader Joe’s culture is lighthearted and customer oriented with a focus on employee nurturing creating a positive work environment, increased job satisfaction, employee development, …show more content…
and overall customer appreciation and fulfillment. Trader Joe’s is an excellent example of how positive organizational behavior can achieve a competitive advantage with a small product line, happy customers, and even happier employees. Trader Joe’s approach to promoting a positive work environment for its employees began with the founder, Coulombe.
He believed in an environment where customers enjoyed shopping and employees enjoyed working as if both the customer and the employee were on a vacation (Palmeri, 2008). Trader Joe’s increases job satisfaction and performance through a competitive compensation package, meaningful work, and an enjoyable work environment. Trader Joe’s places their focus on the employee because they believe “a happy employee makes for a happy customer and a happy customer will spend more and visit the store more often” (Lewis, 2005). The company offers more than fair compensation with benefits. Even part-time employees are able to earn health-care benefits. Additionally, the company almost exclusively promotes within. At Trader Joe’s “the crew”, or the employees, are encouraged to multitask without regard to their job description. They are also empowered to make their own decisions about store operations such as in store displays (Lewis, 2005). Trader Joe’s also provides excellent training programs through Trader Joe’s University to help employees cultivate their leadership skills. Finally, Trader Joe’s boasts an informal work environment such wearing Hawaiian shirts and calling co-workers “mates” and supervisors “captains”. This creates a collaborative work environment in which the staff feels part of a team, but also free to be themselves (Lewis, …show more content…
2005). Most effective businesses use the management process of planning, organizing, leading, and controlling to create an effective work environment and successful leaders within their company. Trader Joe’s does exactly this. Starting with employee recruitment, Trader Joe’s seeks out individuals that are fun spirited, friendly with strong values, customer-oriented, and ambitious so they will fit within the culture. This step in the planning phase ensures employees are hired to meet Trader Joe’s goals. The staff is encourages to train and develop themselves as leaders. Trader Joe’s helps employees accomplish this goal through the Trader Joe’s University. The company ensures employees know what to do, but rarely tell them how to do it. This allows a fostering of motivation and enthusiasm within the organization’s associates motivating them to work hard but still feeling like they are part of a “family”. Trader Joe’s is known for their upward and downward communication through the chain of command operating as a team, while respecting individual opinions (Lewis, 2005). Finally, Trader Joe’s is efficient in the controlling aspect of the management process because they do run a tight ship by keeping the process full circle. Trader Joe’s starts with recruiting staff who will fit perfect into the organizational culture and then rewarding them with performance bonuses. Trader Joe’s uses extreme scrutiny in hiring as they want to make sure people come to work there, stay there. They also ensure they provide immediate feedback for the employee work so issues that arise can be corrected on the spot (Lewis, 2005). This keeps retention high. Emotional intelligence is defined by Schermerhorn (2012) as the “ability to understand emotions and manage relationships effectively”. Leaders can effectively manage relationships in general by using the four emotional intelligence (EI) competencies for leadership success: self-awareness, social awareness, self-management, and relationship management. Self-awareness is the understanding of our own emotions and how they affect not only ourselves, but others. Social awareness is also known as empathy or the understanding of other people’s emotions. Self-management is how to self-regulate and think before act to stay in control of our emotions. Relationship management is the rapport we have with others and how we use emotions to maintain good relationships (Schermerhorn, 2012). A leader can use all four of the EI competencies to build trust with others within their organization, creating a positive relationship with others so they feel more comfortable addressing any issues and feeling confident the leader will address them appropriately. Additionally, leaders can use the four EI competencies to act assertively without damaging the self-esteem of others or creating enemies (Simmons, 2001). The management at Trader Joe’s has successfully used the emotional intelligence competencies within their management staff to help develop a highly success and competitive business. Trader Joe’s is known for its success, but nothing is perfect.
