Case Study: Nordstrom's Customer Service Culture Serves As A Control Mechanism

González Diana

Ortega Johanna

Martínez Gersain

Ramirez Angie

UNIMINUTO

Postgrado Distancia

Especialización en Gerencia de Riesgos Laborales

Cúcuta

2019
 DISCUSSION OF CASES ON ISSUES

1. The control facet of the P-O-L-C structure introduces you to a variety of controls. What

types of controls does Nordstrom seem to effectively incorporate into its operations?

The control allows managers to monitor and regulate actions to align performance with

expectations, just as music producers align musicians and effects to create the desired sound.

Non-financial controls, such as those related to employee satisfaction, customer service, etc., are

an important and increasingly applied form of organizational control. While companies that use

non-financial controls also perform much better than companies that do not use them, numerous

management errors are made with respect to their conceptualization, implementation, or both.

Beyond the mere use of non-financial controls, best practices around non-financial controls include

their alignment with strategy, validation of the links between non-financial controls and financial

controls, setting appropriate performance targets for controls, and confirming the need for

measurement of the desired control.

2. Does Nordstrom use behavioral controls? What are some examples?

Controls can have costs in terms of culture and reputation of the organization. While organizations

benefit from tracking employee behavior, implementing strict monitoring efforts can have

undesirable cultural consequences in the form of reduced employee loyalty, increased turnover, or

damage to the organization's external reputation.

Behavior Control

• Organizational Culture

• Practical management supervision during a project

 • Qualitative measures of customer satisfaction

Behavioral controls involve the direct evaluation of management and employees' actions, not the

results of management decisions. Behavioral controls are typically more appropriate when the

actions of individuals can be clearly linked to the performance of the organization.

3. Does Nordstrom use outcome controls? What are some examples?

Outcome controls are judged by the outcome of the organization's activities, while behavioral

controls involve monitoring how members of the organization behave on a daily basis.

Control of results

• Market demand or economic forecast

• The real-time speed of a production line.

• Financial measures such as profitability, sales growth.

Results controls are generally preferable when performance can be measured through tangible

performance metrics.

4. What suggestions would you give Nordstrom to maintain and develop the organizational

culture that has contributed to its success?

Nordstrom owes its success to its employees, who are responsible for providing an optimal service

that also involves administrative levels. Good performers are kind, active, enterprising, ambitious,

friendly and well dressed in Nordstrom clothes. For Nordstrom, salespeople are the most important

part of the company, as they are the ones who serve customers directly. Nordstrom employees
must take risks as a way to improve their efficiency and have a positive climate with the customer.

They are therefore allowed to make decisions without having to consult, in order to quickly meet

the needs of customers.

We see that Nordstrom over time has overcome various problems, but thanks to the solutions

provided by its employees, it has come to fruition, Nordstrom has an advantage, and that it has no

hierarchies and everyone is committed to the company.

5. Which elements of the Balanced Scorecard does Nordstrom seem to consider most

important?

The Balanced Scorecard is a framework designed to translate an organization's vision and mission

statements and overall business strategy into specific, quantifiable goals and objectives, and to

monitor the organization's performance in terms of achieving these goals.

Social psychologist Hubert Rampersad has sought to translate the business Balanced Scorecard

into a balanced personal score by providing the following four suggestions:

• Learning and growth: their skills and learning capacity. How do you learn and how can

you succeed in the future? For example, the course you are taking along with this book

may lead to a title, be a prerequisite for other courses, and so on.

• Intern: your physical health and mental state. How can you control them to create value for

yourself and others? How can you continue to feel good both at work and in your free time?

For example, your goals and activities related to physical and emotional health.

• Client (external): relationships with spouse, children, friends, employer, colleagues and

others. How do they see you?

 • Financial: financial stability. How well can you meet your financial needs? Again, are you

looking for financial independence, resources to fund other initiatives?

Nordstrom, according to the balanced scorecard, considers the Internal and the (external) Client to

be more important.