Case Study: Organizational Culture and Innovation

Case Study: ORGANIZATIONAL CULTURE AND INNOVATION
Never on a Sunday
McCoy's Building Supply Centers of San Marcos, Texas, have been in continuous successful operation for over 70 years in an increasingly competitive retail business. McCoy's is one of the nation's largest family-owned and managed building-supply companies, serving 10 million customers a year in a regional area currently covering New Mexico, Texas, Oklahoma, Arkansas, Mississippi, and Louisiana. McCoy's strategy has been to occupy a niche in the market of small and medium-sized cities.

McCoy's grounding principle is acquiring and selling the finest-quality products that can be found and providing quality service to customers. As an operations-oriented company. McCoy's has always managed without many layers of management. Managers are asked to concentrate on service-related issues in their stores: get the merchandise on the floor, price it, sell it, and help the customer carry it out. The majority of the administrative workload is handled through headquarters so that store employees can concentrate on customer service. The top management team (Emmett McCoy and his two sons, Brian and Mike, who serve as co-presidents) has established 11 teams of managers drawn from the different regions McCoy's stores cover. The teams meet regularly to discuss new products, better ways for product delivery, and a host of items integral to maintaining customer satisfaction. Team leadership is rotated among the managers.

McCoy's has a workforce of 70 percent full-time and 30 percent part-time employees. McCoy's philosophy values loyal, adaptable, skilled employees as the most essential element of its overall success. To operationalize this philosophy, the company offers extensive on-the-job training. The path to management involves starting at the store level and learning all facets of operations before advancing into a management program. All management trainees are required to relocate to a number of stores. Most promotions come from within. Managers are rarely recruited from the outside. This may begin to change as the business implements more technology requiring greater reliance on college-educated personnel.

Permeating all that McCoy's does is a strong religious belief, including a strong commitment to community. The firm has a long-standing reputation of fair dealing that is a source of pride for all employees.
Many McCoy family members are Evangelical Christians who believe in their faith through letting their “feet do it”—that is, showing their commitment to God through action, not just talk. Although their beliefs and values permeate the company's culture in countless ways, one very concrete way is reflected in the title of this case: Never on a Sunday. Even though it's a busy business day for retailers, all 103 McCoy's stores are closed on Sunday.

Atlanta, Georgia
Courteous service fuels growth at Chick-fil-A. But don't plan on stopping in for a chicken sandwich on a Sunday; all of the chain's 1,250 stores are closed. It is a tradition started by 85-year-old founder Truett Cathy, who believes that employees deserve a day of rest. Known as someone who believes in placing “people before profits,” Truett has built a successful and fast growing fast-food franchise.

Headquartered in Atlanta, where its first restaurant was opened, Chick-fil-A is wholly owned by Truett's family and is now headed by his son. It has a reputation as a great employer, processing about 10,000 inquiries each year for 100 open restaurant operator jobs. Chick-fil-A's turnover among restaurant operators is only 3%, compared to an industry average as high as 50%. It is also a relatively inexpensive franchise, costing $5,000, compared to the $50,000 that is typical of its competitors.

The president of the National Restaurant Association Educational Foundation says: “I don't think there's any chain that creates such a wonderful culture around the way they treat their people andthe respect they have for their employees.”
Truett asks his employees to always say “my pleasure” when thanked by a customer. He says: “It's important to keep people happy.” The results seem to speak for themselves. Chick-fil-A is the twenty-fifth largest restaurant chain in the United States, and reached over $2 billion in salesin 2006.1

Case Questions :-
1. Write Summaries of your Case Study. 
2.  How have the personal beliefs of the McCoy and Cathy families influenced the organizational cultures of their firms?
3.  What lessons for developing high-performance organizational cultures can these two cases provide for other firms that aren't family run?
4.  What would be the challenges for a new leader who is interested in moving her organization in the direction of the McCoy or Chick-fil-A cultures?