Case 2 Controlling
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Texas A&M University, Commerce *
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305
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Information Systems
Date
Feb 20, 2024
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docx
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Uploaded by MasterWombat3606
Nordstrom seems to have successfully established budgetary controls within their organization. They have set aside funds that allow their sales associates to provide complete customer service to their customers. This allows them to go above and beyond to make sure their customers are satisfied. In turn, this establishes a strong customer base that is loyal to the store. Nordstrom seems to follow both expense budgets and revenue budgets. With expense budgets, the company sets aside funds for the year that can be used within certain measures but is not tied directly to an effort. Revenue budgets forecast for efforts over a period of time and then measure to that forecast to determine if the revenue is satisfactory or if funds should be allotted and forecasted differently in the future. These have proven to be effective controls for Nordstrom.
Behavioral controls are defined as, “the monitoring and management of appropriate actions by employees.” (LePine, A, Fadil, & Reuer, 2021)
. Nordstrom does in fact use behavioral controls within their company. For example, in the second story from the article, the customer could not find the shoe color and size of her liking in the Nordstrom store. The clerk then made a
few calls and found the pair of shoes the customer was looking for at one of their competitor's stores, Macy’s, and had the shoes shipped to the customer under Nordstrom's expenses. Another example that Norstrom uses behavioral controls is when a man is looking for an Armani tuxedo, one that Norstrom does not even sell. Knowing that they do not sell that brand, the sales associate still took the customer's measurements, just in case they were able
to find one somewhere else. Once they found one in another state, had the tuxedo altered and shipped to the customer, ready to wear. Outcome controls, “focus monitoring attention on results rather than the inputs used.” (LePine, A, Fadil, & Reuer, 2021)
. Nordstrom also uses outcome control within their company. For example, in 1975, the company took the place of an old tire shop when they moved locations. A customer from the tire shop did not
know this and went to the Nordstrom store to rent tires. With no questions asked, the store took the tires and refunded the customer the full price of the tires he brought in. The service orientation that Nordstrom’s customer service provides has proven to
be extremely valuable and set the bar high for competitors. The customer service stories should be shared with the company in a quarterly cadence. This will allow an open opportunity to share with the staff how far service truly spans and the customer base that builds.
From the balanced scorecard elements, Nordstrom seems to view customer perspective, internal business process, and learning and growth as most important. Nordstrom employees go out of their way to meet the customer’s needs. “Use good judgment in all situations,” (Erdogan & Bauer)
written on the back of the employee handbook card, focuses on the internal process of customer satisfaction. “
By leaving it in the hands of Nordstrom associates, the company seems to have empowered employees who deliver customer service
heroics every day.” (Erdogan & Bauer)
. This statement describes inputs to innovation under the learning and growth element for Nordstrom associates.
References
Erdogan, B., & Bauer, T. (n.d.). Nordstrom’s Customer Service Culture Serves as a Control Mechanism. Case in Point
.
LePine, M. A., A, L. J., Fadil, P. A., & Reuer, J. J. (2021). Connect Master 2.0 Managment.
New York: McGraw Hill LLC.
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