JCPenney underwent a major turnaround in the late 1990s and early 2000s led by CEO Allen Questrom and COO Venessa Castagna to remake its rigid organizational culture. They implemented initiatives like relaxing the dress code, ending the "office police", emphasizing work-life balance, and introducing an open door policy. These changes improved employee job satisfaction and engagement. As a result, JCPenney saw increases in operating profits, stock price, and lower employee turnover as the new culture attracted and retained talent. Leaders learned that top management commitment is vital to cultural change and that focusing on employee happiness leads to happier customers.

1. CASE PRESENTATION
REMAKING JCPENNEY’S
ORGANISATIONAL CULTURE
GROUP MEMBERS:
ABHISHEK KUMAR
DEEPSHIKHA
MAYANK NARANG
PRIYANKA DUGAR
SHIVANI TAMOTIA
URMI MOGRA

2. JCP- AN INTRODUCTION
1902
• Set up by James Cash Penney
• Partnership with Thomas M Callahal & William
Guy Johnson
1907
• Bought partner’s stake
1920
• 312 stores in 26 states

3. 1924
• Incorporation as JCPenney Company
1930
• 1452 stores, 25000 employees denoted as Associates
1951
• Revenue: US $ 1 Billion
CONTD…

4. CONTD…
1964
• Revenue: US $ 2 Billion
1990’s
• Competition from WALMART & Dillards
2000’s
• COO: Vennesa Castagna
• Chairman & CEO: Allen Questrom
• In 2004, Mike Ullman succeeded Questrom

5. TURNAROUND AT JCPENNY
Till 1998 : Decentralized Merchandizing
1990s : Retail Scenario in US changed
1999-2004 : Turnaround orchestrated
by Questrom and Castagna

6. EXISTING CULTURE

7. Formal & Rigid Structure
Absence of Open Door
Policy
Prominence of
Managerial Ladder
Strictly Formals
Office Police
Motto: ‘The Penney Idea’
Also known as HCSC

8. INITIATIVES TAKEN

9. No Abrupt Changes
Appointed Theilmann as Executive
VP
Long Term Plan – “Making
JCPenney a great Place to Work”

10. Launch of “Just Call Me Mike”
campaign
Relaxation of Dress Code
Disbanding of Office Police

11. Introduction Of Afternoon Offs on
Fridays
Emphasized the word ‘PEOPLE’
Issue of New Security Badges

12. Launch of Winning Together
Principle
2005: First Associate Engagement
Survey, First Christmas Party
Leadership conferences for Store
Managers

13. Implementation of Open Door Policy

14. TRAINING & DEVELOPMENT
Identification of ‘Hypos’
Establishment of Retail Academy , 2006
Harnessing IT in Training
 Brand Repositioning as “Everyday Matters”

15. LEADERSHIP STYLES

16. Enforcer Visionary
Deal Maker
Serial
Entrepreneur
Administrator

17. RESULTS
 Increase in Job Involvement by 6% in 2006
 Increase in operating profits by 22.5% in 2005
 Qualitative Talent attracted
 Further Increase in Profits by 17.8% in 2006

18. CONTD…
 28 New Stores
 Hike in Stock prices by 10 Times
 Improved Job Satisfaction
 Low Employee Turnover

19. LEARNINGS

20. ABAD’S MODEL

21. OTHER LEARNINGS
 Commitment of Top Management Vital in Culture Change
 Participative Approach
 Job Satisfaction Not a Function of Monetary Incentives only
 Happy Employees make Happy Customers
 Emphasis on Job-Misfit Theory