Attitudes and Job Satisfaction 1

Albertsons Works on Employee Attitudes

 Attitudes and Job Satisfaction 2

The case incident describes a huge grocery and drug company, Albertsons, which has

over 2,400 supermarkets and its drug brands make it the fifth largest drug-company in the

United States. However Albertsons has hard times as its main competitor, Wal- Mart

Company, eats away at its market share. As Albertsons revenue remained flat and profits

decrease, the administration decided to hire Larry Johnson to turn around the company.

Johnson was working for General Electric, where he was assigned to fix GE’s European

division. While working for General Electric Johnson met the training specialist Ed Foreman.

Johnson made some changes in GE’s division, such as transferring factories to countries with

low labor cost, closing down inefficient plants, and later brought in Foreman. Foreman

contributed in General Electric through his three - day program, which aimed to change

employees’ attitude, in a way that employees would become more energetic, showing more

zeal towards the company. According to Johnston, the program worked perfect as it led to

company’s profit increase. Johnston decided to bring Foreman to Albertsons Company, as he

believed that his program application would have the same results. Moreover he decided to

subdue his $10 - million budget on this training. The training schedule had formed as

followed: training of 10.000 managers until the end of 2004, and then they would train all

190.000 associates with the help of tapes and books.

Albertsons first grocery store was founded in 1939 and its success led to the opening

of additional stores in other neighboring towns. The company kept growing and twenty years

later Albertsons became a publicly traded company on the New York Stock Exchange.

Albertsons expanded in the field of drugs and its growth continued, opening additional stores

and acquiring other grocery and drug store chains.

In the area of technology Albertsons made progressive steps. In recent years added a

system "check out while you go", where shoppers scanned products as they shopped and

quickly paid before leaving, but this system has been removed from several stores. In other
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areas Albertsons offer the option to shop from home through the company’s web site; the

items were either delivered to customer’s place or the pick ups were arranged at the store.

Albertsons also used a savings program called "Bonus Buys." "Bonus Buys" were available

to anyone that shopped at Albertsons and allowed the customers to see the savings.

Wal – Mart Company was founded in 1962 and publicly traded on the New York

Stock Exchange in 1972. Today Wal - Mart is a multinational company that operates in

fifteen countries and under fifty five different names. In U.S. the company does business in

nine different retail formats in: supercenters, food and drugs, general merchandise stores,

small markets, cash and carry stores, membership warehouse clubs [retail stores, where

customers buy large quantities at a low price due to the no – frills (removing the products’

essential features in order to keep their price down) format of the store, apparel stores,

discount stores and restaurants (includes general merchandise and a selection of groceries)].

Many of these stores also have a garden center, a pharmacy, Tire & Lube Express, optical

center, one-hour photo processing lab, portrait studio, a bank branch, a cell phone store and a

fast food outlet. Some also have gasoline stations).

Revenues and profits are the map for a company to check whether it does well in

business or not, review corporate strategies and improvement fringes. Albertsons saw its

revenues from sales and other charges to customers being flat and its profit decreasing. This

problem did not occur by any external factor, for instance a general economic situation, but

from internal factors, since, as mentioned, a big share of their market was “transferred” to

their main competitor Wal – Mart Company. Hence, the issue is not only about the profit

decrease, but the fact that the company actually lost that share of customers.

Factors that could have contributed in profit falling and customers’ loss may be the

products’ quality, price, variety, customers’ service and company’s overall expenses. So the

company should focus on improving these sectors.

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The fact that customers changed their preference and chose to visit Wal – Mart

instead of Albertsons or any other competitor is not random. Wal – Mart’s strategy and

culture, according to Sam Walton - the founder of the company - is “Offer shoppers lower

prices than they get anywhere else”. Today Wal – Mart is so huge that has the power to shape

the labor markets, pushing suppliers to sell merchandise at the lowest price. Moreover Wal –

Mart is not a typical grocery store, as a customer visiting the store can be supplied with

products of / about grocery, pharmacy, photo, car, fitness, toys, apparel, shoes, jewelry,

furniture and other home products, movies, music and books, electronics and office products.

So, why customers should chose to go to different places to get what they need, while they

can get everything in one store and in low prices? And is the wide range and low prices the

only issue for customers?

Albertsons structure and policy do not allow having this huge range of products, as

Wal – Mart’s, and this is known to the public; thus the issue that led customers in changing to

Wal – Mart choice was the price differences. So administration must take actions and try to

bring those customers back, by minimizing company’s expenses and trying to close cost

effective deals with suppliers, adjusting products prices as much as possible, or even increase

company’s own labeled products. Albertsons turning to media and press could also increase

customers’ visits as a first step and increase of actual sales later. Budget allocation in

commercials; promoting the lower prices in combination with the human, friendly side of the

company, which gives gravity in customers’ – company relationships and customers’ service;

and promotion of brochures with special offers and gifts.

