Nadler-Tushman Congruence Model and Whole Foods Market Essay

Excerpt from Essay :

Business Studies

Assessment of Whole Foods Market Outputs with the Nadler-Tushman Congruence Model

The Nadler-Tushman Congruence Model may be used to analyze the performance of an organization, looking at the output across three different levels; the organizational level, the group level and individual level. XCG been undertaken an analysis of Whole Foods Market, and after determining that this model may provide them with the most useful information for an analysis of the company, the analysis needs to be undertaken, using the information that is a ready been collected.

Outputs at the Organizational Level

The firm is a retailer of healthy, organic food, therefore the first output achieved through all of the stores, with the sale of food to its target market. This output is achieved through the company's role as a middleman intermediary in the supply chain. The firm identifies and purchases products from upstream suppliers, including local organic farmers as well as manufacturers provide own brand goods, which are then distributed across the stores, and are then sold to the customers who visit the stores. The company has in excess of 2,400 product lines which are sold in the Whole Foods Market shops.

The sale of the goods, which is also supported by the input from employees, creates another type of output, the financial outputs. The financial outputs can be quantified by looking at the annual accounts, with the company achieving a total revenue sales of $12,917 million for the financial year that ended in 2013, and a before tax net profit of $894 million (Whole Foods Market, 2013). This revenue is used to create inputs into other systems, much of the money is reinvested in the business, but the shareholders will also benefit from the outputs. In 2013 this amounted to a direct output of 0.48 per share, equating to a dividend yield of 0.90%, the dividend reflects the good performance and a high level of profit to the company's achieved, with the revenue growth in 2013, compared to the previous year being 10.41%, and the net revenue increasing by 18.76% (MSN Money, 2014).

The performance of the organization, especially with 2013 providing a record year also creates another output in terms of the impact the performance. The performance of the organization, as well as the forward-looking statements made by management, will impact on the share price as a result of the influence on market expectations. Where the market expects the company to do well, demand for the shares increases, and the shareholders benefit as a result of an increase share price. This may be seen as an indirect financial output, but it is still one which impacts on shareholders. A stated goal of the organization was an aggressive growth strategy in order to increase revenues, this has certainly been achieved.

The primary purpose of an organization may be defined by its most apparent operations, in this case the retailing of food, and a primary purpose of its existence, which are the financial outputs. However, there are also other types of outputs, one of which is the communication message. The organization is an organization with a message, not only communicating marketing messages to attract customers to the company, but also with the content of the messages which include elements of education for the target market, which may provide increase knowledge and empower consumers to make better eating decisions, and support healthy lifestyles (Whole Foods Market, 2013). The same healthy communications are also targeted at the employees. The communication takes place at an organizational level, with the mission and values encompassing all elements of the company, but it is also an output can be observed at the group level. The company has been able to successfully differentiate itself, as seen with the high level of loyalty demonstrated by many of his customers.

The creation of stores may also be seen as another type of output. In 2012 it was stated that the organization was targeting a total of 1000 stores in the U.S., and at that time had 340 stores. By 2013, the organization had a total 362 stores, including presence in the United Kingdom and Canada. The company is growing; however the goal of 1,000 stores across the U.S. is not given within a specific timeframe. Therefore, the organization is moving towards this goal, and may be seen as successful, but there is still a significant gap between the current position and the desired position.

Outputs may also be seen as benefiting external stakeholders, such as local communities as well as partners with which they work. The company has contracts with large suppliers, but it also undertakes contracts with local farmers and producers, this is seen in the way that each store has local forages, whose job is to try and find local produce for the stores. Therefore, one output may be supported is provided for smaller local producers, which find it more difficult to compete with larger companies. The impact on communities can also be seen with the corporate social responsibility (CSR), including the company making charitable donations of approximately 5% of the after-tax profits, in addition to other CSR measures, which have included making loans available to producers to support fair trade, and the setting up of a number of different foundations and supporting healthy lifestyles.


Outputs at a Group Level

The group level outputs are reflective of the organizational systemic outputs, across many of the same areas. As an organizational level the company can be considered as in international organization, with operations not only in the U.S., but also in Canada and the UK. As a group level the organization can be considered at a micro rather than macro level, with the way in which each store operates, especially as the policies to provide managers are stores with a high level of empowerment in order to make decisions regarding what they stock, the way they market, and marketing with local communities. The group level output is very important to the organization as a company prides itself on a low level of corporate marketing budget, which in 2013 was less than 1% of revenues (Whole Foods Market, 2013). The output of the marketing efforts, including a public relations effort is each store are key to the success of the organization. This can be seen in the way that the individual group level communications efforts have included not only local marketing efforts, but also social marketing, with many of the individual stores starting up their own social networking strategies, such as Facebook. For example, the whole foods market in Colorado has in excess of 9,000 fans on Facebook, and the London branch has in excess of 22,000 fans, both of which have highly active Facebook with bilateral communication taking place (Facebook, 2014).

Just as individual stores may be seen as groups within the organization, departments that operate within the organization also groups. For example, the group outputs at store level concerning marketing may be seen as emulating the marketing department, which is highly active on social networking media, not only Facebook where they have accumulated more than 1.5 million fans, but also Twitter and Flickr. The human resources department also has a number of outputs, including effective training strategies and methods for ensuring that the have the skills that are needed. The human resource department has also developed a number of programs that provide benefits to employees, including the "total health immersion program" and the healthy discount incentive program," the outputs are direct help provided for the employees to maintain healthy lifestyles, and may also result in output of healthier employees. More than 16,000 employees are participating in these programs by the end of 2012 (Whole Foods Market, 2013). A significant benefit, and an output the benefits the company has been the result of these measures and the way they have increased health of the employees, reducing the level of absenteeism when measured on a year by year basis, as well as a notable reduction in the costs of medical care for inpatient stays (Whole Foods Market, 2013). General motivation theory indicates that where employees feel that they are important their employer, and that the employer cares, there will also be a higher level of motivation, which will increase the overall productivity per employee, so a group output as a result of the work of a single department has supported productivity (Armstrong, 2012).

At a community level there is also the ability to observe group outputs; a community level program saw the creation of the Whole Kids Foundation, which has the aim of supporting schools and inspiring families to better the nutrition and general health of children. Some specific outcomes have included grants given to school to establish salad bars to help with healthy eating; in 2010 alone 564 grants were given (Whole Foods Market, 2013). The funding for these was raised mostly at store level, collected from customers who shopped. This social cause may also create another output; the emotional feelings of satisfaction and beneficence…

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