JCPenney Company: Approach to Diversity

Abstract

Globalization has made the business a tedious venture since competition comes from all quarters. Diversity is one of the approaches employed by companies to handle the pressures of the contemporary business arena. JCPenney embraced diversity quite early and has stuck to the principles, but it has still experienced several upheavals in its operations. This research paper thus sought to evaluate JCPenney’s experience with diversity to establish if it added any value to the company’s operations. The paper established that despite the company’s approach to diversity issues, it still encountered problems that could only be solved by revamping the company. Therefore, although diversity cannot entirely be ignored, it only served to give the company an endearing look to the customers, stakeholders, and employees, but it could not do much to save the company in times of distress. The company’s future still seems uncertain, and thus it needs a careful management approach to steer it back to its lost glory.

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Introduction

Technological advancement has opened up the global market so that traditional niche markets are today open to all people. This change has forced organizations to audit their operational processes to eliminate impediments that have the potential of affecting their efficiency to stay abreast of the competition. A plethora of remedial measures have been engaged by different organizations to improve their standings in the market.

Diversity is a concept that espouses acceptance and respect for all individuals with their uniqueness and differences at the workplace (Day, 2007). Proponents of diversity posit that organizations, which choose to go the diversity path, need to inculcate a culture of recognizing and accepting individual differences along social, religious, moral, gender, age, and racial dimensions among many others (Bell & Berry, 2005). DiversityInc.’s Top 50 list of companies for diversity ranked J.C. Penney Company Inc. in the 50th spot in 2013. This research paper thus seeks to scrutinize JCPenney’s approach to diversity in a bid to establish the extent of its success or failure and the reasons behind the success or failure.

An Overview of JCPenney

JCPenney is an American company that currently runs over 1100 departmental retail stores in all the 50 states of the United States and Puerto Rico (Keyes, 2005). James Cash Penney founded the company in 1902 in Kemmerer, Wyoming, to supply the residents of the area with fashionable goods from eastern towns. Mr. Penney started as a salesperson with Cahallan and Johnson who were partners in the Golden Rule Mercantile Company where after working for the two partners for three years, they volunteered to take him on as a third partner (Davis, 2004). Mr. Penney thus took up the chance and started his first store as a partner with the other two in 1902. After five years, the two partners sold out their shares to Mr. Penney in 1907 and left him to continue with the business (PR News Wire, 2011). He then focused on an aggressive expansion program such that by 1915, the business had expanded to 83 stores (Keyes, 2005). At inception, the company adopted the founder’s philosophy, The Golden Rule, in which the prime idea was “to treat the customer as you would want to be treated and this philosophy obligated the owner to run the store on fair prices for all goods basis” (Davis, 2004, p.6). Due to its commitment to providing satisfactory services and fair prices, JCPenney went through numerous transformations in its growth process. The transformations are aimed at giving the company a competitive edge over its rivals through streamlining its operations to match the ever-changing nature of society and customers’ shopping habits.

Departmental managers were allowed by Mr. Penney to own one-third of the stake in the stores they managed (Keyes, 2005). This move comes out as an early attempt at diversity by the founder of JCPenney. It is not clear if Mr. Penney had any particular criterion for selecting his managers but it can be deduced from his life and business philosophy that he was a man who would treat all his managers with respect and understanding because that is what he expected from them. It then follows that all his managers, no matter who they were and what they believed in, had equal opportunity at JCPenney.

J.C. Penney in Perspective

JCPenney boasts of a history of over one century within which many developments have transpired. Some of the developments were pivotal in making the organization what it is today and persistent cultivation of the same principles in the organization’s processes has culminated into JCPenney’s reputable standing in the American business realm. The company has always emerged from its low moments and this trend is attributable to the objective changes that have often taken place within the ranks of the company whenever its performance suffers. The trend also depicts the organization’s persistent endeavors to stay true to its founding philosophy, The Golden Rule. Concisely, staying focused on the golden rule has given the organization much strength over competitors.

