Week 1 Case Study 1.1 : REI Tells Employees to Go Outside
Read Case study 1:1 Carefully and answer the following two questions: 1.) Six major environmental forces have been identified as reshaping management. Which three are having the greatest impact and why? Support your choices.
American productivity is that the labor and job specialization have not been car- ried far enough. Case Case 1.1: REI Tells Employees to Go Outside The annual holiday shopping season typically begins 6 million active members and more than $2.4 billion on the Friday after Thanksgiving, known by retailers in annual revenues. and consumers alike as "Black Friday." In recent years, The company's employee-friendly culture is not however, some retailers such as Walmart, Target, and new. In the early 1960s, the company began providing Macy's have moved up the start of their shopping sea- employees and their families with health care benefits son to Thanksgiving Day, which has caused much de- and implemented a profit-sharing program soon after. bate about making employees work on a holiday By the mid-1970s, REI launched a philanthropy pro- typically spent with family and friends. gram to support outdoor recreation, donating more In 2015, specialty outdoor retailer Recreational than $40 million to date to projects on public lands. Equipment Inc. (REI) bucked the holiday shopping . More than 20 years ago, in 1996, REI launched the trend all together. The company announced it would largest outdoor gear and apparel store on the Internet. not only close its stores on Black Friday, but would And REI is one of only 12 companies that have made also pay its almost 12,000 employees to take the day off and "go outside." REI also told consumers that Fortune's "100 Best Companies to Work For" list every year since it started back in 1988. online purchases made on the company's website would not be processed until Saturday of the extended Several years ago, REI started giving employees holiday weekend, allowing all of its employees to two "Yay Days" on an annual basis. A "Yay Day" is an #OptOutside. extra paid day off when employees are invited to try Reaction to REI's unusual strategy was overwhelm- something new, challenge themselves in a favorite ac- tivity, or work on an outdoor stewardship project. This ingly positive. And according to retail analysts, the company's decision to close its brick-and-mortar stores additional paid time off allows staffers to reconnect on Black Friday increased its online traffic dramati- with the outdoors in an effort to gain knowledge they can share with REI customers. And sharing their "Ya cally-26 percent from the previous year-a win-win for both the company and its employees. Day" experiences on social media helps employee provide REI with great marketing exposure to attrac REI has been ahead of the curve on sustainable business practices and exceptional employee benefits more job seekers and potential customers to the com pany and its employee-friendly culture. More tha for many years. Based in Kent, Washington, the com- pany began in 1938 when Lloyd and Mary Anderson 1,200 photos were posted on Instagram tagg #REIYayDay. formed a cooperative to share outdoor gear with Unlike some companies, REI works hard to reta some of their mountain-climbing friends. A total of its employees. The company would like employees 23 people each paid $1 to join. Fast-forward 75 years, spend their entire working career with the organizati and the retailer is the nation's largest consumer coop- In 2015, REI funded $60 million in incentive plans erative. Consumers join as members (currently $20 profit-sharing contributions, giving every elig for a lifetime membership) and receive 10 percent employee an automatic 5 percent company retirem back on purchases they make in stores or online as contribution into their 401(k) accounts, along with part of an annual dividend. REI has more than additional 7 percent profit-sharing contribution. UTMFW 130 Part One The Field of Organizational Behavior These business strategies all support the company's 3. Why does giving "Yay Days" to employees help core mission of providing more people with greater ac- support REI's overall business strategies? cess to the outdoors while promoting environmental Sources: Company website, "About REI" and "REI Membership," https:// and social stewardship. REI also gives back to the out- www.rei.com, accessed April 27, 2016; "REI: Celebrating 75 Years of Ad- door community by investing millions of dollars in venture, Employee Perspectives," YouTube, http://www.youtube.com, ac- more than 300 nonprofit organizations around the cessed April 27, 2016; "100 Best Companies to Work For: #26: country. The company's CEO, Jerry Stritzke, says Recreational Equipment, Inc.," Fortune, http://fortune.com, accessed April REI's success reflects the appeal of life outdoors. "We 27, 2016; "Recreational Equipment, Inc.," Great Place to Work, http:/re- have focused hard on giving our members great gear views.greatplacetowork.com, accessed April 27, 2016; Katie Boue, "Yay and expertise," he says, "and we are saying a big thank for Corporate Culture," Outdoor Industry Association, https://outdoorin- you by investing more in the work our nonprofit part- dustry.org, accessed April 27, 2016; Janet I. Tu, "REI Reaches New Peak in ners do for our members and the outdoor community." Revenue and Dividends," Seattle Times, March 29, 2016, http://www.se- attletimes.com; Nathan Layne, "U.S. Holiday Sales on Track amid Online Questions Boost," Reuters, November 30, 2015, http://www.reuters.com; Molly Brown, "REI's Move to Close Black Friday Pays Off with 20 Percent Hike in 1. How does REI leverage its social and environmental Online Traffic," Geekwire, November 30, 2015, http://www.geekwire.com; stewardship to attract and retain top employees? Lindsey Rupp, "Holiday Weekend Shoppers Skip the Store and Buy On- 2. Explain how REI uses social media to communicate line," Bloomberg, November 28, 2015, http://www.bloomberg.com; Matt Kates, "Banning Black Friday: REI's Decision to Opt Out (and Why Others its organizational culture to employees, co-op mem- May Want to Follow)," Forbes, November 16, 2015, http://www.forbes. bers, and potential new hires. com; Andrew Burger, "REI's Co-op Business Model Produces Record Results," Triple Pundit, April 15, 2015, http://www.triplepundit.com
