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MANAGEMENT IN ACTION
THE DOWNFALL OF SEARS
Problem Solving Perspective
1. What is the underlying problem in this case from Edward Lampert’s perspective?
2. What are the key causes of Sears’ decline?
3. Do you think Lampert can turn the company around? Why or why not?
Kinicki/Williams, Management, 9e: Chapter 2 Management Theory: Essential Background for the Successful
Manager
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have to do something similar to when Sears went from catalog to storefront, but now
possibly something in the online arena.
Application of Chapter Content
1. What does the Human Relations Movement suggest went wrong at Sears?
2. Use the four parts of a system to diagnose the company’s decline. Provide support for
your conclusions.
Feedback: This is to be determined. We do know the company is closing stores in
reaction to its outputs. Is Sears going to change their business model?
3. To what extent did Sears use a total quality management perspective in running its
business? Explain.
Kinicki/Williams, Management, 9e: Chapter 2 Management Theory: Essential Background for the Successful
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Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
the time. Finally, the company did not use accurate standards to identify and eliminate
problems. For example, there is no evidence of the organization benchmarking against
companies like Amazon. Instead, Sears continued with its storefront strategy.
4. What key lessons from this chapter could Lampert have used to improve Sears’s
performance following the merger with Kmart? Explain.
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LEGAL/ETHICAL CHALLENGE
WHAT SHOULD YOU DO ABOUT AN INSUBORDINATE EMPLOYEE?
Solving the Challenge
1. Meet with Jim to review his behavior. Tell him that any more acts of insubordination will
result in termination. Don’t make a big deal about these events, and don’t include
documentation in his personnel file.
2. Put Jim on the list of people to be laid off. Although the company will have to pay him a
severance check, it reduces the chance of any lawsuit.
This will all depend on what the metrics are for laying off individuals. Here, it seems to
3. Call your human resource representative and discuss the legality of firing Jim. Jim was
insubordinate in hiring a consultant and irresponsible for not submitting his list of
potential employees to be laid off. If human resources agrees, I would fire Jim.
4. Reprimand Jim by putting him on a Performance Improvement Plan (PIP). This plan
outlines specific changes Jim needs to make going forward, and it gives him a chance to
make up for his poor decisions.
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Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
paying attention when you give him directives about cutting expenses, that may be
something you can work with him on through a performance improvement plan.
However, if you discover that Jim is purposefully being insubordinate and possibly
sabotaging the team, then you may not want to provide him with a chance to make up for
his behavior.
5. Invent other options. Discuss.
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TEXTBOOK EXAMPLES
EXAMPLE: Zappos Holacracy: A Success or a Failure?
YOUR CALL
1. Holacracy appears to be working at Zappos. Flat structures also work for other large
organization, such as W. L. Gore. Why do you think, then, that many organizations resist using
flat structures? Do you think studying management theory could help you answer this question?
Why or why not?
Try leading the discussion into a comparison of structures that reflect:
The Classical Viewpoint: Hierarchies that grow and grow and grow as companies continue to
seek efficiencies particularly from economies of scale. Ask students what advantages and
disadvantages this type of structure might offer. Holacracy eliminates most of the hierarchical
structure, flattening organizations, doing away with traditional departments and job titles.
The Behavioral Viewpoint: The emphasis shifted to motivating workers. Holacracies allow
workers to define their own jobs, to direct their own careers, to choose what they want to work
on, to act as an entrepreneur. Would this be motivational for workers? For the students?
2. Do you think studying management theory could help you answer this question? Why or why
not?
Students should be encouraged to consider the six practical reasons for studying theoretical
perspectives outlines:
1. To understand the present—How does a holacracy reflect current pressures?
2. As a guide to action—Could the company you work for implement such a radical structural
change?
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3. As a source of new ideas—What new ways of motivating workers would exist in a holacracy?
4. To understand management’s decisions—What would push a top management team to
consider such a step?
5. To understand what is going on in the outside environment—What are the pressures from the
external environment that are impacting your company?
6. To product positive results— Should you also consider what the negative results might be?
ADDITIONAL ACTIVITIES
1. Have students go to https://www.holacracy.org/ and watch the 5-minute video on the home
page.
You can also ask them to click on “What is Holacracy” at the top of the home page and read the
material.
Ask them:
What are the pressures that drove these companies to consider holacracy?
How do employees seem to be reacting to this structure?
What do they see as the positive outcomes for themselves?
What are the positive outcomes for the companies that have adopted holacracy?
2. Have students view videos or read articles prepared by and about Zappos (see the list with
links below). Follow this with a discussion of what students feel about elements of holacracy:
what scares them about working in such an environment? What would motivate them about
working in such an environment? What do they see as the most positive and most negative
aspects of holacracy.
July 2015
Here’s What Happened to Zappos’ HR Boss When the Company got Rid of Managers—
Business Insider, Feb 2016
Banishing the Bosses Brings Out Zappos’ Hidden Entrepreneurs—Forbes, Apr 2016
The Zappos Holacracy Experiment—Harvard Business Review, Jul 2016
Return.
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VIDEO
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ARTICLES
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VIDEOS
Kinicki/Williams, Management, 9e: Chapter 2 Management Theory: Essential Background for the Successful
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EXAMPLE: Application of Behavioral Science Approach: The Open-Plan Office—
Productivity Enhancer or Productivity Killer?
Organizations began experimenting with open-plan office spaces in the 1950s, and up to 80
percent of offices today utilize this idea. The question to be answered is: Do open-space floor
plans actually contribute to better communication, higher productivity, and better interpersonal
relations? Are the potential benefits outweighed by noise (both audio and visual) and lack of
privacy?
