The Fall of Kmart

Attention, Kmart Shoppers! We Have Failed

Jennifer Kouns

University of Phoenix

Christopher Ebert

11/20/2008

Attention, Kmart Shoppers! We Have Failed

It was January 22, 2002 when Kmart had to file Chapter 11 bankruptcy due to negligence by management fueled by pretentious attitudes, and misdirected business strategies. While they eventually emerged from this bankruptcy 15 months later, many mistakes were made that could have been avoided. “Lots of companies fail because they do not adapt to changes in the marketplace, so it isn't necessarily surprising that Kmart descended into bankruptcy due to a series of bad management decisions” (Lewis, 2003). In its prime during the 1970s, Kmart put numerous retailers out of business. ‘Attention, Kmart shoppers’ is what any customer would here when a store employee would flash a blue light offering deep discounts on specific items at any surprise moment. The flashing blue light that signified the blue light special became the defining marketing strategy for Kmart. Kmart’s imminent failure could have been avoided if management could have recognized how their organizational behavior was contributing to the downfall.

It is not a surprise that Kmart has a history of eroding profits and market share given their management’s poor organizational behavior. Organizational behavior “is concerned with the study of what people do in an organization and how their behavior affects the organization’s performance” (Robbins, Judge, 2007). Organizational behavior touches on many aspects in the workplace. Kmart failed at several organizational behaviors, which could have possibly made a difference between filing bankruptcy and not. One of the top areas of failure is Kmart’s resistance to improve customer service. Kmart was known for its lackluster employees and dirty stores which gave them an identity of being cheap. The consumer wants to feel as if they are receiving good quality merchandise even though the...