CHANGE MANAGEMENT

Change Management at J.C. Penney

Change Management at J.C. Penney

Introduction

Change management is an organized practice whereby an organisation responds to and adapts to the forces in its micro and macro environment in order to increase its effectiveness and ensure its survival. In short, managing change is all about moving an organisation from its existing position to some preferred future condition. Advances in technology drive change throughout organisations. We can broadly define technology as the set of processes the organisation uses to transform inputs into outputs; that is goods and services. Innovation and advances in technology continually affect organisations and how they do business and compete. The speed of innovation is reshaping the way we work, learn, play, and communicate. Apart from technology, leadership plays a vital role in determining the future of the organization. In order for a poor performing organization to perform well, transformational leaders are needed who can change the scope of the organization and lead it towards success(Ristino, 2000, pp. 54-56). JC Penney is one of the top retailers. It offers a variety of jewellery, home furnishings, family apparel, accessories and shoes, through a chain of department stores and the e-commerce website JCP.com. This paper looks at the changes Johnson implemented and alternatives that could have led to better results.

J.C. Penney

JCP is a retailer which operates department stores selling apparel, home ware, accessories & handbags, shoes, toys, watches & jewelry, and more. JCP also offers a number of services at its stores, including salons, wedding and gift registries, custom decorating, portrait studios, and optical services.

In 1902, James Cash Penney opened The Golden Rule Store, based on the idea of treating customers "Fair and Square". The name was changed in 1913 to J.C. Penney Company (JCP). The company grew quickly, and the 500th JCP store was opened in 1924. By 1928, there were over 1,000 JCP stores. In 1973, JCP reached a high of 2,053 stores. As of January 2012, JCP operates 1102 stores. The company currently employs 159,000 full- and part-time associates (Bhasin, 2013).

Ron Johnson

Ron Johnson from Apple Inc. joined US retailer J.C.Penney in November 2011, following a year of financial troubles for the company; an overambitious earnings outlook had caused shares in the company to fall by 5%. Ron Johnson pioneered the concept of Apple retail stores, leading to a boom in Apple's revenues. He was a Senior Vice President (Retail Operations) there (Hodgkins, 2011). When Johnson joined as chief executive officer (CEO), he transformed the company in an attempt to save $900m by 2013 and turn the company into “America's favorite shopping destination”. Although the company performed well in the 2010 financial year, the company wasn't prepared for high gasoline and cotton prices, and experienced revenue decline in 2011. Since the changes were put into place, however, the company has experienced significant decline in revenues.

Ron Johnson was a Senior Merchandising Executive at retailer Target Stores, before moving to technology giant Apple Inc. in 2000. Johnson is largely credited with having introduced Apple's retail store ...