Introduction
Because it inspires, encourages, and sets an example for others, leadership is crucial to bringing about constructive change in the world. Leaders provide a vision, offer a course of action, and cultivate a close bond with their followers. They enable individuals to work together to accomplish amazing accomplishments as a consequence (Wang et al., 2019). Leaders may intervene and demonstrate the organization’s vision by using their abilities. To put it another way, leaders put people’s jobs and responsibilities in the appropriate perspective. They could understand their place in the bigger picture if they had that type of guidance.
Organizational culture and morale frequently suffer when leaders are unable to give mentoring and encouragement to their workforce. High personnel turnover and productivity loss are mostly caused by poor leadership. Ineffective company or unit management prevents the growth of synergy and may cause departments and job functions to become fragmented (Guo et al., 2018). This implies that each employee disregards the crucial role that their labor plays in attaining the organization’s objectives. Employees who feel uncertain or uneasy about the organization or their jobs may exhibit poor leadership. Leadership failure and its repercussions are the subjects of the J.C. Penny and Ron Johnson case. This essay will analyze the case, identify leadership strategy flaws, and attempt to present a more balanced reasoning.
Summary of the Case
J.C. Penney was founded in the very beginning of the 20th century and had a lengthy history. It had genuinely evolved into a national treasure at the turn of the twenty-first century, dominating the retail industry (Harbin & Humphrey, 2015). The business has struggled to establish itself in the clothes retail sector since the early 2000s. Retailers in brick-and-mortar stores and the burgeoning online sector were becoming more and more competitive. Penney’s sales have been flat, and the company’s shares have not increased, which has frustrated investors. The brand has frequently been criticized for having a distasteful and uninteresting image by several retail analysts as well as even its own customers, particularly younger ones.
Ron Johnson was appointed CEO in late 2011 partly as a result of Mr. Ekman’s, one of the Board members’ proposal. Johnson wanted to change J.C. Penney’s staid image into that of a hip shopping destination. His plan, developed over several days, envisaged turning each of the 1,100 businesses the business owned into a mini-mall (Harbin & Humphrey, 2015). Each store was to contain a different store. Compared to what is now available, each store would be far more upmarket. These premium shops would be created to draw wealthy customers. A well-known design firm has even rented out several of the stores
As a result, only 17 months were spent by Ron Johnson as CEO at J. C. Penne. During his tenure, the company’s net revenues decreased, debt increased, and more than 40,000 employees were fired (Harbin & Humphrey, 2015). Eventually, Johnson and his staff received more than $200 million in total executive remuneration from the corporation (Harbin & Humphrey, 2015). The corporation, on its side, only had billions in lost sales, thousands of once-loyal customers who had left, a shop remodeling program that had only just started, severely demoralized personnel, and, worst of all, a mortally wounded American icon.
Leadership Assessment
Johnson’s arrival caused the corporate culture to shift from one of support to one of dictatorship. The company’s former culture was replaced with a covert one where no one was permitted to provide comments or ask inquiries. Johnson seemingly had a fresh concept for attracting new business. Within Penney, he created the idea of a mini-mall with distinct stores in each store with the anticipation that the premium shops would draw wealthy customers (Harbin & Humphrey, 2015). During his period, JC Penny made the decision to stop using the promotions, discounts, and coupons that were so important to the business. Johnson also dismissed devoted and tenured staff in addition to eliminating incentives and commissions for sales agents (Harbin & Humphrey, 2015). Overall, Johnson’s modifications only served to foster a climate of mistrust among staff members of the corporation. People started to depart the firm haphazardly. This caused a gap in the client area segment that consistently affected J.C. Penny, which ultimately contributed to the company’s lackluster success.
Johnson leads in a way that may be characterized as authoritarian or dictatorial. This implies that a leader who exercises absolute authority is authoritarian. This leadership style does not provide for possibilities for participant involvement since the leader, and his inner circle make all the choices, keep all the important information to themselves, and set the law (Wang et al., 2019). Authoritarian leadership may also be present when there is a “power clique” whose members believe they are in a superior position to others (Guo et al., 2018). In this case, they must issue unilateral directives in order to accomplish tasks.
In terms of applicability, using an authoritarian or dictatorial leadership style can be successful when a quick decision needs to be taken. This is connected to making quick choices when alternative leadership philosophies would allow for participant participation or creative problem-solving (Wang et al., 2019). This approach may also work when the group is out of control and not putting any effort into achieving a certain objective. Dictatorial leadership is a useful style to use when the group’s or other people’s safety is the primary consideration, when quick choices need to be made or when important tasks need to be completed in a certain method (Guo et al., 2018). To some extent, the situation in J.C. Penny can be attributed to these conditions, but there was no critical point when such unilateral decisions should have been made.
