Morgan Moe Drugstores
Management Style Analysis

TABLE OF CONTENTS

Morgan Moe Drugstores 1

Analysis Team 4

Introduction 5 The Problem 5 “Mans Search for Meaning” 5 The 5 programs 5

The Study 6

Table 1: Study Results 6

Analysis Team

Annie Malpartida
Brad Ingram
Daniel Ojst
Fernando Lamelas
Jeremy Spund

Introduction

The Problem

Manufacturing across the Midwest has seen sharp declines in the May 08 to May 09 Year. The automotive industry saw a reduction of over 39%, Steel output was down 36.8%, and manufacturing as a sector saw a 24% decrease.[i]

But what does this mean for Morgan Moe Drugstores? Why is manufacturing so important? The Midwest primary output is manufacturing and agriculture. A decline in either one of these sectors means that the workers driving the Midwest economy have less to spend; meaning that the economic circulation in the region as a whole decreases.

This loss of manufacturing is seen in the falling revenues of Morgan Moe. In many ways, the company has dealt with the difficult economic climate well. It has closed underperforming stores, consolidated the workforce, and reduced overhead.

However, the laying off of many employees had some consequences. Negative press, internal rumors, and malcontent are spreading through the workforce. Websites like www.Ihatemorganmoe.blogspot.com are developing to further spread the discontent of laid-off workers.

“Mans Search for Meaning”

Upon reading this book, Jim Claussen, the Vice President of Human Relations, read a book by the psychologist Vicktor Frankl.

Man’s Search for Meaning by Viktor Frankl[ii] is the biography of a man surviving the German Concentration Camps during World War II. The book highlights three stages of decline: shock, apathy, and depersonalization followed by a period of recovery portrayed by: depersonalization, deformation, disillusionment/bitterness and finally dispersal. The key point of the book that was taken away is that in surviving a difficult time, one must fine hope in a sense of purpose.

Mr. Claussen decided that in order to affect a more positive attitude from the workforce during this difficult time for Morgan Moe, he would institute a series of management programs to help improve communications and provide a better sense of purpose to his employees.

The 5 programs

Jim Klaussen has implemented 5 programs in each of the Morgan Moe stores. Each program is highlighted by some combination of information sharing and feedback sessions with managers (brainstorming). Instead of assigning stores, Jim wanted store managers to choose which program they think would work best for their stores individual culture.

• Program I

Program I could be considered the closest analog to a control group. No changes to the traditional operational procedure were made. No store or employee performance information was shared beyond normal, and no brainstorming or manager meetings were scheduled.

• Program II

Program II is highlighted by the sharing of employee absences and sick leave metrics. The idea here is that these metrics can be directly controlled by the employee’s performance.

• Program III

Program III tracks sales and replacement rates and then shares this information. As in program II, there are no feedback or brainstorming sessions

• Program IV

This program provides employees with the same data as Programs II and III but it also allows for a time to sit down with the managers and try to develop new ways to continue to improve.

• Program V

Program V has the same brainstorming sessions as IV but it does not contain the sharing of information that program IV does.

The Study

A study was performed to track the results of these programs over the 6 months of their implementation. Measurement of turnover rates and measurements of profit were made to help quantify the changes in employee satisfaction and productivity respectively.

Additionally the study would also track the increased costs of management and implementation of these programs. It was thought that with these metrics it should be able to be determined what effect each program had.

The results of the study are below in Table 1.

Table 1: Study Results

|Program |# of Stores |Average Turnover |Weekly Profit per Month |Monthly Staff Time Cost |
|Program I |83 |Mean = 30% |Mean = $5,700 |None |
| | |SD = 10% |SD = $3,000 | |
|Program II |27 |Mean = 23% |Mean = $7,000 |$1,960 |
| | |SD = 14% |SD = $5,800 | |
|Program III |35 |Mean = 37% |Mean = $11,000 |$2,440 |
| | |SD = 20% |SD = $2,700 | |
|Program IV |67 |Mean = 17% |Mean = $13,000 |$3,420 |
| | |SD = 20% |SD = $3,400 | |
|Program V |87 |Mean = 21% |Mean = $14,000 |$2,750 |
| | |SD = 12% |SD = $2,400 | |

The number of stores is the count of how many stores implemented each program. The Average Turnover represents the rate of turnover per year and is given with a mean and standard deviation. Weekly profit is the amount of profit each week summed over the month. This is net profit without including the staff time costs averaged among all stores having chosen this program. The staff time costs represent the cost to implement each program.

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[i] SteelOrbis. US Midwest Steelmaking, Manufacturing Output Continued Decline in May . Hune 1, 2009. Available athttp://www.steelorbis.com. Accessed October 1, 2010
[ii] Frankl, Vicktor. Man's Search for Meaning. Boston: Beacon, 1963. N. pag. Print.