Nordstrom Inc. is a Seattle-based department store rivaling the likes of Saks Fi

Question

Nordstrom Inc. is a Seattle-based department store rivaling the likes of Saks Fifth Avenue, Neiman Marcus, and Bloomingdale’s. Nordstrom is a Hall of Fame member of Fortune magazine’s “100 Best Companies to Work For” list. Nordstrom is known for its quality apparel, upscale environment, and generous employee rewards. However, what Nordstrom is most famous for is its delivery of customer service above and beyond the norms of the retail industry. This service orientation serves as a form of control as it helps employees decide how to behave when they encounter new situations. Stories about Nordstrom service abound. For example, according to one story the company confirms from long ago, in 1975 Nordstrom moved into a new location that had formerly been a tire store. A customer brought a set of tires into the store to return them. Without a word about the mix-up, the tires were accepted, and the customer was fully refunded the purchase price. In a different story, a customer tried on several pairs of shoes but failed to find the right combination of size and color. As she was about to leave, the clerk called other Nordstrom stores but could only locate the right pair at Macy’s, a nearby competitor. The clerk had Macy’s ship the shoes to the customer’s home at Nordstrom’s expense. In a third story, a customer describes wandering into a Portland, Oregon, Nordstrom looking for an Armani tuxedo for his daughter’s wedding. The sales associate took his measurements just in case one was found. The next day, the customer got a phone call, informing him that the tux was available. When pressed, the associate revealed that using her connections she found one in New York, had it put on a truck destined to Chicago, and dispatched someone to meet the truck in Chicago at a rest stop. The next day she shipped the tux to the customer’s address, and the customer found that the tux had already been altered for his measurements and was ready to wear. What is even more impressive about this story is that Nordstrom does not sell Armani tuxedos.
How does Nordstrom persist in creating these stories that serve as a way to control and direct employee behavior? If you guessed that they have a large number of rules and regulations designed to emphasize quality in customer service, you’d be wrong. In fact, the company gives employees a 5½-inch by 7½-inch card as the employee handbook. On one side of the card, the company welcomes employees to Nordstrom and states that their number one goal is to provide outstanding customer service, and for this they have only one rule. On the other side of the card, the single rule is stated: “Use good judgment in all situations.” By leaving it in the hands of Nordstrom associates, the company seems to have empowered employees who deliver customer service heroics every day.
Case written by Berrin Erdogan and Talya Bauer. Partially based on information from Chatman, J. A., & Eunyoung Cha, S. (2003). Leading by leveraging culture. California Management Review, 45, 19–34; McCarthy, P. D., & Spector, R. (2005). The Nordstrom way to customer service excellence: A handbook for implementing great service in your organization. Hoboken, NJ: John Wiley; Pfeffer, J. (2005). Producing sustainable competitive advantage through the effective management of people. Academy of Management Executive, 19, 95–106; Nordstrom- best companies to work for 2013, Fortune. Retrieved March 25, 2016 from http://archive.fortune.com/ magazines/fortune/best-companies/2013/snapshots/88.html.
Case Discussion Questions
1.The controlling facet of the P-O-L-C framework introduces you to a variety of controls. What types of controls does Nordstrom seem to effectively incorporate into their operations?
2.Does Nordstrom use behavioral controls? What are some examples?
3.Does Nordstrom use outcome controls? What are some examples?
4.What suggestions would you give Nordstrom for maintaining and evolving the organizational culture that has contributed to its success?
5.What balanced scorecard elements does Nordstrom seem to view as most important?
Nordstrom Inc. is a Seattle-based department store rivaling the likes of Saks Fifth Avenue, Neiman Marcus, and Bloomingdale’s. Nordstrom is a Hall of Fame member of Fortune magazine’s “100 Best Companies to Work For” list. Nordstrom is known for its quality apparel, upscale environment, and generous employee rewards. However, what Nordstrom is most famous for is its delivery of customer service above and beyond the norms of the retail industry. This service orientation serves as a form of control as it helps employees decide how to behave when they encounter new situations. Stories about Nordstrom service abound. For example, according to one story the company confirms from long ago, in 1975 Nordstrom moved into a new location that had formerly been a tire store. A customer brought a set of tires into the store to return them. Without a word about the mix-up, the tires were accepted, and the customer was fully refunded the purchase price. In a different story, a customer tried on several pairs of shoes but failed to find the right combination of size and color. As she was about to leave, the clerk called other Nordstrom stores but could only locate the right pair at Macy’s, a nearby competitor. The clerk had Macy’s ship the shoes to the customer’s home at Nordstrom’s expense. In a third story, a customer describes wandering into a Portland, Oregon, Nordstrom looking for an Armani tuxedo for his daughter’s wedding. The sales associate took his measurements just in case one was found. The next day, the customer got a phone call, informing him that the tux was available. When pressed, the associate revealed that using her connections she found one in New York, had it put on a truck destined to Chicago, and dispatched someone to meet the truck in Chicago at a rest stop. The next day she shipped the tux to the customer’s address, and the customer found that the tux had already been altered for his measurements and was ready to wear. What is even more impressive about this story is that Nordstrom does not sell Armani tuxedos.
How does Nordstrom persist in creating these stories that serve as a way to control and direct employee behavior? If you guessed that they have a large number of rules and regulations designed to emphasize quality in customer service, you’d be wrong. In fact, the company gives employees a 5½-inch by 7½-inch card as the employee handbook. On one side of the card, the company welcomes employees to Nordstrom and states that their number one goal is to provide outstanding customer service, and for this they have only one rule. On the other side of the card, the single rule is stated: “Use good judgment in all situations.” By leaving it in the hands of Nordstrom associates, the company seems to have empowered employees who deliver customer service heroics every day.
