Case-Art Friedman-Fried mans Appliance
Art Friedman started his business in 1970 as Friedmans Appliance, selling all types of major appliances. In 1976, Friedman changed the company name to Friedmans Microwave Ovens to match his new strategy of focusing only on microwave ovens, which was the new thing back then. His goal was to be the absolute best place to buy a microwave oven and its accessories. His third strategic move was to franchise his microwave business, using Art Friedman's motivational technique of making everyone a boss. Friedmans also went online. For more than 30 years, Friedmans has been accomplishing its goal by providing superior service, good prices, unconditional satisfaction guarantees, and cooking classes to educate customers on how to get the most from their microwave. Friedmans also offers installation and repair services. Friedmans has sold more than two million microwaves. Today, Art Friedman is retired, but his franchised name is still going strong, primarily in California. Some of the indepedently owned stores that bear the Friedmans name continue to sell only microwaves, others also sell other types of appliances, and some also offer full kitchen renovations.110 The original Friedmans store employed 15 people in Oakland, California. Friedman believed that his employees were not motivated, so he implemented the following changes to motivate his employees, and these techniques are still being used today. The following conversation took place between Bob Lussier and founder Art Friedman.
Bob: What is the reason for your success in business?
Art: My business technique. Bob: What is it? How did you implement it?
Art: I called my 15 employees together and told them, "From now on I want you to feel as though the company is ours, not mine. We are all bosses. From now on you decide what you're worth and tell the accountant to put it in your pay envelope. You decide which days and hours you work and when to take time off. We will have an open petty cash system that will allow anyone to go into the box and borrow money when they need it."
Bob: You're kidding, right?
Art: No, it's true. I really do these things.
Bob: Did anyone ask for a raise?
Art: Yes, several people did. Charlie asked for and received a $100-a-week raise.
Bob: Did he and the others increase their productivity to earn their raises?
Art: Yes, they all did. Bob: How could you run an appliance store with employees coming and going as they pleased?
Art: The employees made up schedules that were satisfactory to everyone. We had no problems of under- or overstaffing.
Bob: Did anyone steal from the petty cash box?
Art: No. Bob: Would this technique work in any business?
Art: It did work, it still works, and it will always work!
Support your answers to the following questions with specific information from the case and text or with other information you get from the Web or other sources.
1. Which University--Iowa, Michigan, and Ohio State-- leadership styles does Art Friedman use?
2. Which specific motivation level, factor, and need (from the content motivation theories) applies to Friedmans Appliance?
3. Do equity and expectancy theory apply to this case? Explain.
4. Which type of reinforcement does Friedman use?
5. Do you know of any organizations that use any of Friedman's or other unusual techniques? If yes, what is the organization's name? What does it do?
6. Could Friedman's techniques work in all organizations? Explain your answer.
7. In a position of authority, would you use Friedman's techniques? Which ones?
CUMULATIVE CASE QUESTIONS:
8. Which of the Big Five personality dimensions is best illustrated in this case by Art Friedman?
9. Does Friedman have a Theory X or Theory Y attitude ?