Kohl's vs. JC Penney: Organizational Culture Compared
This paper compares the organizational cultures, business strategies, and employee benefits of two major U.S. department store chains: Kohl's and JC Penney. It examines how Kohl's centralized, associate-focused culture enabled gradual, sustainable change while JC Penney's aggressive transformation under CEO Ron Johnson alienated both employees and customers, destabilizing its organizational culture. The analysis draws on each company's approach to culture change, compensation, and strategic decision-making to argue that respecting existing culture and managing change incrementally produces better long-term outcomes than rapid, top-down disruption.
- Kohl's Corporate Culture and Structure: Centralized culture focused on associate engagement
- Kohl's Business Strategy and Employee Benefits: Passive strategy, market-competitive compensation package
- JC Penney's Cultural Crisis and Strategic Missteps: Johnson's rapid changes alienated staff and customers
- JC Penney's Business Strategy and Benefits: Aggressive strategy clashed with conservative workforce
- Comparative Analysis: Two Paths Through Change: Gradual change preserved Kohl's culture; JC Penney's collapsed
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What makes this paper effective
- Uses a direct side-by-side comparison structure that makes contrasts between the two companies clear and easy to follow.
- Grounds abstract concepts like "organizational culture" and "change management" in concrete business events, such as Ron Johnson's tenure at JC Penney, making the argument accessible and credible.
- Moves logically from description to analysis, saving the synthesis for the final section where the implications of each company's choices are evaluated together.
Key academic technique demonstrated
The paper demonstrates comparative case analysis: two companies facing similar external pressures (declining retail markets, aging customer bases) are placed side by side, and their divergent responses are used to isolate the variable under study — approach to culture change. This technique allows the writer to draw causal conclusions about which strategy produced better outcomes without relying on experimental data.
Structure breakdown
The paper opens with a detailed profile of Kohl's culture, transformation history, business strategy, and benefits. It then profiles JC Penney across the same dimensions. The final section synthesizes both profiles into a comparative analysis, arguing that Kohl's gradualist approach preserved organizational culture while JC Penney's aggressive transformation destroyed it. The parallel structure across both company profiles makes the closing comparison easy to follow and rhetorically persuasive.
Kohl's Corporate Culture and Structure
Kohl's maintains a centralized corporate culture, meaning that the head office sets the overall cultural direction for the entire organization. The reason for this approach is that roles within the company do not vary significantly from one store to another or from one warehouse to another, making geography largely irrelevant. This consistency makes it possible to create a unified corporate culture that can be transmitted from the head office across the country. Individual store managers are responsible for implementing the culture within the parameters set by the head office, and while limited physical oversight allows for some regional variation, the culture is fundamentally defined and driven from the top down.
A key element of Kohl's culture is its focus on associates — the front-line workers who make up a large percentage of the workforce. Crucially, associates are the employees who interact directly with customers. Because of this, it is important that associates are treated well and positioned to succeed when representing the company. In retail, disengaged associates quickly and visibly affect sales, making employee engagement a strategic priority rather than merely an HR concern.
One notable aspect of Kohl's culture is that it underwent a significant change approximately ten years ago. Management recognized that the organizational culture had grown somewhat outmoded and undertook a deliberate transformation over an extended period. The impetus came from a head-office realization that the company needed to update its business model, but that doing so would require working around — rather than against — company veterans (McNulty, 2007). These veterans were culture carriers who actively reinforced the existing Kohl's culture. Because they comprised a large portion of the workforce, transforming the organizational culture without their engagement was considered difficult if not impossible.
Kohl's Business Strategy and Employee Benefits
Kohl's business strategy would generally be characterized as passive. The company operates a large, stable business that benefits more from careful maintenance than from aggressive disruption. Strong strategic shifts in any direction are uncommon and would represent a significant shock to the system. Organizational culture thus plays a supporting role in strategy: when workers are well cared for and satisfied, they become effective ambassadors for the company to its customers. This has a positive and self-reinforcing impact on sales.
In recognition of the need to attract and retain high-quality talent in a competitive retail environment, Kohl's offers a package it considers market-competitive. According to the company, this includes comprehensive health and insurance benefits, retirement planning support, and career benefits such as progressive education assistance and career pathway guidance (Kohl's, 2017). The company does not publish granular details publicly because benefit packages vary by level within the organization and are subject to individual discussion. On the whole, Kohl's is not believed to offer above-market compensation, nor is it believed to offer below-market compensation — the package appears to sit at a reasonable industry standard.
JC Penney's Cultural Crisis and Strategic Missteps
JC Penney presents a stark contrast to Kohl's in how it managed organizational culture. The company hired a CEO who sought to reform the business rapidly, and in doing so alienated a large portion of both its customer base and its workforce. The result was plummeting sales and a prolonged organizational crisis from which the company has struggled to recover. Part of the underlying problem was that the existing culture had grown complacent over many years — most employees, and indeed many customers, had been with the company for a long time. This meant that neither group felt particular pressure to innovate or work with urgency. Senior management identified this as a problem and decided to act, but by that point the company had spent years attracting and retaining a certain type of worker — one who had little appetite for disruptive change. Management did virtually nothing to build buy-in from existing employees before embarking on the transformation (Bhasin, 2013).
The cultural change was compounded by the fact that it coincided with significant job cuts. The CEO, Ron Johnson, had previously worked at Apple, and brought a Silicon Valley mindset to a very different type of organization. High-paid technology workers can generally weather layoffs and land on their feet; JC Penney's workforce could not. Johnson appears to have underestimated this reality. The result was that employees began to see change itself as a threat rather than an opportunity, and a negative organizational culture took hold.
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