Case written by Berrin Erdogan and Talya Bauer. Partially based on information from Chatman, J. A., & Eunyoung Cha, S. (2003). Leading by leveraging culture. California Management Review, 45, 19–34; McCarthy, P. D., & Spector, R. (2005). The Nordstrom way to customer service excellence: A handbook for implementing great service in your organization. Hoboken, NJ: John Wiley; Pfeffer, J. (2005). Producing sustainable competitive advantage through the effective management of people. Academy of Management Executive, 19, 95–106; Nordstrom- best companies to work for 2013, Fortune. Retrieved March 25, 2016 from http://archive.fortune.com/ magazines/fortune/best-companies/2013/snapshots/88.html.
Case Discussion Questions
1.The controlling facet of the P-O-L-C framework introduces you to a variety of controls. What types of controls does Nordstrom seem to effectively incorporate into their operations?
2.Does Nordstrom use behavioral controls? What are some examples?
3.Does Nordstrom use outcome controls? What are some examples?
4.What suggestions would you give Nordstrom for maintaining and evolving the organizational culture that has contributed to its success?
5.What balanced scorecard elements does Nordstrom seem to view as most important?
Nordstrom Inc. is a Seattle-based department store rivaling the likes of Saks Fifth Avenue, Neiman Marcus, and Bloomingdale’s. Nordstrom is a Hall of Fame member of Fortune magazine’s “100 Best Companies to Work For” list. Nordstrom is known for its quality apparel, upscale environment, and generous employee rewards. However, what Nordstrom is most famous for is its delivery of customer service above and beyond the norms of the retail industry. This service orientation serves as a form of control as it helps employees decide how to behave when they encounter new situations. Stories about Nordstrom service abound. For example, according to one story the company confirms from long ago, in 1975 Nordstrom moved into a new location that had formerly been a tire store. A customer brought a set of tires into the store to return them. Without a word about the mix-up, the tires were accepted, and the customer was fully refunded the purchase price. In a different story, a customer tried on several pairs of shoes but failed to find the right combination of size and color. As she was about to leave, the clerk called other Nordstrom stores but could only locate the right pair at Macy’s, a nearby competitor. The clerk had Macy’s ship the shoes to the customer’s home at Nordstrom’s expense. In a third story, a customer describes wandering into a Portland, Oregon, Nordstrom looking for an Armani tuxedo for his daughter’s wedding. The sales associate took his measurements just in case one was found. The next day, the customer got a phone call, informing him that the tux was available. When pressed, the associate revealed that using her connections she found one in New York, had it put on a truck destined to Chicago, and dispatched someone to meet the truck in Chicago at a rest stop. The next day she shipped the tux to the customer’s address, and the customer found that the tux had already been altered for his measurements and was ready to wear. What is even more impressive about this story is that Nordstrom does not sell Armani tuxedos.
How does Nordstrom persist in creating these stories that serve as a way to control and direct employee behavior? If you guessed that they have a large number of rules and regulations designed to emphasize quality in customer service, you’d be wrong. In fact, the company gives employees a 5½-inch by 7½-inch card as the employee handbook. On one side of the card, the company welcomes employees to Nordstrom and states that their number one goal is to provide outstanding customer service, and for this they have only one rule. On the other side of the card, the single rule is stated: “Use good judgment in all situations.” By leaving it in the hands of Nordstrom associates, the company seems to have empowered employees who deliver customer service heroics every day.
Case written by Berrin Erdogan and Talya Bauer. Partially based on information from Chatman, J. A., & Eunyoung Cha, S. (2003). Leading by leveraging culture. California Management Review, 45, 19–34; McCarthy, P. D., & Spector, R. (2005). The Nordstrom way to customer service excellence: A handbook for implementing great service in your organization. Hoboken, NJ: John Wiley; Pfeffer, J. (2005). Producing sustainable competitive advantage through the effective management of people. Academy of Management Executive, 19, 95–106; Nordstrom- best companies to work for 2013, Fortune. Retrieved March 25, 2016 from http://archive.fortune.com/ magazines/fortune/best-companies/2013/snapshots/88.html.
Case Discussion Questions
1.The controlling facet of the P-O-L-C framework introduces you to a variety of controls. What types of controls does Nordstrom seem to effectively incorporate into their operations?
2.Does Nordstrom use behavioral controls? What are some examples?
3.Does Nordstrom use outcome controls? What are some examples?
4.What suggestions would you give Nordstrom for maintaining and evolving the organizational culture that has contributed to its success?
5.What balanced scorecard elements does Nordstrom seem to view as most important?
Nordstrom Inc. is a Seattle-based department store rivaling the likes of Saks Fifth Avenue, Neiman Marcus, and Bloomingdale’s. Nordstrom is a Hall of Fame member of Fortune magazine’s “100 Best Companies to Work For” list. Nordstrom is known for its quality apparel, upscale environment, and generous employee rewards. However, what Nordstrom is most famous for is its delivery of customer service above and beyond the norms of the retail industry. This service orientation serves as a form of control as it helps employees decide how to behave when they encounter new situations. Stories about Nordstrom service abound. For example, according to one story the company confirms from long ago, in 1975 Nordstrom moved into a new location that had formerly been a tire store. A customer brought a set of tires into the store to return them. Without a word about the mix-up, the tires were accepted, and the customer was fully refunded the purchase price. In a different story, a customer tried on several pairs of shoes but failed to find the right combination of size and color. As she was about to leave, the clerk called other Nordstrom stores but could only locate the right pair at Macy’s, a nearby competitor. The clerk had Macy’s ship the shoes to the customer’s home at Nordstrom’s expense. In a third story, a customer describes wandering into a Portland, Oregon, Nordstrom looking for an Armani tuxedo for his daughter’s wedding. The sales associate took his measurements just in case one was found. The next day, the customer got a phone call, informing him that the tux was available. When pressed, the associate revealed that using her connections she found one in New York, had it put on a truck destined to Chicago, and dispatched someone to meet the truck in Chicago at a rest stop. The next day she shipped the tux to the customer’s address, and the customer found that the tux had already been altered for his measurements and was ready to wear. What is even more impressive about this story is that Nordstrom does not sell Armani tuxedos.
