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One of the most essential aspects that dictate effective business operations and administrative development capacity in an organization is the ability to come up with a mechanism which evaluates performance of both an organization and its employees. Performance evaluation in any company is an important operation that enhances competitive advantage and eventual profitability. The main issue that affected the performance of Nordstrom prior to the turnaround was the challenge of implementing performance evaluation mechanism. Its sales per hour (SPH) program which was initially meant to determine levels of performance of workers, their promotional and compensational needs did not deliver the expected results. This compelled employees to work overtime. As an organization, it was important for employees to maintain a high level of sales per hour. They were coerced by the existing performance evaluation system. This made them to work odd hours in offering customer service, writing ‘thank you’ notes, attending mandatory meetings and delivering purchases.
There have been intense issues related to merchandising at Nordstrom. These issues have negatively affected clients. Some of the disruptive issues include business for social responsibility’s apparel, problems arising from Bangladesh workers’ safety alliance and sundries working group. Regarding the aspect of customer service, it is evident that it is the main channel through which company’s employees are exploited. Besides, quite a large number of its employees have lamented over lack of a return policy for products. Moreover, a special focus in information technology has been critical in the growth of Nordstrom because it has aided in offering solutions to the challenges facing the company and equally enhanced design capabilities. However, it is still unable to identify operations that can effectively reduce costs. This is reflected mostly in the organization’s leadership and marketing platforms. According to Lal and Han, effective leadership is a powerful tool that dictates employees’ ability to work in various areas of specialization (14). When it comes to stores and personnel, decentralizing systems and lack of a proper protocol affect the efficiency of personnel when discharging their duties.
Nordstrom’s competitive advantage lies in excellent customer service. Effective customer service is fundamental in organizational growth and development because it defines the ability to maintain loyalty among customers. Service offering for each customer segment is based on a top-down approach for different sales made. The latter has been adjusted to reflect the amount of revenue generated by the firm. For customers who are considered to be profitable to the company, Nordstrom has been employing strong retention strategies in order enhance and sustain growth potential of the company. In 2001, the company made versatile themes after previous marketing campaigns failed. The company has been in a position to facilitate organizational changes in its manufacturing, logistic and personnel operations.
Adopting an effective international strategy is a critical step in promoting competitive advantage, increasing market share and sustaining high profitability. In Nordstrom, the desire for a functional strategy and better product designs is equally important because of the ever-rising rate of competition and demand for clients’ satisfaction. Nordstrom embarked on a global expansion program that has led to rapid expansion of the company since the advent of the 21st century. Success in the newly expanded company has been possible due to careful coordination at the local and international levels. Lal and Han observe that performance management in organizations helps in leveraging competitive advantage in the market (23). Performance management at Nordstrom is conducted with a clear purpose of enhancing commitment from employees and customers besides encouraging poor performers to raise their standards.
Works Cited
Lal, Rajiv, and Arar Han. “Nordstrom: The Turnaround.” Harvard Business School Cases (2005): 1-35. Print.
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