Course Code: Essay Example

Best Buy Case study

Executive summery

This report discussed various concepts of management in relation to Best Buy Company which is the leading consumer electronic retailing company in USA. The company discussed the various concepts which been applied by the company to create a competitive advantage like engaging in corporate social responsibility, ensuring good relationship with the stakeholders by engaging employees in decision making and ensuring that the customer feedback has been effectively analyzed. The impact of social responsibility on the stakeholders is that the employees develop satisfaction with the management of the organization because they will be compensated well. In addition, the customers benefit from the quality products and services offered by the organization while the shareholders will get high value for their shares. The importance of recycling old electronics according to this report is that it helps to save customers money, helps to preserve the environment and helps to make use of the old electronic devices. The report further discussed the ethical challenges which are facing organizations in the b21st century and they include fraud, lack of transparency and accountability, safety and health of the employees, tax evasion and conflict of interests. In order for the manager of Best Buy Company to uphold the ethical principles, he should ensure the employees are trained concerning ethics, promote effective communication and hire managers who have good reputation about ethics as they will influence the behavior of other employees. Further, the report recommended that the manager should ensure regular auditing and effective follow up of any business transaction so as to ascertain the actual figures of the transaction and finally imposing strict penalties for any individual found guilty of engaging in unethical practices like fraud.


Strategic business management is the only strategy which is applied by organizations to create a competitive advantage. Many organizations have failed to be competitive in the market because they fail to strategize their functions effectively. An organization which has effective strategies will always succeed in the market it will focus on the customers and how the resources in the organization are utilized to maximize the output by applying the ethical principles (Lync 2010). One of the companies which have excelled in the market as a result of the strategic management is the Best Buy Company in USA. Best buy is a retailer company which is the leading consumer electronic retailer in the United States of America. The head office of the company is in USA but it operates in other countries and has high interests of investing in China and Mexico. Due to customer desires, the company introduced a recycling system as a way of improving the corporate social responsibility. The company has applied various strategies to improve its competitive advantage. In this regard therefore, this report will discuss the strategies applied by the organization to create competitive advantage and the importance of introducing recycling of the old electronics. In addition, the report will discuss the main challenges facing businesses in the 21st century and how to formulate strategies to uphold ethical standards when doing business in relation to Best Buy Company.

How Best Buy Company creates competitive advantage

Best Buy Company has applied various strategies to create competitive advantage. One of the strategies which the company has applied to create competitive advantage is the stakeholder oriented approach. This is the approach which ensures that there is good relationship between the organization and the stakeholders. It is important to create good relationship with the stakeholders because they help to determine the success of the organization (Patron 2008). When the organization does not focus on building good relationship with the customers, it will be hard to build its image because the stakeholders will develop negative attitude towards the operations of the organization. The following are some of the ways in which the company builds good relationship with the stakeholders.

The first strategy is consumer engagement policy. The management of the company engages in creating good relationship with the customers by using various tactics like suing the media to interact and get feedback from the customers. From the feedback from the customers, the company has been able to provide quality products and services after focusing on the needs of the customers (Patron 2008). For instance in the year 2007, the company published its corporate social responsibility report so that the stakeholders can understand what the company is doing to sustain good relationship. In this regard, the company has been able to create good relationship with the stakeholders [hence promoting good image of the company which helps to attract and retain customers thus competitive advantage.

In addition, the company is applying the strategy of conserving energy at one store. The company joined Business for Innovative Climate and Energy initiative in the year 2010 with the aim of ensuring they conserve energy consumption. This programme helps the company to reduce the cost of energy being consumed and this translates that the company can experience los cost of production (Porter 2004). Eventually, the prices of the electronics will be low as a result of reduced cost of production. This helps the company to attract and retain many customers leading to competitive advantage.

Moreover, the company has engaged in environmental sustainability. The company has entered into partnership with ENERGY STAR so that it can sell energy saving products to customers. This saves the money of the customers and also helping to preserve the environment (Porter 2004). This is one way in which the company preserves the environment which improves its reputation to customers. The company also has a website where the customers can learn how they could save costs by installing energy saving products. This is another strategy which helps to create good relationship with the customers and has therefore improved the reputation of the organization thus leading to competitive advantage.

Finally, the company recruits qualified and competent employees who can help to solve technical problems of the customers (Porter 2004). The competent staff listens to the employees’ opinions so that they can develop strategies to motivate their staff. In addition, the management encourages employee networks like [email protected] Buy so that the company can improve the experience of both male and female employees. This experience helped to improve the female buying power which increased the female buying power from 14.3% to 15.7% in the year 2007. In this regard therefore, the company has created a competitive advantage than the competitors.

