Managing Motivation in a Difficult Economy: Morgan Moe’s Case Study

Morgan-Moe’s drug store are in trouble. A major regional player in the retail industry, the company has hundred of stores in the upper Midwest. Unfortunately, a sharp decline in the region’s manufacturing economy has put management in a serious financial bind. Revenues have been consistently dwindling. Customers spend less, and the stores have had to switch their focus to very low-margin commodities, such as milk and generic drugs, rather than the high-margin impulse buy items that used to be the company’s bread and butter. The firm has had to close quite a few locations, reversing its expansion plans for the first time since it incorporated. Being that this is uncharted territory for the company, Jim Claussen, vice president for human relations, had been struggling with how to address the issue with employees as the company’s fortunes worsened. he could see that employees were becoming more and more disaffected. Their insecurity about their jobs was taking a toll on attitudes. The company downsizing was big news, and employees did not like what they were hearing.

Media reports of Morgan-Moe’s closings have focused on the lack of advance notice or communication from the company’s corporate offices, as well as, lack of severance payments for  departing employees. In the absence of official information, rumors and gossip have spread like wildfire among remaining employees. A few angry blogs developed by laid-off employees, like IHateMorganMoe.blogspot.com , have made the morale and public relations picture even worse.

Morgan-Moe is changing in other ways as well. The average age of its workforce is increasing rapidly. A couple of factors have contributed to this shift. First, fewer qualified young people are around because many families have moved south to find jobs. Second, stores have been actively encouraged to hire older workers, such as retirees looking for some supplemental income. Managers are very receptive to these older workers because they are more mature, miss fewer days of work, and do not have child care responsibilities. They are also often more qualified than younger workers because they have more experience, sometimes in the managerial or executive ranks.

These older workers have been a great asset to the company in troubled times, but they are especially likely to leave if things get bad. If these older workers start to leave the company, taking their hard-earned experience with them, it seems likely that Morgan-Moe will sink deeper toward bankruptcy.

Required:

When you write, make sure you touch on the following points:

1. Consider the five management systems as variables in an experiment. Identify the independent and dependent variables, and explain how they are related to one another.

2. Based on the discussion of independent and dependent variables in the lecture notes, is there anything else you would like to measure as an outcome? 

3. Look over the data and decide which method of management appears most effective in generating revenues and reducing turnover, and why. Which methods appear least effective, and why?

4. Are there any concerns you have about these data?

a) Does a comparison of the number of stores using each method influence your conclusions at all?

b) Does the fact that managers are selecting the specific program to use (including Program I, which continues the status quo) affect the inferences you can draw about program success?

c) What are the advantages of randomly assigning different conditions to the stores instead of using this self-selection process?5. How does the changing nature of the workforce and the economy, described in your lecture notes and in the case, affect your conclusions about how to manage retail employees? Does the participation of a more experienced workforce help or hurt these programs? Why might these programs work differently in an economy that isn’t doing ins’t doing so poorly. 

6. Claussen essentially designed the program on his own, with very little research into goalsetting and motivation. Based on your lecture notes, how well has he done? Which parts of the program appear to fit well with research evidence on goal-setting? What parts would you change to get more substantial improvements in employee motivation?
7. Describe the feelings employees might have when these systems are implemented that could  help or hinder the program success. What advice would give managers about how to implement the programs so they match the principles of organizational justice described in your lecture notes?