Report on the Failed Collaboration of Sears and Kmart: A Case Study

This report provides a comprehensive analysis of the failed collaboration between Sears and Kmart, examining the merger and acquisition from a leadership and organizational behavior perspective. It begins with an introduction to both companies and the circumstances surrounding their m...Read More

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Sears and Kmart

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Table of Contents
Introduction...........................................................................................................................................1
Organization Behaviour.........................................................................................................................2
Suggestions and Recommendations.......................................................................................................5
Organization Behaviour Theories..........................................................................................................6
Conclusions...........................................................................................................................................7

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Introduction
Sears is the biggest department stores and one of the leading retailers in the world.
Sears Holdings Corporation is the biggest publicly traded company which is the parent
company to all such brands as Kmart and Kenmore. As a parent company, the chain stores
Kmart and sears are founded after Kmart has purchased Sears in the year 2005. It is one of
the largest best retailing company in the United States. In the year 2004, the management of
Kmart holding announced its whole attention to purchase different companies under new
corporations. The merger of Kmart and Sears closes its operations in the year 2005, as both
the parties have affirmative shareholder votes of both the companies (About Us, 2019).
Sears had started investing in larger off-mall stores and purchased dozen of current
supermarket locations to accelerate the process. Kmart is an American biggest department of
box stores chains and headquarters in the United States and Illinois. The incorporation of the
company is in the year 1899 as S.S. Kresge Corporations and renames it with Kmart
corporations in 1977.
There is an operation of 2323 discounts stores and biggest locations of the
supermarket in the United States. The report focuses on the concept of a failed collaboration
of Sears and Kmart with its merge and acquisitions. This is expected to close another round
of stores as a bankrupt department store chains. The decision may be wrong in terms and they
lead to disclosures their own companies from the time at the end of 2018. In 2014, the report
shows about Kmart was in the condition of liquidating dozen of their stores across the whole
nation in the United States (About Kmart, 2019).
Organization Behaviour
Organization behavior is a system of shared values and beliefs that are shaped
following company internal structures of employees and team leads and they are directly

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interested in producing behavioural norms. When there is a merger of Kmart and Sears
companies, there are various conflicts arises due to merging. The strategic their competitive
advantage is overall cost leadership is based on lost cost product goods throughout the entire
chain. The problem arises with the human resources department as they are not able to cope
up with the situation and recruiting talented employees with all proper skills and attain a
proper set of skills (Organizational Behavior Evaluation: Sears Holdings Co. , 2007).
The company lack in the human resource department and it is the most important part
of every organization and reinforced each employee to do more work and provide them with
fewer rewards. There is no management structure and they are lacking their contributions in
profit maximization, competitive prices, and a possibility to reach to them. The stakeholders
and analysts are planning their ideas in not better way. The effective use of business model is
the perfect solution for Sears in short term marketing and the rewards strategies should be
improved (FARFAN, 2019).
Employers used to pay the prices but employees are not at all satisfied with the
internal working conditions of the environment. The problems which occur in the internal
structure of different leadership style as per the requirement of their personalities. The
chairman and SEO of Sears and Edward Lambert are categorised as an autocratic leader that
has become the major root cause for the downfall of the organization. It is the basic drawback
to be achieved by the whole company in their formations. The reputation of Kmart has a
major history of buying chain solutions and not be able to follow and get value of these
solutions (Combined Sears-Kmart Faces I.T. Challenges, 2018).
Autocratic leaders dictate work methods that keep the distance from all their
employees and minimize the overall participation by taken on one side decisions and they
believe that they are the best for the organization regardless of the major consequences. They

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always expect employees to follow the orders which are given by leaders in the organizations
(Maley, 2019).
The retail industry is the most competitive and faces many significant challenges to
achieve prominence. The retail business is exceedingly aggressive and all things considered,
Holdings faces critical difficulties to accomplish unmistakable quality. One critical test is the
way that the deals and benefit efficiency of numerous contender stores surpass that of
Holdings' stores.
In this way, the Company accepts the best close term worth, and its most prominent
quick test originates from better-using Holdings' current base of more than 3,000 stores to
convey a more prominent incentive to clients and eventually Holdings investors.
The Company will endeavour to more readily use the huge scale it as of now has, just
as the Company's image quality and administration contributions to improve Holdings' multi-
channels and keep on giving clients motivations to shop Holdings all the more every now and
again (Wahba, 2018).
While the Company's central goal standards (fabricate client connections, get more cash-
flow and improve each day) are straightforward in idea, they can be hard to execute inside the
setting of an exceptionally aggressive retail condition. In this way, the Company accepts that
it must improve its systematic abilities and cultivate control of nonstop learning and reality-
based basic leadership to effectively execute these standards. The major problems which are
faced by Sears and holding corporations when there are a merger and acquisitions of Kmart
and Sears as (Isidore, 2010).