Benefits of helping customers recycle old electronics

The company is investing a lot of resources in helping the customers to recycle the old electronic products if they cannot be recycled by the company itself. This is a good investment because of the following reasons. The first reason is that recycling program will help to offer environmental benefits which will improve the corporate social responsibility of the company. The recycling programme will help to reduce the electronic wastes which could pollute the environment. This is because it reduces dumping of the electronics instead they will be recycled (Thomas et al 2004). Recycling also helps to reduce the emission of gases to the atmosphere. Old and worn out electronics are recycled so that they could be in good conditions and this will reduces environmental pollution through emission of gases. In this regard therefore, investing in the recycling programme will help to preserve the environment which will in turn improve the reputation of the organization among the stakeholders leading to competitive advantage.

In addition, the recycling investment will influence the operations of the manufacturers positively. The company and other manufacturers will start manufacturing products which are easily recyclable. This will also help to preserve the environment because once the electronic has been worn out; it can be recycled to improve its usefulness (International Business Report 2008). Best Buy Company is supporting this movement by investing the recycling programme which will help to make use of the old electronics thus saving the consumers money.

Moreover, the investment of recycling the old electronics will helps to save the customers’ money. This is because the customers will sale the old electronics back to the company and in return they will recover some money back. Unlike other companies which do not offer recycling programmes, Best Buy Company will be able to meet the needs of the customers by buying back the old electronics to save some money for the customers (International Business Report 2008). This has helped to improve the relationship between the customers and the organization thus improving its reputation leading to competitive advantage.

Furthermore, Best Buy Company has engaged in partnership with many recycling companies which are committed to ensure the recycling programme is effective. The collaborative companies are the ones which have the same interests of recycling the products (Thompson 2005). Best Buy Company follows up to ensure that the partners recycle the products according to the acceptable practices of recycling the products. Through these partnerships, the company has managed to create good relationship with other companies and also the partnerships have helped to reduce environmental pollution by ensuring minimal keeping of useless electronics on the landfill.

Recycling also helps to improve the sales of the organization. It is a kind of after sale service to the customers. Once a customer has bought large quantity electronics, the company can offer free transport and can take away the old electronics to recycle them for free (Thompson 2005). This encourages the customers to buy products from the company hence the recycling programme helps to attract and retain customers.

Impact of corporate social responsibility on key stakeholders

The social responsibility of Best Buy Company impacts on all stakeholders of the organization. In the first place, the social responsibility policy as practiced by the company impacts on the employees in that the company selects employees who are qualified and competent to offer technical advice to the customers. Through social responsibility, the company has managed to involve employees when making decisions (Carroll & Buchholtz 2006). The employees’ ideas are taken into consideration by management and this creates good relationship between the management and the employees. In addition, the company has engaged in economic responsibility which implies that the employees are compensated well in terms of salaries and wages. This improves the motivation of the employees and reduces employee turnover.

The shareholders on the other hand expect that the management of the organization should rational to improve the value of their shares. Best Buy Company has engaged itself in economic activities which have helped to improve the productivity of the company. This implies that the shareholders will be satisfied with the value of their organization (Jonker et al 2005). In addition, the shareholders have confidence in the management of the organization and as a result they have confidence in their investment and this has attracted more investors to the company. Therefore the social responsibility has created confidence in the company shareholders and this has attracted many investors due to effective leadership. The value of the shares has also been on the increase due to profitability of the organization.

The consumers on the other hand have benefited from the social responsibility of the organization. The company focuses on the demands of the customers which imply that the customers get quality products and services from the organization. The company focuses on the feedback of the customers and implements them and this improves the customers experience (Hemingway 2005). For instance, the company has created online website where the customers can access the importance of using energy saving electronics so that they can save the energy lost. This information is provided for free satisfying the needs of the customers. Further, the company recycles the old electronics from the customers and this has improved the relationship between the organization and the consumers.

Finally, the social responsibility of the organization has impacted on the suppliers. The company has improved the experience of the suppliers by compensating them well without exploitation. Moreover, the company’s social responsibility has influenced the operations of the suppliers (Hemingway 2005). For instance during the annual meetings, the suppliers advised on how they can cut their cost down by applying the appropriate technology. This is one way in which the company’s social responsibility has influenced the operations of the company.

Ethical challenges facing organizations in the 21st century

There are a number for ethical factors which have faced many businesses in the 21st century. The first ethical factor is lack of accountability. The management of many organizations does not have clear policies to manage the accountability in terms of how resources are being utilized organizations (Barth 2003). There is lack of effective strategic planning in which organizations should comply with when using the resources of the organization. In this regard, there is misuse of resources of the organization which leads to lack of effective provision of the intended purposes.

In addition, there is the ethical issue of fraud. The accounts of many organizations have been experiencing ineffective management and this has led to embezzlement of funds of the organization. For instance, the accountants can inflate the expense accounts of their respective organizations so that they can enrich themselves (Barth 2003). This is because there is lack of effective auditing to ascertain how the resources of the organization are utilized. Therefore fraud challenge has been facing many businesses in the 21st century.