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JCPenney’s Strength and Weakness Analysis

Over the years, the organization has cultivated a culture of valuing its relationship with everyone it deals with. This encompasses its employees, customers, suppliers, associates, and the communities in which its stores operate. From its slogan, which states, “Every Day Matters,” it is clear that the organization treats its interactions with its clients and stakeholders every day with utmost care to make them feel valued every time they visit the stores. This position is in line with the winning together strategy, which the company adopted in 2006 to involve everyone, from stakeholder to client and manager to the least worker, in its endeavor to be the best there is in the retail business. In addition to this strategy, the company also has eight employment principles, which emphasize attracting and retaining the best talent in the retail industry notwithstanding their personal beliefs or philosophies. One of the principal tenets that underpin diversity is that the top management, especially the CEO, should be committed to embracing it without reservations (Olsen & Martins, 2012). The founder introduced this element in the company when the organization was still young and it has continued to be perpetuated by his different successors. Mr. Penney’s personal and business philosophy was, “Do unto others as you would have it done unto you” (Davis, 2004, p.6). He thus took his personal life philosophy and applied it in the operation of his business. The founder’s philosophy served the organization well for as long as he was still actively involved in the business. His successors also continued to use the same underlying principles to run the company but with a variety of additional ideas.

The mission statement of JCPenney for instance evolved from the original golden rule to a more elaborate eight-point approach that seeks to define the company’s commitment in all aspects. The mission statement of JCPenney is enshrined in the following eight principles:

  • Associates – We value, develop and reward the contributions and talents of all associates
  • Integrity – We act only with the highest ethical standards
  • Performance – We provide coaching and feedback to perform at the highest level Recognition – We celebrate the achievements of others
  • Teamwork – We win together through leadership, collaboration, open and honest communication, and respect
  • Quality – We strive for excellence in our work, products, and services
  • Innovation – We encourage creative thinking and intelligent risk-taking
  • Community – We care about and are involved in our communities (PR News Wire, 2011).

The company’s vision statement also emerges as one that is committed to furthering the company’s diversity agenda. It outlines the principal strategies through which the company seeks to achieve its development goals viz. cultivating better relationships with its customers, seeking out coupled with striving to keep more associates and giving the shareholders the best value for their investments in the company (PR News Wire, 2011). A close look at the strategies reveals that JCPenney’s position on diversity has been embedded into the vision statement. The company throughout history has struggled to ensure that it stays true to the principal ideas outlined by the vision statement. The company thus pays very keen attention to its clients, associates, suppliers, and employees by building a deeper and more understanding relationship with them. Through this kind of attention, the company emphasizes the fact that it values and propagates diversity in all its dealings.

JCPenney’s statement of business ethics is also a plus to its approach to issues of diversity. In its statement of business ethics, the company espouses respect, honesty, responsibility, loyalty, communication, and integrity (Keyes, 2005). It is always committed to ensuring that all these pertinent issues are upheld in its interactions both internally and externally. This statement, when combined with the golden rule, leaves no room for discrimination against anybody in any way.

The organization also strives to ensure that it reaches out to communities near all its stores by identifying and addressing their fundamental needs through its corporate social responsibility program (Davis, 2004). It also ensures that it complies with all the requirements prescribed by law and any other authorities in the area on matters such as environmental concerns. JCPenney uses this approach to capture the hearts of the community members and thus have their undivided loyalty. This culture of being sensitive to the diversified needs of society and addressing those needs points to the organization’s position on matters of diversity as well. In addition, the organization started exploring the avenues of supplier diversity directly as early as 1972 when it became part of the founding members of the National Minority Supplier Development Council and subsequently, the Women’s Business Enterprise Council (Business Wire, 2009). Its venturing into supplier diversity at such a point in time seems to suggest that in its internal environment, the company had already embraced employee diversity before incorporating supplier diversity.

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Its commitment to supporting minority groups has seen the organization “realize a substantial growth in the purchase of merchandise, goods, and services from minority and women-owned businesses” (Business Wire, 2009, Para.12). In addition to being a champion for supplier diversity, it also sought to achieve customer diversity by ensuring that its merchandise and customers service reflect the diverse needs of society. JCPenney strives to make everyone catered for in its merchandise. The company, in the 2012 Top 50 Company for diversity rankings by DiversityInc, emerged the seventh out of the top ten companies for Latinos (PR News Wire, 2011). In the same rankings, the company was ranked the best retailer for diversity in the U.S. beating all its competitors and even companies from other industries (Keyes, 2005). These are non-refutable indicators of how valued diversity is at JCPenney stores.