YOUR CALL
1. If so, many U.S. employees now work in open offices, yet behavioral science studies largely
show they are not a productive or beneficial arrangement, why do you suppose they continue to
be so prevalent? What kind of office arrangements do you think would work best and why?
Have students utilize the ideas of Munsterberg, Follett, Mayo, Maslow, and McGregor to
analyze why the open-office plan became so popular.
2. What kind of office arrangements do you think would work best and why?
Lead students to discuss the layouts in the offices where they work. Can they imagine working in
an open plan office? Would they enjoy it? Why or why not?
ADDITIONAL ACTIVITIES
1. Have students watch this video “The Origins of Our Open Office Hellscape.” Then have them
answer a series of questions, either individually or in groups:
What was the basic idea behind open offices?
What was right about early open offices?
What went wrong? (you might have them compare Frank Lloyd Wright’s concept with
todays’ office plans.)
2. Have students watch the following video: 4 Tips to Keep You Sane at the Open Space Office.
ONLINE
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Kinicki/Williams, Management, 9e: Chapter 2 Management Theory: Essential Background for the Successful
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EXAMPLE: Operations Management at Intel
Intel is an example of a company that emphasizes effective operations management in the search
for efficiency and productivity in all areas of the company: quality control, scheduling, inventory
management, and supply chain management.
YOUR CALL
In Chapter 1, we described the problem of “efficiency versus effectiveness.” Does it seem that
Intel has chosen efficiency over effectiveness, or does it demonstrate both?
ADDITIONAL ACTIVITIES
1. Have your students read 10 Supply Chain Disasters.
2. Individually, or in groups, have them answer the following questions, then lead a class
discussion comparing their answers.
Which of these 10 do you think was the worst disaster? Why?
What similarities do you see in the cause of the problems?
What is the most important thing you learned reading these?
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Kinicki/Williams, Management, 9e: Chapter 2 Management Theory: Essential Background for the Successful
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EXAMPLE: Do Nudges Achieve Results? Using the Systems Viewpoint to Find Out
This example looks at the outcome to student loan repayments in a closed vs. an open system.
Borrowers missed payments in the closed system where they did not have access to information.
YOUR CALL
Can you think of an idea in which you’d like to try small nudges?
Keeping track of medical appointments may be good to try small nudges on. For example, what
ADDITIONAL ACTIVITIES
1. One way that you can build on this Example is to have the students watch the CBS Sunday
2. Discuss why emphasizing the threat of a curse for removing petrified wood might have
backfired for the park.
4. The number of visitors to U.S. national parks has increased dramatically over the last several
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Kinicki/Williams, Management, 9e: Chapter 2 Management Theory: Essential Background for the Successful
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EXAMPLE: The Contingency Viewpoint: Manufacturers Pitch Parents to Recruit Their
Kids
This Example discusses how some companies facing labor shortages for key, technical jobs are
YOUR CALL
1. Are there any downsides to their appeal to parents? What other contingency approaches can
you suggest to help solve their recruiting problem?
Students may respond with ideas such as:
2. What other contingency approaches can you suggest to help solve their recruiting problem?
First: review with students why this example reflects contingency theory. Ask them:
What are the contingencies in this situation?
Whose viewpoints do the contingencies reflect—the company? The parents? The
students?
Next, have them make suggestions of other ways companies can solve their recruiting problems.
Here is an additional article about creative recruiting in case students are curious or you want
some interesting additional facts: HR Gets Creative to Hire Manufacturing Workers.
ADDITIONAL ACTIVITIES
Have students read Why the Traditional 4-Year Degree Isn’t Cutting It Anymore. Break the
students into groups and have them discuss the following questions. Then lead a class discussion
comparing their answers.
What do you see as the pros and cons of a four-year degree?
How much do you know about paying back your student loans?
What career do you want? How will your major prepare you for that career?
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Kinicki/Williams, Management, 9e: Chapter 2 Management Theory: Essential Background for the Successful
Manager
TEXTBOOK PRACTICAL ACTIONS
PRACTICAL ACTION: Evidence-Based Management: Big Data
Big Data refers to vast, complex data sets that companies are mining to spot trends and help with
YOUR CALL
Do you think the application of Big Data could stifle managers’ creativity?
First have students recall that creativity is one of the soft skills employers often look for when
hiring.
Before discussing this question, have students watch Is Big Data Killing Creativity. This is a 14-
minute TedX talk by Michael Smith at Harvard College.
ADDITIONAL ACTIVITIES
How is Big Data being used in knowledge construction? Assign Is It Too Late for Big Data
Ethics? This looks at the use of Big Data in academia. This would be a particularly appropriate
article and discussion if you have students interested in doing research while in college or
interested in a research-based career.
After students have read this article, ask:
Is it too late? Do you agree or disagree with this article?
Can different paradigms about replicability be reconciled?
What does this article suggest about how research is being done vs. how it
“should” be done?
For a more business-focused discussion of the ethical use of Big Data, assign 6 Ethical Questions
About Big Data.
After students have read this article, ask:
Do you think the six questions presented are enough?
Which is the most important?
What should be done about companies that misuse Big Data?
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Kinicki/Williams, Management, 9e: Chapter 2 Management Theory: Essential Background for the Successful
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This article may shock students and get them wondering about their own personal privacy, about
what they want companies to know about them, and how to protect their own data from Big
Data.
Return.