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Organisational Culture Jc Penney

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Organisational Culture Jc Penney
REMAKING JC PENNEY’S ORGANISATIONAL CULTURE

1 Do you think JC Penney was justified in appointing Mike Ullman, an outsider, as CEO instead of Vanessa Castagna, considering that Castagna was instrumental in turning around JC Penney in the early 2000s? Soon afterwards, Castagna left the company. What are the pros and cons of “bringing in an outsider” and promoting from within”? Discuss too the impact of such decisions on the morale of the employees.

JC Penney is a mid range chain of American department stores, which was first started by James Cash Penney 1902, when he was offered a one third partnership in a new store with Guy Johnson and Thomas Callahan called The Golden Rule. The store was a dry goods and clothing store in Kemmerer, Wyoming and from here the chain spread rapidly throughout the United States changing its name to JC Penney in 1913 when James Penney took a greater ownership of the chain. At about this time several partners met at Salt Lake City to draft “The Penney Idea”, a set of business principles that were to guide the business from then on. Wikipedia.com viewed 9th September 2007.

Over the years the chain of the department stores continued to grow through a system where the managers put equity into their stores giving them more control over what was sold. As a result the merchandising system was decentralised while all its competitors had a more centralised system allowing them to know what was in stock at any one time, what was moving and what was not; and to be able to advertise on a national basis. With the intense competition found in the retail sector in the late 1990s, JC Penney began to find its place in the market was under pressure and profits began to decline. At this stage it made the new appointments of Allen Questrom as the CEO and Vanessa Castagna as the new COO.

Castagna came to JC Penneys with a great deal of merchandising experience gained from other retail chain stores. With this experience she



References: http://en.wikipedia.org/wiki/James_C._Penney http://en.wikipedia.org/wiki/J._C._Penney http://investing.businessweek.com/research/stocks/charts/charts.asp?symbol=JCP Daft, L 2005, The Leadership Experience, Thomson South Western, Ohio DuBrin, A, Dalglish, C & Miller, P 2006, Leadership, John Wiley & Sons Australia, Milton JC Penney Company, Inc, 2006, Annual Report Kotter, J 1996, Leading Change, Harvard Business School Press, Boston Limerick, D & Cunnington, B 1993, Managing the new Organisation, Business & Professional Publishing, Chatswood Stone, R 2005, Human Resource Management, John Wiley & Sons Australia, Milton

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