To cap it all, JCPenney runs a very interactive website at jcpenney.com through which it conducts its online sales (Sloan, 2013). The website has been designed to cater to the needs of every individual who visits it, and this assertion is founded on the fact that the website represents society right from its young to the mature adult in the form of their clothing needs. In addition, there are other non-clothing items that visitors may find endearing. JCPenney is thus awake to the fact that the business landscape has changed in the wake of unprecedented technological advancement but even in its efforts to keep up with technology, it still ensures that an element of diversity is embodied in its website. It can be deduced from the endeavors of the company that it strives to ensure that it espouses diversity in its every activity.

Notably, the company has also had its areas of weakness, which have served to reduce its strength on the scene. Such weaknesses come in the form of employee reactions to diversity. Although diversity is normally aimed at the good of all, organizations face isolated cases where part of the workforce may end up damaging the good reputation that a company has struggled to uphold (McMahon, 2010). In the recent past, there have been declines in comparable-store sales, which have plagued the organization. Between January and November 2001, the organization realized a decline in sales by an average of 6.6% and only a rise of 3.4% (Keyes, 2005). This trend is not unique to this part of the company’s history, as in the past there had been cases of steep declines in sales which have often spurred overhauls in the company’s operations (Davis, 2004). The frequent overhauls have not boded well for the organization’s relationship with its clients and as such, this aspect emerges as a weakness.

In addition, cases of product recalls have been witnessed as well. A prime example of product recalls that the organization is that 73,000 drop-side baby cribs, which had exclusively been sold at JCPenney between 1998 and 2008 (Sloan, 2013). Although reports do not indicate any instances of casualties resulting from these cribs, the fact that there was a recall does not auger well with the organization’s underpinning philosophy. Customers can perceive it as a failure on the side of the organization because even though it did not manufacture the cribs, it failed to realize the potential harm posed by the cribs to the users until they got to customers and not just a few, but a whopping 73,000 units (Sloan, 2013). This incident also points to some weakness within the ranks of the organization.

JCPenney’s External Environment

The organization’s external landscape has evolved much like its internal landscape since its inception. The most notable aspects of its external surroundings include the competition it has had to weather over the history of its growth. The initial stages of the company were relatively smooth since it somewhat enjoyed a monopoly due to its fair prices and cordial relationship with customers and suppliers. However, this scenario changed when the organization took on an aggressive expansion to give it a nationwide presence. Its fiercest rivals over the years include Macy’s and Sears (Keyes, 2005). However, JC Penney has grappled with competition from other quarters such as in the retail industry including Wal-Mart and Montgomery Ward among many other companies, which deal in similar products as well (Davis, 2004).

Despite there being such competition, the organization has consistently proved that it is committed to upholding the tenets of the golden rule over a century later. This commitment is supported by the fact that JCPenney has made the DiversityInc.’s Top 50 list for three years in a row (PR News Wire, 2011). In addition to this aspect, it ranked position seven out of ten best companies for Latinos and the best retail company for diversity in the 2012 study by DiversityInc (PR News Wire, 2011). These rankings evidence JCPenney’s position insofar as its external environment is concerned.

The success has been intertwined with controversial events, which have served to place the organization in a better business landscape. For instance, the organization hired Ellen DeGeneres because of her stated values of honesty, compassion, and equality as its spokesperson (Rosenbaum et al., 2012). One Million Mums, a division of the American Family Association, wanted her removed due to her sexual orientation, but it largely failed when the CEO, Ron Johnson, publicly voiced his support for Ellen (Rosenbaum et al., 2012). This element is a typical example of the battles that the company had to grapple with in its quest to remain the best among its peers. In addition to such challenges from the external environment, the company faces threats in the form of rising labor costs, weak financial projections, and moderate new store openings. These projections seem to paint a bleak future for the company especially considering the fact the company currently faces a steep decline in revenues.

JCPenney’s Policy Framework for Diversity and Inclusion

JCPenney’s approach to diversity and inclusion hinges on the need to satisfy the diverse needs of the numerous American families it serves. The organization is well aware of the fact that to capture, retain, and continuously satisfy a multicultural society, there is a need to incorporate diversity at all levels of operation (Olsen & Martins, 2012). The company has committed to “building a company culture that respects and values the contributions of its diverse associates, customers, and suppliers” (PR News Wire, 2011, Para.13). In light of this, JCPenney has established a Diversity and Inclusion Council, which comes up with new ways of going about principal diversity issues viz. diversity in its supplier base, management of its relationship with clients, and capacity building for its associates (PR News Wire, 2011). The council also develops mechanisms through which the progress of its strategies can be practically monitored (PR News Wire, 2011). The organization had also been recognized by DiversityInc, as the “Top Company for Diversity Management,” for its notable milestones in workforce diversity in the retail sector in entire corporate America (PR News Wire, 2011). This recognition means that the company’s approach to matters of diversity is very elaborate under the guidance of the Diversity Council.