There are some leadership practices that Trader Joe’s could implement to increase their competitive edge. First, an increased focus on their environmental sustainability would be beneficial. Trader Joe’s has been found in the past to have not been selling sustainable seafood and fared as one of the worst in its market (Schermerhorn, 2012). By becoming environmentally sustainable and staying that way, Trader Joe’s can get ahead of their competitors and regain their customers trust in environmental issues (How sustainability can give your company a competitive edge, 2012). Second, Trader Joe’s leadership must look to maintain their rank as an industry leader to keep their competitive edge. Currently, Trader Joe’s is at the top of their game, but similar grocers such as Wegman’s and Whole Foods are giving them competition. Finally, Trader Joe’s leadership can implement continued low costs. As economic times change, customers will continue to look to buying items at a lower cost but still with great value. So as Trader Joe’s begins to implement completely sustainable foods such as seafood, it is important to keep costs low for customers or they will go to the
competitor. Trader Joe’s has been listed in the Forbes magazine as one of the top places to work for several years in a row. The organizational culture is set up to benefit the employee and the customer. Job satisfaction and job performance are high showing a very low turnover rate. The management process within the organization is one that many businesses try to model after and mimic because of the success it has created. The leaders at Trader Joe’s are have high emotional intelligence and the benefits are exponential. Even though Trader Joe’s is not perfect, no business is, they are close and highly recommended not just as a place to work, but as a career path and way of life.
References
How sustainability can give your company a competitive edge. (2012). Retrieved October 26, 2014, from http://www.greenbiz.com/blog/2012/05/29/how-sustainability-give-your-company-competitive-edge
Lewis, L. (2005, June 2). Fostering a Loyal Workforce at Trader Joe 's. Retrieved October 24, 2014, from http://www.workforce.com/articles/fostering-a-loyal-workforce-at-trader-joe-s
Palmeri, C. (2008, February 20). Trader Joe 's Recipe for Success. Retrieved October 24, 2014, from http://www.businessweek.com/stories/2008-02-20/trader-joes-recipe-for-success
Schermerhorn, J. R. (2012). Organizational behavior (12th ed.). Danvers, MA: John Wiley & Sons, Inc.
Simmons, K. (2001, April 1). ASAE ® The Center for Association Leadership. Retrieved October 26, 2014, from http://www.asaecenter.org/Resources/articledetail.cfm?ItemNumber=13040
Trader Joe 's. (2014). Our Story | Trader Joe 's. Retrieved October 24, 2014, from http://www.traderjoes.com/our-story
Kirsten Farnham
Dr. McGrath
BUS-520: Leadership and Organizational Behavior
October 27, 2014
Trader Joe’s was a small convenience store chain in the 1950’s turned into the intimate grocery store chain it is known as today. Trader Joe’s founder, Joe Coulombe, after a visit to the Caribbean, decided to change his corner stores to a grocery store where customers can go to try new, hard to find products while still getting a great value and receiving amazing customer service (Trader Joe’s, 2014). The Trader Joe’s culture is lighthearted and customer oriented with a focus on employee nurturing creating a positive work environment, increased job satisfaction, employee development, …show more content…
and overall customer appreciation and fulfillment. Trader Joe’s is an excellent example of how positive organizational behavior can achieve a competitive advantage with a small product line, happy customers, and even happier employees. Trader Joe’s approach to promoting a positive work environment for its employees began with the founder, Coulombe.
He believed in an environment where customers enjoyed shopping and employees enjoyed working as if both the customer and the employee were on a vacation (Palmeri, 2008). Trader Joe’s increases job satisfaction and performance through a competitive compensation package, meaningful work, and an enjoyable work environment. Trader Joe’s places their focus on the employee because they believe “a happy employee makes for a happy customer and a happy customer will spend more and visit the store more often” (Lewis, 2005). The company offers more than fair compensation with benefits. Even part-time employees are able to earn health-care benefits. Additionally, the company almost exclusively promotes within. At Trader Joe’s “the crew”, or the employees, are encouraged to multitask without regard to their job description. They are also empowered to make their own decisions about store operations such as in store displays (Lewis, 2005). Trader Joe’s also provides excellent training programs through Trader Joe’s University to help employees cultivate their leadership skills. Finally, Trader Joe’s boasts an informal work environment such wearing Hawaiian shirts and calling co-workers “mates” and supervisors “captains”. This creates a collaborative work environment in which the staff feels part of a team, but also free to be themselves (Lewis, …show more content…
