September 26, 2011
Nordstrom, Inc.: Organization Commitment and Communication
Leadership of an organization sets the tone for communication in and out of the organization. This paper will discuss leadership styles, bases of power and motivational theories as they pertain to Nordstrom, Inc. and other organizations. Publius Syrus, wrote, “The greater a man is in power above others, the more he ought to excel them in virtue. None ought to govern who is not better than the governed.” Although this was written in the 1st century B.C., it has relevance in the world today. Nordstrom, Inc. is a company whose management embodies this philosophy in their day-to-day workings as well as the ownership of the company. The management structure is such that there is no Chief Executive Officer and the founders of the company own the same class stock as other shareholders with the same voting rights. Leadership Styles
There are three basic leadership styles. Most leaders use a dominant style but may use other styles during periods of change. As situations change, leaders need to change leadership styles to insure the survival of the company or move through a difficult time. A recent example is the recession in the United States that began around 2008. Companies faced downsizing, declining sales and in some cases, ceased to exist. Retailers, like Nordstrom, Inc. have had to adjust to a new marketplace and be willing to make the changes needed to remain profitable. The authoritative style of leadership, also known as autocratic, is a style where leaders provide their expectations of what needs to be done and how. The authoritarian leader typically makes his decision without input from the group. This type of leader is seen as bossy and controlling. The democratic leader encourages and directs, but all policies are a matter of group discussion and decision. The leader is objective or “fact-minded” in praise and criticism and tries to be a regular group member in spirit without doing too much of the work (Beebe & Masterson, p. 291, 2009). The final leadership style is laissez-faire. With this style, the leader participates at a minimum level; there is complete freedom for group or individual decisions (Beebe & Masterson, p. 291, 2009). The leaders of Nordstrom, Inc. find themselves using the democratic style as their day-to-day way of doing business. They continually seek feedback from the sales clerks and customer service representatives. They want to know what the customer is thinking – what the customer wants. Nordstrom, Inc. learned its customer centric service has provided it with a loyal customer base. In July 2010, Mike Duff wrote,
Nordstrom (JWN) recognizes that consumers will opt for luxury when it is offered to them as a value they appreciate, and how the retailer has acted on that observation has helped keep it in the forefront of a department store sector resurgence. These days, value often is associated with discounting and consumers trading down to bargain retailers. However, the term is a relative one that Nordstrom has proven adept at applying to its business. The company has maintained its standards of product and services for consumers who have enough disposable income to value elegance and pampering, yet it also has made it easier for less affluent consumers to tap the luxury it represents.
This is not to say that Nordstrom did not have its fair share of struggles during this economic downturn. As reported by Eric Fox in August 2008: Nordstrom (NYSE:JWN) reported revenue of $2.29 billion, and diluted earnings per share of $0.65 for the second quarter of 2008. The company also lowered its guidance for the full year and third quarter. The report disappointed investors who might have been hoping that falling prices for gasoline and other commodities would have helped the retailer. Full-year earnings are...