The company’s commitment to diversity does not stop at employees, customers, and suppliers, but extends to include the management team where the company pays close attention to diversity in its management priorities as this has helped enhance visibility and purpose in the company’s associate resource teams (PR News Wire, 2011). This group of individuals is seen as being instrumental in giving insights into the diverse needs of the communities they serve since in most cases, they are natives of such localities or have spent enough time in the areas to develop a clear concept of the backgrounds of the people and their needs. The realization of the fact that the management also needs to be diverse to serve its customer base was a great milestone in the company’s diversity endeavors. Including the management team in its diversity plan means that the company fraternity is awake to the fact that it needs to be diverse from the least individual to the highest placed individual. The company is a representative society in all its areas of operation.

JCPenney’s Diversity and Inclusion framework recognize affirmative action is vital in espousing diversity. The company, therefore, ensures that its workforce is representative of society by incorporating minority groups in the entire company hierarchy. However, this section of the policy seems to contain some loopholes because, despite its existence, the company paid $50,000 to settle a race discrimination lawsuit against Reinell Singh, an African American who served as a greeter at Penney’s Staten Island (PR News Wire, 2011). The employee had endured discrimination from her supervisor for a long time, but she was eventually fired on racial grounds by the same supervisor thus prompting the lawsuit that was instigated by Equal Employment Opportunity Commission (EEOC) (PR News Wire, 2011).

An Evaluation of Findings

Careful consideration of JCPenney has revealed that the company has a rich history indeed. A history filled with stints of success and landmark achievements as well as controversies, which threatened to jeopardize its reputable standing on the market scene. However, the company has always found ways out of its predicaments. The strongest aspect of the company’s operational strategy is its approach to diversity and inclusion. It has managed to pool together a diverse group of employees, associates, suppliers, and customers. This move synchronizes well with the company’s slogan, which states that, Every Day Matters. By putting in place a diversity strategy that cuts across its entire community, the company has succeeded in making diversity work for it. All employees, clients, stakeholders, and associates fully understand that the organization is a place of equal opportunities for all and as such all people are handled with respect and understanding. By anchoring all its operations on such a philosophy, the company has been able to succeed in attracting and capturing a variety of new clients thus driving its sales higher.

The organization’s leadership has also shown commitment to the values of the company through supporting its lesbian spokesperson, Ellen, who was under fire from some activists. This commitment has been acknowledged through the company’s appearance in DiversityInc.’s Top 50 list for three years in a row. Companies that have had the chance to participate in DiversityInc.’s surveys are well aware of the fact that making the final list of fifty is quite an achievement for an organization because the survey involves quite a large number of participants. The fact that JCPenney has made the list for three consecutive years is the strongest indicator of how well its mix of diversity strategies is performing. It can thus be concluded that the company has got everything right when it comes to matters of diversity and only needs to keep on improving its strategies to make it to the top and stay there.

Although JCPenney has been plagued by challenges of declining revenues repeatedly, which serve to dent its image especially in the face of its shareholders, such challenges seem to emanate from other quarters. The challenges cannot directly be linked to the company’s approach to diversity. In many cases, such declines adversely affected the company’s share prices but revamping the company often salvaged the situation. In the face of its customers, the most serious confidence-eroding incident was that of recalling 73,000 drop-side baby cribs. The incident left much to be desired on the quality assurance practices of the company. The cribs were recalled because the manufacturer of the cribs seemed to have realized the fault in the cribs before JCPenney staff did. This casts a dark shadow on the company’s quality assurance policies and criteria but not on its diversity policies.