Of course according to Wal – Mart’s reputation, prices are the lowest in the market,

due to the strategy that was mentioned above. So what could Albertsons do in order to cover

this difference in costs? Improving the customers’ service seems to be the answer; because

low prices are what every consumer is after, but always in combination with service quality.
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Wal – Mart strategy mentions that in order for the company to insure operational

success it focuses on its people. So the company focuses managers and employees on a

continuous learning, improvement and employee empowerment. Additionally Wal – Mart

managers attend on a weekly base a cultural training, so that they act like business owners,

looking for opportunities to solve problems and eliminate business risk. Another plan that is

included in the company’s strategy is for all the employees to think and act like retail

merchants; focus on how to help the stores improve service to customers and to make

business decisions on behalf of customers. Other plans that Wal – Mart’s strategy includes

are expenses reduction at the bottom line, hiring people from colleges with retail institutes,

implementing in employees’ culture customers’ fanaticism and crediting employees on sales

goal, serving customers and controlling expenses.

But facts and other employees’ and customers’ testimonies show that Wal – Mart

does not follow the plan it presents. In the past forty lawsuits had been filed by employees

who said that they were forced to work overtime for no pay, other employees mentioned sex

discrimination, as the article of USA Today (issued in 2003) presents; only Wal – Mart’s

managers mentioned flattering comments for the company. Additionally many customers

have mentioned that the company maintains indeed low prices, but customers’ service is of

bad quality. But nevertheless Wal – Mart keeps growing and growing, so low prices are the

primary factor.

Customers’ service quality is based on employees’ attitude and job satisfaction; as

Johnston mentions in this case incident “Positive attitude is the single biggest thing that can

change a business”. An employee who is happy and satisfied with his/her work, will work

even harder and will overpower even bigger effort to improve his/her productivity, because

he/she has positive emotions, feels engaged to his/her job. If an employee has negative

feelings and is not happy with his/her job will not feel the need or want to empower any extra
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effort to improve productivity. However increase of productivity does not only depend on the

employee’s feelings or moods, but also depends on management, which must be acquired

with skills that allows it to handle different situations within the company in order to increase

productivity and job satisfaction.

As studies have proved that employees’ attitudes are directly related, along with job

satisfaction, to the company’s success, a company must continuous work on forming both;

and this is accomplished by communication, understanding employees’ needs and

empowering cohesiveness and building commitment by making employees feel the company

as family and as if they were co – owners, to speak up their opinion and not be afraid of

management.

Foreman’s program aims in building cohesiveness, but misses the main point; not all

employees have the same needs. For example Foreman’s program foresees starting at 6.00

a.m. yoga, mind – exercises, diet, breakfast and lecture on attitude. But not all employees in

this case have this time available and even if they did have it, it is not certain that they would

like to dedicate it in this program. This program, in a best case, could be applied in a new

group of Albertsons employees. An employee, who has been working for the company for

years, may need other proposals, such as more flexible working shifts, bonuses or raises, a

space for employees’ children in a nursery school or kindergarten format, which would be a

great help for mothers employees, or other needs that would be better to be discussed with

management.

Albertsons can schedule trainings and seminars and name them “Win to Win

Program”, because this is actually the case; employees win since they acquire more skills and

their productivity increases and the company wins from employees’ productivity. And

employees would get the message. Additionally in seminars they could include, a brief

financial summary of Albertsons and if available from competition, other competitors’ data,
 Attitudes and Job Satisfaction 7

such as strategies, culture, their strengths and weaknesses, Albertsons’ strengths and

weakness and exchanging ideas of how the weakness of competitors could turn in Albertsons

benefits and how Albertsons could fight its weakness.

According to testimonies, employees describe Albertsons as a good company, which

takes good care of its people, helps them reach their potentials and has respectful attitude

towards them; and customers’ testimonies describe the good product quality and the

customers’ service.

For every company, working on its employees’ attitude, job satisfaction and building

a healthy relationship needs continuous and full time work from both sides; because this

effort does not come only from one side, and it is the recipe for a strong, good co-operation.

What I obtained from my personal working experience in the field of relationships between

companies and employees is that when a company abandons its employees, employees

abandons the company and vice versa.

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SOURCES

Case Incident:Albertsons Works on Employee Attitudes ( The Effective Organization, 11th

edition, Ch.3, p.93 – 94)

www.albertsonsmarket.com

http://en.wikipedia.org/wiki/Albertsons_(SuperValu)

www.walmart.com

http://en.wikipedia.org/wiki/Wal-Mart

http://findarticles.com/p/articles/mi_m0FNP/is_16_40/ai_78544549/

http://money.howstuffworks.com/wal-mart.htm

http://www.hrmagazine.co.uk/news/1029675/HR-division-Wal-Mart-drives-companys-
success-people/

Testimonies:

http://money.howstuffworks.com/wal-mart.htm

http://www.chacha.com/question/are-groceries-cheaper-at-albertsons-or-walmart

http://www.financialcrisis2009.org/forum/Corporations/Should-I-work-at-Wal-Mart-or-
Albertsons-256053.htm

http://www.consumeraffairs.com/retail/walmart_customer_service.html

http://www.usatoday.com/money/workplace/2003-02-09-wal-mart-cov2_x.htm

http://www.yelp.com/topic/pasco-wal-mart-verses-albertsons-the-price-difference

http://www.careerbliss.com/company-reviews/albertsons-reviews-262973/
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