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 The lawsuit alleging the damage in the environment and they are filled by all the
regulators. There is a lawsuit to dissolve the merger was filed and the profits are down
by 45 percent.
 The rising problems with that exist with the major quality of the products and safety
of their customer care.
 The blackout kept a few customers from making returns, getting on the web requests,
or getting to Shop Your Way steadfastness focuses in Sears and Kmart stores and left
some Kmart stores incapable to process non-money instalments.
 It likewise disturbed conveyances and kept clients from making administration
arrangements for broken washers, coolers, or different issues.
Suggestions and Recommendations
Sears is the biggest company who has merged with Kmart with an ever-increasing
amount of debt and decreasing amount of equity. The company does not have a well-
structured framework that is not geared for the competitive retail environment. The company
should attain more leadership and smooth organization practices that took the steps in a
positive framework. The major steps that are recommended for the company are to identify
the problem, search for all the alternatives, weight the required alternatives, make a perfect
choice that may help organizations, implementation of various choices and evaluate the
results and do if necessary changes are required (Hicks, 2019).
There should be the adoption of diversified Upgradation to the stores in strategic
locations. The company should achieve proper delivery of their products with trendy and
forum practice. Sears and Kmart should grow their business by providing quality products to
their consumers so people can come together with greater values by building positive
relationships with their customers for a long period. The company should build customer

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relationship by providing various offers to make money and improve practices regularly
(HALZACK, 2019).
There should be a formulation of effective strategies before they have failed in the
markets. All the retailers with the discount ones must have to focus on their product strategy
to appeal to core customers. The use of expansion strategy with the insular company and they
are brought to refresh the store brands. The company should make its plan with proper
guidance and effective team structures should be framed from the management of its supply
chain because the company measured potential profitability by all its gross margin
percentages. The inefficient ordering and different supply chain management should be
assigned with more cost and arrive later with the analysis of competitors (Bogenrief, 2012).
Sears and Kmart experience should benefit the consumers and must be reinvented
and designed. The hardest thing for a notable brand to do is center and penance. To flourish,
Sears must do both. Singes needs to concentrate on a convincing situating that forfeits is
everything to all individuals business with colossal scale, and change itself into a business
that offers an exceptionally significant incentive barely focused to choose high worth clients
(Dawson, 2012).
Organization Behaviour Theories
The proper analyziation is based on effective organization behavior theories in the
internal management styles of the company. The HR community at sears has been widely
identified as the biggest group in leading all the change efforts with its people. The sound
knowledge of the efforts is related to concepts, skills, and theories that are applied in
effectiveness to operate goals and address real-world issues to the company. The most
impact of the HR policies has the management of people to reflect. The company uses three

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models that are associated with measurements in the dictators and some of the following
models have widely helpful in managing the company goals and objectives.
The first competitive strategy they used is to compelling place to work with measured
associates and different attitudes towards their work. There is a compelling place to shop that
contains measures of both the customer satisfaction and retention of the customers. This
contains measures of an increase in the growth structure which operates margins and return
on assets. The effective use of theories helps to build and manage the theories in the
organization behavior for a long time. The planning steps should be formulated in the process
of determining the desired future position and how to get the best from it
(UNDERSTANDING AND MANAGING ORGANIZATION BEHAVIOUR, 2019).
Conclusions
The report suggests about the failed collaboration of Sears and Kmart when they
merge and acquire in the United States. The introduction of the various models and
strategically framework are been presented and how the impact has been registered and failed
in the actual process. The background of the case is being analysed thoroughly with the
relevancy of concepts and theories in its internal structure of frameworks.
There are various issues suggested which are compiled with the company as it has
failed their collaborations in their competitive environments. Analysis of the internal
structure with all the models and theories are being analysed in considering the impact of a
company. The failed mergers and acquisitions had a purpose of growth from acquiring new
products and customers. The company loses its focus on its desired objectives to devise and
concentrate on establishing necessary integrations of any mergers and acquisitions.

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Bibliography
About Kmart. (2019). Retrieved July 19, 2019, from Sears Holdings :
https://searsholdings.com/about/kmart
About Us. (2019). Retrieved July 21, 2019, from Sears Holdings : https://searsholdings.com/
Bogenrief, M. (2012). Three Things That Kmart Needs To Fix If It Wants To Survive.
Retrieved July 19, 2019, from Business Insider: https://www.businessinsider.com/is-
it-blue-lights-out-for-kmart-2012-1?IR=T
Combined Sears-Kmart Faces I.T. Challenges. (2018). Retrieved July 19, 2019, from
Information Week: https://www.informationweek.com/combined-sears-kmart-faces-
it-challenges/d/d-id/1028577
Dawson, T. (2012). The Future Of The Sears Brand Lies In Reinvention. Retrieved July 21,
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future-of-the-sears-brand-lies-in-reinvention.html#.XTQDLugzbIU
FARFAN, B. (2019). Why Sears' Policies and Business Strategy Are Leading to Its Decline.
Retrieved July 19, 2019, from Balance MB: https://www.thebalancesmb.com/sears-
worst-practice-core-business-strategy-2891858
HALZACK, S. (2019). Here's what Eddie Lampert should do with Sears now. Retrieved July
19, 2019, from Crains : https://www.chicagobusiness.com/opinion/heres-what-eddie-
lampert-should-do-sears-now
Hicks, T. (2019). Seven Steps for Effective Problem Solving in the Workplace. Retrieved July
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Isidore, C. (2010). Things are bad at Sears. They're worse at Kmart. Retrieved July 20, 2019,
from CNN Business: https://edition.cnn.com/2018/10/21/business/sears-bankruptcy-
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Maley, B. (2019). Why Sears Holding Corp. Will Go Bankrupt. Retrieved July 21, 2019, from
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Organizational Behavior Evaluation: Sears Holdings Co. . (2007). Retrieved July 21, 2019,
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UNDERSTANDING AND MANAGING ORGANIZATION BEHAVIOUR. (2019). Retrieved
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Wahba, P. (2018). Sears Has Only Itself to Blame for Its Decline. Retrieved July 19, 2019,
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