How does Nordstrom persist in creating these stories that serve as a way to control and direct employee behavior? If you guessed that they have a large number of rules and regulations designed to emphasize quality in customer service, you’d be wrong. In fact, the company gives employees a 5½-inch by 7½-inch card as the employee handbook. On one side of the card, the company welcomes employees to Nordstrom and states that their number one goal is to provide outstanding customer service, and for this they have only one rule. On the other side of the card, the single rule is stated: “Use good judgment in all situations.” By leaving it in the hands of Nordstrom associates, the company seems to have empowered employees who deliver customer service heroics every day.
Case written by Berrin Erdogan and Talya Bauer. Partially based on information from Chatman, J. A., & Eunyoung Cha, S. (2003). Leading by leveraging culture. California Management Review, 45, 19–34; McCarthy, P. D., & Spector, R. (2005). The Nordstrom way to customer service excellence: A handbook for implementing great service in your organization. Hoboken, NJ: John Wiley; Pfeffer, J. (2005). Producing sustainable competitive advantage through the effective management of people. Academy of Management Executive, 19, 95–106; Nordstrom- best companies to work for 2013, Fortune. Retrieved March 25, 2016 from http://archive.fortune.com/ magazines/fortune/best-companies/2013/snapshots/88.html.
Case Discussion Questions
1.The controlling facet of the P-O-L-C framework introduces you to a variety of controls. What types of controls does Nordstrom seem to effectively incorporate into their operations?
2.Does Nordstrom use behavioral controls? What are some examples?
3.Does Nordstrom use outcome controls? What are some examples?
4.What suggestions would you give Nordstrom for maintaining and evolving the organizational culture that has contributed to its success?
5.What balanced scorecard elements does Nordstrom seem to view as most important?
Nordstrom Inc. is a Seattle-based department store rivaling the likes of Saks Fifth Avenue, Neiman Marcus, and Bloomingdale’s. Nordstrom is a Hall of Fame member of Fortune magazine’s “100 Best Companies to Work For” list. Nordstrom is known for its quality apparel, upscale environment, and generous employee rewards. However, what Nordstrom is most famous for is its delivery of customer service above and beyond the norms of the retail industry. This service orientation serves as a form of control as it helps employees decide how to behave when they encounter new situations. Stories about Nordstrom service abound. For example, according to one story the company confirms from long ago, in 1975 Nordstrom moved into a new location that had formerly been a tire store. A customer brought a set of tires into the store to return them. Without a word about the mix-up, the tires were accepted, and the customer was fully refunded the purchase price. In a different story, a customer tried on several pairs of shoes but failed to find the right combination of size and color. As she was about to leave, the clerk called other Nordstrom stores but could only locate the right pair at Macy’s, a nearby competitor. The clerk had Macy’s ship the shoes to the customer’s home at Nordstrom’s expense. In a third story, a customer describes wandering into a Portland, Oregon, Nordstrom looking for an Armani tuxedo for his daughter’s wedding. The sales associate took his measurements just in case one was found. The next day, the customer got a phone call, informing him that the tux was available. When pressed, the associate revealed that using her connections she found one in New York, had it put on a truck destined to Chicago, and dispatched someone to meet the truck in Chicago at a rest stop. The next day she shipped the tux to the customer’s address, and the customer found that the tux had already been altered for his measurements and was ready to wear. What is even more impressive about this story is that Nordstrom does not sell Armani tuxedos.
How does Nordstrom persist in creating these stories that serve as a way to control and direct employee behavior? If you guessed that they have a large number of rules and regulations designed to emphasize quality in customer service, you’d be wrong. In fact, the company gives employees a 5½-inch by 7½-inch card as the employee handbook. On one side of the card, the company welcomes employees to Nordstrom and states that their number one goal is to provide outstanding customer service, and for this they have only one rule. On the other side of the card, the single rule is stated: “Use good judgment in all situations.” By leaving it in the hands of Nordstrom associates, the company seems to have empowered employees who deliver customer service heroics every day.
Case written by Berrin Erdogan and Talya Bauer. Partially based on information from Chatman, J. A., & Eunyoung Cha, S. (2003). Leading by leveraging culture. California Management Review, 45, 19–34; McCarthy, P. D., & Spector, R. (2005). The Nordstrom way to customer service excellence: A handbook for implementing great service in your organization. Hoboken, NJ: John Wiley; Pfeffer, J. (2005). Producing sustainable competitive advantage through the effective management of people. Academy of Management Executive, 19, 95–106; Nordstrom- best companies to work for 2013, Fortune. Retrieved March 25, 2016 from http://archive.fortune.com/ magazines/fortune/best-companies/2013/snapshots/88.html.
Case Discussion Questions
1.The controlling facet of the P-O-L-C framework introduces you to a variety of controls. What types of controls does Nordstrom seem to effectively incorporate into their operations?
2.Does Nordstrom use behavioral controls? What are some examples?
3.Does Nordstrom use outcome controls? What are some examples?
4.What suggestions would you give Nordstrom for maintaining and evolving the organizational culture that has contributed to its success?
5.What balanced scorecard elements does Nordstrom seem to view as most important?

