Organizational Behavior the Transformation of JC Penny Essay

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Organizational Behavior

The Transformation of JC Penny for the New Century

Organizational behavior is the study of how the actions of individuals, groups, and structures influence the behavior of an organization. Organizational culture refers to the characteristics that define the organization and make them unique. Organizational culture refers to communication styles, management styles, interaction styles, policies and procedures, as well as the manner of dress within the organization. Organizational culture influences organizational behavior in many ways. Organizational behavior produces outcomes that lead to the success or failure of the business. This research will explore that organizational behavior of the JC Penny Company.

Many studies on organizational behavior focus on the failures of the business in relation to organizational behavior. However, this research takes a different approach and will focus on a company that is been around for 100 years. It will explore organizational behavior within the JC Penny Company and how it has used organizational behavior to leverage its position into achieve longevity. Companies that have been around for 100 years are rare and we can learn much from studying their organizational behavior and how it has helped them to remain in business for so long.

Company Background

The JC Penny Company was founded in 1902 by James Cash Penny and William Henry McManus (History of Business). It began as a dry goods store in the booming mining town of Kemmerer. The first name of the store was The Golden Rule. By 1912 there were 34 Golden Rule stores. The following year JC Penny took a majority ownership of the chain and changed the name to JC Penny. By 1917 there were over 175 stores (History of Business). The chain continued to expand rapidly as store managers were allowed to open new stores and keep a quarter of the profits as soon as their store became profitable. This was a simple expansion concept that worked to make it one of the biggest retailers in the country by 1970. The original store in Kemmerer was still operational as of 2007 (History of Business). The greatest expansion for JC Penny was during the 1950s and 1960s in the post-war boom. America moved to the suburbs and JC Penny established itself as an anchor store in malls across the country (History of Business).

Problem Statement

This research will address the problem of how JC Penny has adjusted its organizational behavior to respond to changes in society, making it one of the longest lived retail chains in the United States. It will focus on how Myron Ullman's changes from an authoritarian style of leadership transformed the company to one that engaged the employees and had an impact on the profitability of the company.

Introduction to the Topic

JC Penny began as one store located strategically where there was a need for certain goods. Today, JC Penny stores are located in suburban shopping malls, but that was not always the case. At one time, most JC Penny stores were located in downtown areas of large urban centers (History of Business). The most recent trend in retail stores is opening stand alone stores. JC Penny is currently jumping into this trend slowly. JC Penny is now an Internet retailer as well (History of Business). These adjustments to changing retail trends have meant significant institutional changes within the corporation. Over the past hundred years they have had to adjust and readjust their corporate strategy and corporate behavior to survive ever changing times.

JC Penny's has always had one of the largest catalog businesses in the retail industry. Sears was its only real competition in the catalog business for many years. JC is now one of the largest apparel and home furnishings websites on the Internet with nearly one billion dollars in annual sales (History of Business). JC Penny currently faces stiff competition from big box retailers like Wal-Mart andTtarget. This has forced JC Penny into private brands such as St. John's Bay, Worthington, and Arizona Jean Company (History of Business).

This has meant changing markets once again from the general retail audience to a niche market focusing on product differentiation through the select brands that it offers. With so many other major rtrailers having to take the same or similar actions, the future of the retailer may come into question. This latest move in response to the actions of big box retailers represents a change in organizational behavior and strategy. This research will explore the effects of this change on JC Penny's ability to remain competitive in this new and changing market.
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Context of the Problem

This latest development is perhaps one of the most drastic changes that JC Penny has had to adjust to its entire history. In the past, changes focused on the physical stores themselves. Previous changes were from downtown areas to suburban malls and more recently to standalone stores. However, the product offerings and range of products remained constant. This most recent change in the market is forcing JC Penny to not only change where and how it does business, it is forcing it to rebrand its entire product line up. In addition to sweeping changes in the brands that it offers and product offerings, JC Penny has also changed its company logo as well (Damas and Schendel, 2012). However, it takes more than marketing to achieve success in a world of increasing competiton. This research will explore how these changes in organizational behavior will affect the company and its ability to remain competitive in a marketplace that is characterized by increasing competition.


The purpose of this study is to examine the organizational behavior of JC Penny in response to societal changes in past. It will help researchers to gain an understanding of how organizational behavior at the JC Penny Company is related to its ability to respond to changes in the retail industry successfully. By understanding how organizational changes have affected JC Penny's ability to remain sustainable throughout sweeping societal changes including two world wars, researchers will gain a better perspective on how other retailers can utilize this information to adjust their own organizational behavior to achieve greater sustainability.

The objective of the study will be to examine the current changes and re-branding strategy of JC Penny and to make predictions as to how these changes will affect JC Penny's success in the future. JC Penny is not the only retailer in the industry to be undergoing dramatic changes. One of the key objectives of this study will be to examine the similarities and differences of JC Penny strategy and to gain a perspective on the overall changes within the retail industry.


This research will involve historical information about overall organizational behavior and strategy. Only limited information is available to the public, particularly documents as to the reasons for the strategy. Much of the information will be corporate sensitive information and will not be available outside of the company. Therefore, the research method used for this study will entail collection of information from a variety of sources. These will include internal documents where available, financial statements, media sources, journal articles, and other academic sources. Any internal documents that are available and that relate to the purpose and objectives of the study will be included as well.

The availability of information for the study and the type of information available place a several limitations on the ability of the study to draw conclusions regarding organizational behavior. Much of the information will be speculative, as organizational behavior was not the topic of concern in the past. Companies did not keep or track information organizational behavior until recently. However, it is expected that from the information available, organizational behavior can be deduced from it.

This research will attempt to examine current theory theories and organizational behavior and apply them to the company in question. Theories will provide a framework with which to examine organizational behavior. Organizational behavior differs from strategy in that organizational behavior is associated with individual behavior, rather than the aggregate that becomes organizational strategy. Therefore, the actions of individuals will be considered in light of the study, when this level of information can be found.

This research is a qualitative study and is bound by the limitations of qualitative studies as such. For instance, the potential for researcher bias in the gathering and interpretation of the information is always a possibility. The researcher will keep this in mind as they gather the information and interpret it. It is expected that if the researcher keep this in mind, then the results of the study will be unbiased and will reflect the marriage of organizational behavior theory and the behaviors within the JC Penny Company that allowed it to remain a viable company for 100 years.

Literature Review

Organizational behavioral theory has only recently begun to be recognized as a discipline unto itself. Organizational behavior has been historically tied to organizational culture. If however, culture refers to the collective actions of the company, whereas organizational behavior refers to the behaviors of…

Sources Used in Documents:


Anderson, G. Culture Change Part of Penney's Plan to Succeed. March 28, 2006. [online] Available from: Accessed April 29, 2012.

Buchanan, D. 2004. Organizational Behaviour: An Introductory Text. Financial Times / Prentice Hall.

Chaneta, I. n.d. Organizational Behavior. Journal of Comprehensive Research 8 (13), pp. 13.

Damas, J. And Schendel, R. 2012. JC Penny Re-brands…again. Labelscar. The Retail History Blog. [online] Available from: Accessed April 29, 2012.

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