Overall, the organization’s reputation was tarnished in the eyes of its staff, as well as their external clients and investors, by Ron Johnson, the new CEO of J.C. Penney. Johnson has made steps to cut the significant expenses associated with personnel and operations, but he never considered reducing the value attained by himself, his team, or those close to him in the company. Johnson’s management team had to alter the fundamental assumptions of those around them. Criticizing those who are essentially part of the “in” crowd causing splits at a time when cohesion is most required, particularly in light of all the drastic changes being implemented. The development and transformation of a business depends on the team, and leadership is all about motivating people and convincing them to believe in your ideas.
Recommendations
Johnson needed to understand his surroundings as a leader in order to properly use his skills to fit in and become effective there. For instance, Johnson’s suggestion to alter the emblem was sufficiently close to Apple’s suggestion. Not every business, though, will be able to launch in the same way. Since J.C. Penney is a very different business from Apple, it is important to respect the organization’s reputation and the individuals it is affiliated with. None of this was exploited by Johnson to demonstrate his leadership skills toward Penney.
Effective leadership must also gain the respect of its subordinates. Johnson made no effort to influence an established team of experts as a stranger to the sector. His character encouraged suspicion and increased the gap between him and the people he needed to achieve a breakthrough with. The most crucial elements for creating strong relationships are trust and respect (Siangchokyoo et al., 2020). A competent manager must place a high priority on good interpersonal interactions at work and develop his staff members into independent people who will work hard out of motivation rather than fear of their employer.
When attempting to identify a possible leadership style, which will be suitable in this particular situation, the best option is to stick to transformational leadership. Transformer leaders inspire their employees to innovate and implement organizational transformation consistent with the overarching objective of their firm (Siangchokyoo et al., 2020). It can be understood as a hybrid of coaching and visionary leadership philosophies. When the organization is going through a period of transition, which is when transformational leadership is most successful. A leader is required to spearhead innovation, such as via mergers and acquisitions, restructuring, rebranding, or product line diversification, this might happen.
Since of the characteristics of the transformational leader, the followers of such a leader are prepared to put in more effort than was first anticipated because they respect, admire, and trust the leader. These outcomes happen because transformative leader provides their followers with more than just the opportunity to work for themselves; they also give them a new identity and a compelling goal and vision (Eliyana & Ma’arif, 2019). These are crucial steps that transforming leaders can take. An individual’s goals are more closely connected with the group’s overall objectives so that each group member’s success helps the organization accomplish its objectives (Eliyana & Ma’arif, 2019). The group may benefit from this leadership approach in terms of better outcomes, personnel well-being, and enhanced productivity.
Conclusion
Leaders are eventually judged on how well their decisions turn out. His brazenness and combative temperament might be overlooked and even embraced if Ron Johnson’s vision came true. A bad-tempered leader, on the other hand, seldom succeeds because their vision is incorrect and poorly carried out. Overall, it may be concluded that Johnson did not make the necessary efforts to identify a vision that would be compatible with J.C. Penney’s goal. He and his management team were required to alter the fundamental assumptions of those around them, but they failed to do so.
Naturally, some of the responsibility for the poor leadership and unsuccessful strategy should go on the Penney Board of Directors. The company’s Board is also responsible for the organization’s actions, not only the CEO. In this instance, an activist effectively controlled the Board of Directors and selected his candidate with undue influence. This became apparent when the incorrect leader with the incorrect leadership style was chosen. He suffered from Johnson’s rigidity in their relationship, which had disastrous effects and contributed to his failure in his career.
References
Eliyana, A., & Ma’arif, S. (2019). Job satisfaction and organizational commitment affect in the transformational leadership towards employee performance. European Research on Management and Business Economics, 25(3), 144-150. Web.
Guo, L., Decoster, S., Babalola, M. T., De Schutter, L., Garba, O. A., & Riisla, K. (2018). Authoritarian leadership and employee creativity: The moderating role of psychological capital and the mediating role of fear and defensive silence. Journal of Business Research, 92(1), 219-230. Web.
Harbin, J., & Humphrey, P. (2015). J.C. Penney and Ron Johnson: A case of failed leadership: Lessons to be learned. Journal of the International Academy for Case Studies, 21(5), 95–101. Web.
Siangchokyoo, N., Klinger, R. L., & Campion, E. D. (2020). Follower transformation as the linchpin of transformational leadership theory: A systematic review and future research agenda. The Leadership Quarterly, 31(1), 101341. Web.
Wang, Z., Liu, Y., & Liu, S. (2019). Authoritarian leadership and task performance: the effects of leader-member exchange and dependence on leader. Frontiers of Business Research in China, 13(1), 1-15. Web.