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Chapter 1 Organizational Behavior

Learning Objectives

After reading this chapter, you should be able to understand and articulate answers to the following questions:

  1. What is organizational behavior (OB)?
  2. Why does organizational behavior matter?
  3. How can I maximize my learning in this course?
  4. What research methods are used to study organizational behavior?
  5. What challenges and opportunities exist for OB?

Employees Come First at Wegmans

Figure 1.1

This Wegmans is located in Germantown, Maryland.

Ever since Fortune magazine created its list of the 100 Best Companies to Work For, Wegmans has consistently remained within its ranks. In 2007, Wegmans was given the Food Network’s award as the nation’s top supermarket. Wegmans is a thriving grocery store chain based in Rochester, New York, that grew to 71 stores across Maryland, New Jersey, New York, Pennsylvania, and Virginia by 2008. Wegmans is a family-run business. Daniel Wegman, the current CEO, is the grandson of the company’s cofounder. Daniel’s daughter Colleen Wegman is president of the company. The Fortune magazine ranking came as a surprise to many in the grocery industry, as Wegmans is characterized by low profit margins, low-paying and tedious jobs, and demanding customer interactions.

There are many reasons that Wegmans has such loyal workers and a turnover rate of only 8% for their 35,000 employees (compared to the industry average, which is closer to 50%). They utilize job sharing and a compressed workweek and also offer telecommuting for some employees. Ultimately, Wegmans created an environment that shows employees they matter. The company motto is “Employees first. Customers second” is based on the belief that when employees feel cared for, they will in turn show concern for the customers they serve. In response to the 2008 ranking as the third best company in the United States to work for, CEO Danny Wegman said, “Every one of our employees and customers should stand up and take a bow, because together they make Wegmans a special place.”

Wegmans has also consistently brought innovations to a fairly traditional industry. For example, Wegmans launched a Web site for its stores in 1996 with specifics on health and recipes and other helpful information for its customers. Many have called the experience at Wegmans “Food Theater.” With sales of organic foods in the United States soaring to $17 billion, Wegmans supermarkets started its own 50-acre organic research farm. Its goal is to develop best practices in terms of health and efficiency and to share those practices with the hundreds of farmers that supply their stores with fresh fruits and vegetables.

Wegmans is demonstrating that being both socially and environmentally responsible can increase employee loyalty, growth, and profits, creating a win–win situation for the organization, important stakeholders such as employees and customers, and the communities where they are located.