Case Review: Nordstrom: Dissention in the Ranks?

From Harvard Business School.

Built on great customer service, hard work and employee commitment, Nordstrom became one of the top retail stores.  The company was started in the early 20th century and survived through a couple of generations of the Nordstrom family.  By the time this case was documented, many of the practices of the company were called into question.

The interesting subtext of this case is about how a company did not adjust to cultural changes.  When the company was founded there were few labor laws and people tended to work a great deal and often with little pay.  Over time, the company maintained the same level of expectations while the culture moved in the direction of labor unions and more restrictions on how companies can treat their employees.  By the late 1980’s, the company was completely out-of-step with our culture.

The consequence for Nordstrom was legal findings against them for breaking modern labor laws.  Essentially, Nordstrom was found to be mistreating its employees by creating a culture where the employees were not paid for all their hours worked and creating a stressful environment where employees felt they had to break the company rules in order to keep their jobs.

Ultimately, what Nordstrom did was induce behavior in its sales force where sales people would not report activities correctly and even “steal” from other employees by taking credit for their sales.  It is very possible the Nordstrom was able to make more money as a company, but in the end company practices cost them much.

Explore posts in the same categories: BADM 720 - Organizational Behavior

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