JC Penney Management Styles: Evolution and Challenges
This paper analyzes the management evolution of JC Penney, one of America's largest retail chains, from its founding in 1902 through its modern challenges. It evaluates two key shifts in management style, the transition from catalog-based to internet retailing, the use of celebrity spokespersons as a marketing strategy, and the organizational impacts of these decisions. The paper also proposes a customer relationship management initiative as an innovative solution and predicts the company's ability to adapt to changing market conditions. Structural recommendations, including decentralization and improved HR policies, are offered as pathways to sustainable growth and renewed employee and customer trust.
- Introduction to JC Penney's Management History: Company background and century-long management overview
- Key Changes in Management Style Over Time: Shift from internal promotions to external CEO hires
- Transition from Catalog-Based to Internet Retailing: Management role in moving to e-commerce by 1998
- Celebrity Endorsements as a Marketing and Management Strategy: Impact of celebrity branding on target market expansion
- Innovative Ideas to Improve Employee and Customer Experience: CRM implementation and bottom-up change management proposal
- Predicting JC Penney's Adaptability and Recommended Structural Changes: Decentralization and HR reform as keys to recovery
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What makes this paper effective
- The paper is organized around specific analytical questions, giving each section a clear purpose and allowing the argument to progress logically from historical overview to forward-looking recommendations.
- It balances historical context with critical evaluation, drawing on named executives and documented decisions to ground its claims in real organizational events.
- The recommendation section is actionable, proposing a specific CRM initiative with implementation steps rather than vague general advice.
Key academic technique demonstrated
The paper demonstrates structured case-study analysis, using a question-and-answer format to organize multiple dimensions of a single organization's performance. Each section builds on the preceding one, connecting historical management decisions to current outcomes and future prescriptions — a common technique in business management coursework that trains students to apply theory to real-world organizational scenarios.
Structure breakdown
The paper opens with a brief company overview before addressing five distinct analytical questions in sequence: management style changes, the catalog-to-internet transition, celebrity branding decisions, an innovative employee/customer proposal, and a structural prediction. Each section is self-contained but contributes to a cumulative argument that JC Penney's struggles are rooted in poor change management and can be addressed through decentralization, better HR practices, and CRM adoption. A references section closes the paper.
Introduction to JC Penney's Management History
JC Penney, one of the largest retailers in the United States, was founded in 1902 by James Cash Penney. At its inception, the company owned three department stores. It has since grown to own and operate a chain of more than 1,050 department stores across the country (Hoover's Company Profile, 2014). Throughout more than a century of operations, the company has witnessed many changes in management and operations, all directed at making its stores more widely accepted and valued by consumers (Ostlund, 2012).
The company has undergone a drastic shift from being a value retailer to a customer-driven retailer in order to win customer loyalty and stand out in an increasingly competitive market. The company has also shifted its promotion and marketing strategies considerably. Over those 112 years, JC Penney adapted itself to the needs of the market and its customers — changes that sometimes worked to the company's benefit and sometimes backfired. Management played a central role in designing and implementing these changes (Ostlund, 2012).
The role played by management, and its impact on the company under varying circumstances, is discussed and evaluated in the sections that follow.
Key Changes in Management Style Over Time
The company has gone through major changes in operations and management over its hundred-plus years of operation. Some of these changes were necessary for survival, while others were more incremental. During those years, the company experienced a dramatic evolution in its management approach. Initially, management and top positions were offered to individuals who had been part of the company for years and had witnessed its growth firsthand. With the beginning of the twenty-first century, however, JC Penney shifted toward hiring CEOs from other established companies as a method of survival and growth (Hoover's Company Profile, 2014).
The hiring of Bill Ackman, Ron Johnson, and Mick Ullman, among others, exemplifies this shift. Each of these CEOs brought a different management style with them, yet the similarity among all three is that they ultimately failed. The management style during the era of James Cash Penney as chairman and senior chairman saw the company grow alongside its employees. Management occupied top positions while the company embraced change and new technology with the input and consideration of its workforce (Hoover's Company Profile, 2014).
Today, the management of JC Penney falls short in several key areas, the most important being the proper formulation and implementation of strategy. Although the company is changing drastically — from organizational culture to the products it offers — employees are not satisfied, and they do not trust their management. There is also a clear lack of effective communication from the management side (Bhasin, 2013).
Transition from Catalog-Based to Internet Retailing
JC Penney launched its catalog-based retailing operations in 1962 and continued to operate them successfully through the late 1980s. However, in the late 1980s and early 1990s, the company's department store operations began to face difficulties, particularly due to rising costs and intensifying competition. James E. Oesterreicher, who became president of the company in 1991, closed many of the company's underperforming stores and initiated internet-based retailing as a way to expand the company's catalog sales. Internet-based retailing reached its full form by 1998, when JCPenney.com was transformed into a full-scale sales channel (Hoover's Company Profile, 2014).
The company and its management encountered significant difficulties during this transition, which is evident both from the sales figures and from the length of time it took to develop a fully functional internet retail platform. In the first year of implementation, the company earned revenues of only $15 million from online sales; that figure reached $102 million for the year ending January 2000. This dramatic increase demonstrates that the company slowly but successfully moved toward becoming an internet retailer (Hoover's Company Profile, 2014).
This step also reflects the company's broader management approach of embracing technological developments and leveraging them for competitive advantage.
References
Bhasin, K. (2013). JC Penney's senior management team knows there's only one way out of this mess. Business Insider, March 18.
Bhasin, K. (2013). Inside JC Penney: widespread fear, anxiety, and distrust of Ron Johnson and his new management team. Business Insider, February 22.
Chernev, A. (2012). Two questions haunting J.C. Penney. Retrieved from http://www.businessweek.com/articles/2012-08-13/two-questions-haunting-j-dot-c-dot-penney
Daft, R. L. (2012). Management. South-Western.
Denning, S. (2013). J.C. Penney: was Ron Johnson's strategy wrong? Forbes, September 4.
Guinto, J. (2011). The problem with J.C. Penney. D Magazine, September.
Hoover's Company Profile. (2014). J.C. Penney. Retrieved from
Levy, M., & Weitz, B. A. (2012). Retailing management. McGraw-Hill/Irwin.
Lublin, J., & Mattioli, D. (2013). Penney CEO out, old boss back in. The Wall Street Journal, April 18.
Martin, R. (2013). Memo to JC Penney: execution is not strategy. Harvard Business Review.
Nash, M. (2013). What J.C. Penney can teach us about change management. Retrieved from http://mylinkage.com/blog/what-j-c-penney-can-teach-us-about-change-management/
Ostlund, A. (2012). JC Penney strategic marketing plan 2012: product strategy. Master of Science thesis.
Rotman, S. (2013). JC Penney's misfire: what went wrong? Forbes, June 24.
Talley, K. (2012). J.C. Penney trims headquarters staff. The Wall Street Journal, April 5.
The unfortunate union between Bill Ackman and JC Penney is over. (2013). Jewish Business News, August 15.
Tuttle, B. (2013). The 5 big mistakes that led to Ron Johnson's ouster at JC Penney. Time.
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