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PetMed Express Inc. Organizational Transformation

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PetMed Express is America’s largest pet pharmacy, and continues to be the pet industry’s most known brand. The company provides pet owners and consumers an easy way to procure pet drugs through their 1-800-PetMeds telephone contact centre, websites, and direct mail catalogue. It is their goal to deliver products with exceptional service, savings and convenience.

This paper adopts the Burke-Litwin Causal Model for defining and evaluating the primary transformation processes at PetMed. The model follows the theory of open systems that breaks down an organisation’s activities into twelve variables. The set of variables are grouped into transformational and transactional factors (Falletta, 2005). This paper focuses on the seven transactional variables, such as structure, tasks and competencies, management methods, processes and policies, work unit environment, motivation, and individual needs and objectives.

PetMed Express Inc. Organizational Transformation

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Structure

Burke-Litwin Model describes the organizational structure as an arrangement of roles and individuals into different areas and levels of accountability, decision-making authority, coordination and relationships (Falletta, 2005). Such a structure shall support the mission, priorities and strategy of the company in order to achieve the firm’s competitive advantage (Porter, 1985).

PetMed Express can be considered as a mechanistic organization that follows the functional departmentalization structure. The company has highly specialized departments with high formalization and a clear chain of command. The company’s structure supports its cost leadership strategy by increasing consistency and reducing cost through centralization and management control (McShane, 2001).

The business currently has 248 full-time staff divided into four customer service divisions, distribution, pharmacy, and corporate offices. The customer care department consists of customer care representatives in a call center environment while the warehouse department consists of supervisors and associates. The pharmacy department employs pharmacists, pharmacy technicians and support. The corporate department consists of accounting, regulatory, marketing, Finance, recruitment, and human resources.  Below is the organizational diagram of PetMed. (PetMed Express, 2009)

PetMed Express Inc.Transformation

Figure 1.  PetMeds Organizational Chart

To meet the demand of customers effectively, PetMeds employed 143 people in customer service and marketing, 58 in pharmacy, and 34 in warehouse and purchase. Therefore, the structure of human resources in the company is aligned with its mission of delivering exceptional service, savings and convenience to its customers while maintaining a corporate strategy of cost advantage.

Tasks and Skills and Motivation

The business success of PetMed Express is attributed to the core competencies of their customer care, warehouse and pharmacy department. According to Prahalad and Hamel (1990), the core competencies of a company are the collective learning in the organization that involves communication, involvement and deep commitment to working across organizational boundaries. The core competencies therefore provide future exposure to a wide range of markets and contribute significantly to the consumer benefits of its goods.

The Burke-Litwin Model defines tasks and skills as the actions needed for task effectiveness that requires particular skills and expertise necessary to conduct the work (Falletta, 2005).  An individual’s tasks and abilities, combined with his encouragement or improved actions to accomplish goals, have a direct effect on success and efficiency in the organisation. In other words, if the roles and abilities suit the work requirements, an inspired and motivated employee will fulfill his duties and responsibilities. Management of human resources has an extensive recruitment and selection strategy which identifies the needs of the job as well as the employee’s competency.

The bulk of the employees at PetMeds are in customer care because the company relies on revenues generated through the customer contact centers, which provide accurate product information and competitive pricing to customers. The pharmacy staffs are second in terms of number of people employed because they are the ones who serve the prescription needs of customers and pet owners. The third highest number of employees comes from the warehouse department because they are the ones who prepare the prescription and non-prescription orders for an accurate, quality and timely shipping of all customer orders.

Management Practices and Work Climate

The Burke-Litwin Model conceptualizes the management practices as what managers do in the normal course of events with their human and material resources in order to achieve the organization’s strategic objectives and goals (Falletta, 2005). Management practices including human resource practices which focus a strong service orientation create a positive work climate for employees such that it increases the performance of the organization (Schneider & Bowen, 1985). The work climate is the collective impressions, expectation and feelings of individual that affects the relationship across the organization.

At PetMeds, the management and human resource practice includes training, coaching, guidance and feedback to employees. The customer care representatives are required to complete classroom trainings for providing exceptional service to customers as well call center on-the-job training. Pharmacists and pharmacy technicians undergo an extensive training program for accurate and quality service to customers. Warehouse training is done through hands-on, on-the-job training with an experience team leader as well as cross-training in other functional areas. (PetMed Express, 2009)

Systems and Individual Needs

Systems are standardized policies and mechanisms that are designed to facilitate work while individual needs and values are specific psychological factors that provide desire and worth for individual actions (Falletta, 2005). At PetMeds, the company has invested in state-of-the-art information systems and infrastructure for their customer care representatives and pharmacists, which are integrated in their organizational systems of performance appraisal, budget allocation, reward system and human resource allocation. The warehouse processes is operated using computer-aided manual and automated fill stations. The company also offers employee benefits such as medical, dental, vision, insurance, 401K and preferred legal plan, aside from its competitive compensation, that would help motivate every individual, attract new employees and retain talents.

The executive management has a compensation program which is designed to motivate and reward employees for achievement of positive corporate results and promote accountability.  The objectives of the program include attracting and retaining top talents, promote corporate performance accountability, promote individual performance accountability, and align stockholder interests. (PetMed Express Inc, 2009)

Bibliography;
  • Falletta, S. (2005). Organizational Diagnostic Models: A Review & Synthesis. Retrieved October 18, 2009, from Leadersphere: http://www.leadersphere.com/img/Orgmodels.pdf
  • McShane, S. (2001). Organizational Behavior. New Jersey: McGraw-Hill.
  • PetMed Express Inc. (2009). Annual Report. Pompano Beach, Florida.
  • PetMed Express. (2009, November 4). PetMeds Careers. Retrieved November 20, 2009, from 1-800-PetMeds: http://careers.1800petmeds.com/
  • Porter, M. (1985). Competitive Advantage. New York: The Free Press.
  • Prahalad, C. K., & Hamel, G. (1990, May-June). The Core Competence of the Corporation. Harvard Business Review .
  • Schneider, B., & Bowen, D. (1985). Employee and customer perceptions of service in banks. Journal of Applied Psychology , 70, 423-433.

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