Tax evasion is another ethical issue facing many businesses in the 21st century (Barth 2003). Some of the businesses try to evade paying tax which is unethical practice. This practice is becoming very common because the organizations want to generate more revenue by engaging in corrupt deals of not paying the tax. Some businesses are illegal and therefore the owners could not want to be identified hence they evade paying tax. This ethical issue is mostly experienced in developing countries.

There is also conflict of interest as one of the ethical issues affecting businesses in the 21st century. The employees of the organization can take advantage of their positions to enrich themselves. For instance, the top management of the organization can award contracts to the people they know well so that they can get some share (Boatrigh 2000). This brings conflict of interests among the management team since some top management take advantage of their positions to enrich themselves. The end result is that there will be poor relationship among the employees.

In addition, lack of fair working conditions is another ethical challenge facing businesses in the 21st century. Most of the organizations in the 21st century take little concern for their employees (Boatrigh 2000). The employees are exploited because their compensated is not worthy what they are supposed to get. This is unethical challenge because the organizations do not abide by the labor laws set aside which should guide them when managing the employees.

Finally, health and safety is another ethical challenge facing many businesses globally in the 21st century. The health and safety of the employees is given little regard because the managers are much concerned with the profits and not the welfare of the employees (De George 2003). The employees engage in risky operations which could affect their health but most of the management of the organizations do not consider this thus the health and safety of the employees is affected.

Most of these ethical challenges are as a result of poor management of the organizations. The managers of organizations have shifted their approach of managing organizations. This is in the context that the managers are focusing on profitability of their organizations forgetting the welfare of the employees (De George 2003). Ineffective compensation of the employees has also led to ethical challenges like fraud and lack of accountability as well as integrity.

Recommendations how to create a more ethical culture

In order for the managers of Best Buy to create an ethical culture in the organization, the top management should be able to define the meaning of the ethics in the organization. There should be clear definitions of ethics and the code of conduct which should be upheld by the employees while performing the duties of the organization (Johnson 2003). This is one way in which the employees will understand the ways in which they will avoid engaging in unethical practices and this will help to avoid incidences which will lead to unethical practices.

The management should also ensure that there is effective internal communication to communicate the ethical issues to all employees. The information about ethical challenges should be disseminated well to the employees so that they can understand what is expected of them (Johnson 2003). The ethical message should be communicated effectively to the employees so that they will learn to practice it thus leading to better management of the ethical issues.

In addition, the management of Best Buy Company should develop Programmes where the employees can attend the ethical training and the employees will be taught how to identify unethical practices and the best ways to uphold the ethical principles (Klein 2002). Through training, the employees will be encouraged to consider the ethical issues and how to avoid unethical issues.

Moreover, the top management of the organization should ensure that it hires managers who have good reputation in terms of ethical standards. This will help to influence the behavior of the employees because the employees will try to emulate what their leaders do (Klein 2002). In this regard, hiring managers with ethical reputation will help to influence the behavior of the employees and if they used to engage in unethical practices, the managers will influence their behavior and eventually they will abandon unethical practices and create ethical standards.

There should be regular auditing so that the accounts of the organization can be examined and the auditor will determine how the resources were used. This is one way in which the employees will be discouraged from engaging in unethical practices (Richter 2001). Through auditing, each employee will be held responsible for any misconduct and harsh punishment imposed on the culprit. In this way, the employees will learn to be responsible for their actions hence they abandon the unethical behaviors.

Finally, the employees should be sensitized on the importance of upholding the moral standards. The manager of Best Buy should make sure that the employees understand that they can contribute to the success of the organization by avoiding corrupt deals (Zinbarg 2001). This is because the reputation of the organization will be good and attract many customers which will then improve the profitability of the organization and they will be compensated well in terms of salaries and rewards. This will encourage the employees to practice ethical practices while performing duties in the organization.


Best Buy Company is the leading company in retailing in consumer electronics. The company has succeeded in creating competitive advantage because of the variety of strategies it applies. In the first place, the company practices customer oriented approach in its operations by ensuring employee participation in decisions making, applying environmental sustainability strategy and the company hires competent and qualified employees. Social responsibility has also helped to improve the employee compensation, better relationship with suppliers, improved value of the shareholders and better quality products and services like product recycling. The benefits the company will receive from investing in recycling of old electronics is that it will be able to preserve the environment, improves the reputation of the organization and also creates good relationship with other companies. Some of the ethical challenges which are facing many organizations in the 21st century include fraud, lack of accountability, safety and health of employees and lack of fairness. In order to create and maintain ethical standards in the organization, the employees should be trained on ethics and setting effective organization policies.


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