2005). Most effective businesses use the management process of planning, organizing, leading, and controlling to create an effective work environment and successful leaders within their company. Trader Joe’s does exactly this. Starting with employee recruitment, Trader Joe’s seeks out individuals that are fun spirited, friendly with strong values, customer-oriented, and ambitious so they will fit within the culture. This step in the planning phase ensures employees are hired to meet Trader Joe’s goals. The staff is encourages to train and develop themselves as leaders. Trader Joe’s helps employees accomplish this goal through the Trader Joe’s University. The company ensures employees know what to do, but rarely tell them how to do it. This allows a fostering of motivation and enthusiasm within the organization’s associates motivating them to work hard but still feeling like they are part of a “family”. Trader Joe’s is known for their upward and downward communication through the chain of command operating as a team, while respecting individual opinions (Lewis, 2005). Finally, Trader Joe’s is efficient in the controlling aspect of the management process because they do run a tight ship by keeping the process full circle. Trader Joe’s starts with recruiting staff who will fit perfect into the organizational culture and then rewarding them with performance bonuses. Trader Joe’s uses extreme scrutiny in hiring as they want to make sure people come to work there, stay there. They also ensure they provide immediate feedback for the employee work so issues that arise can be corrected on the spot (Lewis, 2005). This keeps retention high. Emotional intelligence is defined by Schermerhorn (2012) as the “ability to understand emotions and manage relationships effectively”. Leaders can effectively manage relationships in general by using the four emotional intelligence (EI) competencies for leadership success: self-awareness, social awareness, self-management, and relationship management. Self-awareness is the understanding of our own emotions and how they affect not only ourselves, but others. Social awareness is also known as empathy or the understanding of other people’s emotions. Self-management is how to self-regulate and think before act to stay in control of our emotions. Relationship management is the rapport we have with others and how we use emotions to maintain good relationships (Schermerhorn, 2012). A leader can use all four of the EI competencies to build trust with others within their organization, creating a positive relationship with others so they feel more comfortable addressing any issues and feeling confident the leader will address them appropriately. Additionally, leaders can use the four EI competencies to act assertively without damaging the self-esteem of others or creating enemies (Simmons, 2001). The management at Trader Joe’s has successfully used the emotional intelligence competencies within their management staff to help develop a highly success and competitive business. Trader Joe’s is known for its success, but nothing is perfect.
There are some leadership practices that Trader Joe’s could implement to increase their competitive edge. First, an increased focus on their environmental sustainability would be beneficial. Trader Joe’s has been found in the past to have not been selling sustainable seafood and fared as one of the worst in its market (Schermerhorn, 2012). By becoming environmentally sustainable and staying that way, Trader Joe’s can get ahead of their competitors and regain their customers trust in environmental issues (How sustainability can give your company a competitive edge, 2012). Second, Trader Joe’s leadership must look to maintain their rank as an industry leader to keep their competitive edge. Currently, Trader Joe’s is at the top of their game, but similar grocers such as Wegman’s and Whole Foods are giving them competition. Finally, Trader Joe’s leadership can implement continued low costs. As economic times change, customers will continue to look to buying items at a lower cost but still with great value. So as Trader Joe’s begins to implement completely sustainable foods such as seafood, it is important to keep costs low for customers or they will go to the
competitor. Trader Joe’s has been listed in the Forbes magazine as one of the top places to work for several years in a row. The organizational culture is set up to benefit the employee and the customer. Job satisfaction and job performance are high showing a very low turnover rate. The management process within the organization is one that many businesses try to model after and mimic because of the success it has created. The leaders at Trader Joe’s are have high emotional intelligence and the benefits are exponential. Even though Trader Joe’s is not perfect, no business is, they are close and highly recommended not just as a place to work, but as a career path and way of life.
References
How sustainability can give your company a competitive edge. (2012). Retrieved October 26, 2014, from http://www.greenbiz.com/blog/2012/05/29/how-sustainability-give-your-company-competitive-edge
Lewis, L. (2005, June 2). Fostering a Loyal Workforce at Trader Joe 's. Retrieved October 24, 2014, from http://www.workforce.com/articles/fostering-a-loyal-workforce-at-trader-joe-s
Palmeri, C. (2008, February 20). Trader Joe 's Recipe for Success. Retrieved October 24, 2014, from http://www.businessweek.com/stories/2008-02-20/trader-joes-recipe-for-success
Schermerhorn, J. R. (2012). Organizational behavior (12th ed.). Danvers, MA: John Wiley & Sons, Inc.
Simmons, K. (2001, April 1). ASAE ® The Center for Association Leadership. Retrieved October 26, 2014, from http://www.asaecenter.org/Resources/articledetail.cfm?ItemNumber=13040
Trader Joe 's. (2014). Our Story | Trader Joe 's. Retrieved October 24, 2014, from http://www.traderjoes.com/our-story