Explanation / Answer

1. POLC framework

Controls create a standard for peformance. POLC framework spans reporting relationships, control systems, compensation policies, and, management interface with value-adding functions, and, customers in the firm. The firm can be used for categorizing managerial activities for achieving organizational goals.

The control that is being discussed is service orientation. It is to help workers decide on their behaviour on encountering new situations. If a consumer visits a store to buy a product, the attendants are to make sure that the products are procured, and, the consumers receive them where they are, if the Nordstrom store does not have the product in stock.

2. Normative controls are used to shape values, and, beliefs in order to guide workers' decisions, and, behaviours. Extraordinary customer care permeates the entire system. The organization encourages employees to set personal, and, professional goals and work towards achieving them. Individuals are hired only if they embody Nordstrom value, and, service attitudes. Employees learn by observing experienced employees.

3. Outcome controls

Regulation of results through incentives & rewards. As long as workers accomplish measurable results, workers are free to behave as they see fit. The organization has been known to use normative, or, behavioural controls or outcome controls.

4. Evolving, and, maintaining the organizational culture

Can opt for outcome controls; there can be flaws with the system for service orientation. Sales per hour performance system has been at the center of investigative reports, and, lawsuits, the system is abused without counterbalancing controls. The number of work hours are reduced to give a higher number.

5. Balanced Scorecard

Balanced Scorecard categorizes targets, measures, and, initiatives for financial, process, organizational, and, customer categories

One can list the organization's priorities & the manner in which the organization is trying to accomplish, the strategy used, and, metrics to measure the final result

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