A consideration of these strengths and weaknesses in the face of the external forces reveals that the company can still do well. Its ability to do well seems to be anchored on the premise that its diversity policies and framework are capable of moving it forward. The company has been acknowledged as an embodiment of diversity. This recognition hinges on the fact that the company has an elaborate diversity framework that allows it to attract and retain a diverse workforce, customers, suppliers, and stakeholders. To achieve this, the company has always focused on treating everyone with respect and understanding to make them feel valued every time they deal with the company. In addition, customers find their diverse shopping needs well taken care of at JCPenney stores. Positioning itself as a one-stop shopping destination, which coupled with the respectful treatment of the customers, pitches JCPenney’s approach to diversity as a success.

Recommendations

The company’s approach to diversity and inclusion is among the best in the US as attested to by the recognition the company has received. The company has succeeded in making DiversityInc.’s Top 50 list of companies for diversity several times. However, in the 2013 list, the company almost missed from the list as it dropped from position thirty-five (35) to the last spot, viz. position 50. This drop signifies a change in some given aspects of the company’s approach to diversity. The period that led up to the study was the period during which the newly recruited CEO, Ron Johnson, initiated a total overhaul of virtually all aspects of the company’s operations, a move that has been touted by analysts as having been disastrous. It then follows that departure from the traditional company culture contributed to this deterioration in diversity matters. The newly reinstated former CEO should thus revamp other areas of the organization, but only seek to improve the strengths of the diversity and inclusion framework that existed before Ron’s takeover.

In addition to this recommendation, the company should pay close attention to its non-discrimination policy and complaint procedures to streamline them with the company’s known strong support for diversity. This would greatly help in avoiding cases of employees discriminating against each other and forcing the company to pay hefty fines in the form of compensation to victims of discrimination as has been witnessed in the past. The workforce needs to be taken through regular anti-discrimination training programs which constantly reminds employees of the company’s position on matters of diversity and the need to accept one another based on each person’s ability to perform and not on racial, religious, or gender grounds whatsoever

Conclusion

JCPenney has emerged as among the best companies for diversity in the US. Throughout its developmental history, the organization has proved to espouse diversity even in the most unlikely of circumstances. DiversityInc identified commitment by the leadership as among the key indicators of a company’s commitment to diversity. JCPenney proved its commitment to diversity when the company leadership came to the rescue of one of its employees who were under serious attack on grounds of her sexual orientation. The leadership stood by her due to the value she added to the company and did not allow the activists’ concerns to blur their vision. This move was the best example through which the company’s commitment to diversity stood out. Thus the leadership’s commitment, respectful treatment of all its community, and an elaborate diversity framework all bond together to make JCPenney’s approach to diversity a success. The company’s current financial woes cannot be blamed on its diversity plan. It can safely be asserted that the management of JCPenney has been at the forefront in leading the company into similar difficulties in the past and as such, the company’s approach can still be considered successful despite the few cases of anti-diversity behavior recorded.

Reference List

Bell, M., & Berry, D. (2007). Viewing Diversity through Different Lenses: Avoiding a Few Blind Spots. Academy of Management Perspectives, 21(4), 21-25.

Business Wire. (2009). JCPenney Recognized for Inclusion and Diversity Results. Web.

Davis, G. (2004). Business ethics: It’s all inside JCPenney grounded in golden rules of business conduct. Mid – American Journal of Business, 19(1), 7-10.

Day, R. (2007). Developing the multi-cultural organization: Managing diversity or understanding differences? Industrial and Commercial Training, 39(4), 214-15.

Keyes, S. (2005). Celebration of fools: An inside look at the rise and fall of JC Penney. The Journal of Consumer Marketing, 22(7), 445-446.

McMahon, A. M. (2010). Does workplace diversity matter? A survey of empirical studies on diversity and firm performance, 2000-09. Journal of Diversity Management, 5(2), 37-48.

Olsen, J., & Martins, L. (2012). Understanding organizational diversity management programs: A theoretical framework and directions for future research. Journal of Organizational Behavior, 33(8), 1168-1187.

PR News Wire. (2011). JC Penney Ranked No. 1 Retailer for Diversity by DiversityInc. JCPenney also earns No. 7 Spot on ‘Top 10 Companies for Latinos’. Web.

Rosenbaum, M., Walsh, G., & Wozniak, R. (2012). Family allowances as reverse retail discrimination. International Journal of Retail & Distribution Management, 40(5), 342-359.

Sloan, C. (2013). JCPenney Home Overhaul Underway. Home Textiles Today, 31(11), 1-23.

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