Video Title: Zane’s Cycles: Foundations of Control
Run Time: 6:57
Classroom Application: Instructors will find this video useful in the study of organizational structure and foundations of control within an organization. Zane’s Cycles uses a relatively loose organizational structure and an employee empowerment model of control. This video will provide students with an example of how the foundations of control within a company influence the overall environment of the organization.
Synopsis
Zane’s Cycles, located in Connecticut, is one of the largest suppliers of bicycles in the world. They value every transaction with a customer, regardless of how small that transaction may be, looking at each customer for the potential of what that customer may offer the company over a lifetime. The company focuses on satisfying customer needs, rather than just trying to sell a particular product.
The organizational structure at Zane’s Cycles is relatively loose. Employees know what is expected of them and tend to carry out those expectations independently. Management is willing to become involved in situations when necessary, but with their employee empowerment model, such interactions are seldom required.
Discussion Questions
1. What makes Zane’s Cycles unique in how they view each potential customer that enters their store? Discuss the advantages and disadvantages of this customer service model.
The aspect that makes Zane’s Cycles unique is that every single customer that comes through the door is valued for his or her potential lifetime purchases, not a single transaction made that day. Therefore, even customers shopping for one small item are valued the same as someone who comes in to make a very large purchase. The staff at Zane’s Cycles will consider what each person may come back into the store to purchase throughout their entire lifetime and try to make the shopping experience one that will prompt the customer to return to the store many times.
The possible advantages of this customer service model include gaining repeat customers, achieving customer loyalty, and creating positive brand recognition. Possible disadvantages include allocating enough time resources to provide each customer with assistance, even for small purchases, and keeping an adequate number of employees on the floor at all times to meet this goal.
2. Describe the physical organization of Zane’s Cycles store. How does this organization help to support the company’s mission? What are the possible disadvantages of this physical organization?
The store is divided into sections based on the type of customer that would be interested in that class of product. Rather than all bicycle helmets being grouped together in one section of the store and all bicycles in another, recreational bicycles, helmets, and other related products are in one part of the store and high-end enthusiast bicycles, helmets, and gear are in another part of the store.
This physical organization helps to support the mission at Zane’s Cycles because when a customer enters, they can determine which part of the store is appropriate for their needs. This helps the staff at Zane’s Cycles to focus the conversation on what is important to the customer. This physical organization of the store helps to provide a better shopping experience for the customer and supports the staff in meeting the customer’s needs.
A possible disadvantage of this physical organization is that customers may have difficulty locating items within the store. If they are looking for a recreation bicycle, for instance, they may go directly to an area of the store where they see bicycles located, only to discover those are racing bikes rather than recreational bikes. Until customers are familiar with the organization, they may have difficulty locating the part of the store appropriate for meeting their needs.
3. Discuss the employee empowerment model implemented at Zane’s Cycles.
The employee empowerment model used at Zane’s Cycles refers to the foundations of control within the organization. Zane’s Cycles uses a relatively loose organizational structure. In general, employees know what is expected of them and everyone works together to complete necessary tasks and try to satisfy customer needs. The owner of the company is willing to intervene with situations involving the customer when necessary, but with the employee empowerment model such interactions are rarely required. Employees are aware of the company’s mission to satisfy customer needs and strive to meet this goal.
Quiz
1. Which of the following describes how Zane’s Cycles values each customer when they walk into the store?
a. more value is placed on customers who go straight to the cycling enthusiast’s section of the store
b. more value is placed on customers who go straight to the recreational section of the store
c. each customer is valued for the amount of potential profit they could bring into the store during their lifetime
d. each customer is valued for the amount of the transaction they make on that particular day in the store
Answer: c
Explanation: Zane’s Cycles values each customer by the value of his or her potential lifetime purchases. If a customer returns to the store for a new bike or new equipment at every stage during their lifetime, this would result in approximately $5,600 in profits for the company. Therefore, even customers shopping for one small item are valued the same as someone who comes in to make a very large purchase.
2. Zane’s Cycles uses an employee empowerment model. Which part of the management process plays a vital role in minimizing the chance of potential problems occurring with this type of model?
a. planning
b. organizing
c. leading
d. controlling
Answer: d
Explanation: Many managers are reluctant to use an employee empowerment model because they fear something will go wrong for which they would be held responsible. The implementation of an effective control system, however, can provide information and feedback on employee performance and minimize the occurrence of problems.
3. At Zane’s Cycles, which of the following pairs of products would most likely be found in the same section of the store?
a. a new high-end bicycle and a new recreational bicycle
b. an elaborate racing helmet and a children’s safety helmet
c. enthusiast riding gear and a high-end bicycle
d. a recreational bicycle and enthusiast riding gear
Answer: c
Explanation: The physical organization of the store is such that all high-end products of interest to a cycling enthusiast are grouped together in one section of the store, and products designed for fun, recreational biking are in a separate section of the store.
4. Which of the following would a good salesperson at Zane’s Cycles most likely say to a family interested in purchasing a new bicycle for their 10-year-old boy?
a. “This bicycle is made of sturdy titanium and will likely last many years.”
b. “This bicycle has 18-inch wheels, which is a good measurement for a rider of his size.”
c. “This bicycle is fast, sturdy, and safe. It would make a great bike for him. Would he like to ride it in the parking lot to try it out?”
d. “This bicycle is one of our best sellers, with a shock-absorbing feature, internally geared rear hubs, and bigger wheels for a smoother ride.”
Answer: c
Explanation: Salespeople at Zane’s Cycles are encouraged to talk about the riding experience the product will create more than the actual product. The owner believes that customers wish to have their needs in relation to the product satisfied, rather than hearing about the materials used to create a product or the technical specifications of that product.
5. Which of the following individuals is least likely to be hired for a retail sales position at Zane’s Cycles?
a. a bicycling enthusiast who has many years experience working in the cycling industry
b. a very personable individual who enjoys cycling for recreation
c. a young person who enjoys outdoor recreation
d. a middle-aged individual who cycles three times per week for exercise
Answer: a
Explanation: Zane’s Cycles normally does not hire cycling enthusiasts because they fear that such individuals will believe they know more about cycling than the person to whom they are speaking. Since Zane’s Cycles wishes to create a positive shopping experience for customers, they do not want customers to ever feel they are being treated as less knowledgeable than someone in the store.