Reference no: EM132823233

CASE STUDY 1:1

The annual holiday shopping season typically begins on the Friday after Thanksgiving, known by retailers and consumers alike as "Black Friday." In recent years, however, some retailers such as Walmart, Target, and Macy's have moved up the start of their shopping season to Thanksgiving Day, which has caused much debate about making employees work on a holiday typically spent with family and friends. In 2015, specialty outdoor retailer Recreational Equipment Inc. (REI) bucked the holiday shopping trend all together. The company announced it would not only close its stores on Black Friday, but would also pay its almost 12,000 employees to take the day off and "go outside." REI also told consumers that online purchases made on the company's website would not be processed until Saturday of the extended holiday weekend, allowing all of its employees to #OptOutside. Reaction to REI's unusual strategy was overwhelmingly positive. And according to retail analysts, the company's decision to close its brick-and-mortar stores on Black Friday increased its online traffic dramatically-26 percent from the previous year-a win-win for both the company and its employees. REI has been ahead of the curve on sustainable business practices and exceptional employee benefits for many years. Based in Kent, Washington, the company began in 1938 when Lloyd and Mary Anderson formed a cooperative to share outdoor gear with some of their mountain-climbing friends. A total of 23 people each paid $1 to join. Fast-forward 75 years, and the retailer is the nation's largest consumer cooperative. Consumers join as members (currently $20 for a lifetime membership) and receive 10 percent back on purchases they make in stores or online as part of an annual dividend. REI has more than 6 million active members and more than $2.4 billion in annual revenues. The company's employee-friendly culture is not new. In the early 1960s, the company began providing employees and their families with health care benefits and implemented a profit-sharing program soon after. By the mid-1970s, REI launched a philanthropy program to support outdoor recreation, donating more than $40 million to date to projects on public lands. More than 20 years ago, in 1996, REI launched the largest outdoor gear and apparel store on the Internet. And REI is one of only 12 companies that have made Fortune's "100 Best Companies to Work For" list every year since it started back in 1988. Several years ago, REI started giving employees two "Yay Days" on an annual basis. A "Yay Day" is an extra paid day off when employees are invited to try something new, challenge themselves in a favorite activity, or work on an outdoor stewardship project. This additional paid time off allows staffers to reconnect with the outdoors in an effort to gain knowledge they can share with REI customers. And sharing their "Yay Day" experiences on social media helps employees provide REI with great marketing exposure to attract more job seekers and potential customers to the company and its employee-friendly culture. More than 1,200 photos were posted on Instagram tagged #REIYayDay. Unlike some companies, REI works hard to retain its employees. The company would like employees to spend their entire working career with the organization. In 2015, REI funded $60 million in incentive plans and profit-sharing contributions, giving every eligible employee an automatic 5 percent company retirement contribution into their 401(k) accounts, along with an additional 7 percent profit-sharing contribution. These business strategies all support the company's core mission of providing more people with greater access to the outdoors while promoting environmental and social stewardship. REI also gives back to the outdoor community by investing millions of dollars in more than 300 nonprofit organizations around the country. The company's CEO, Jerry Stritzke, says REI's success reflects the appeal of life outdoors. "We have focused hard on giving our members great gear and expertise," he says, "and we are saying a big thank you by investing more in the work our nonprofit partners do for our members and the outdoor community."

Questions:

1. Six major environmental forces have been identified as reshaping management. Which three are having the greatest impact and why?

2. Which were the top two forces operating in the case of Recreational Equipment Inc (REI)?