The Interview with O'reilly in Magnolia

O’Reilly

O’Reilly started as a part store in Missouri in 1957. Their first year’s sales were $700,000. The first branch store opened in 1964 in Missouri. The first distribution center opened in 1975. In 1978, O’Reilly became a duel-market strategy. They started doing sales in the professional business and in the retail market. In 1993 O’Reilly became a publicly traded corporation. They had 2,333,332 shares at $17.50 per share. Now they are in 47 states and have 5,021 stores total. I chose to interview the manager at the O’Reilly in Magnolia, AR which was opened in 2001 (The O’Reilly story).

Rachel is a manager at the O’Reilly store in Magnolia, AR. Her duties at O’Reilly consists of looking up parts for customers, customer service, diffusing hostile situations, cash handling, inventory control, scheduling, and stocking the shelf. The training she received to become a manager included a few corporate training sessions but was mostly done on the computer as training and skills tests. She oversees the local plant in Magnolia, AR. She also must communicate with other stores in her district (R. Jones, personal communication, March 26, 2018).

Some changes that Rachel would like to see happen at O’Reilly is the expectations of the managers. Some managers have buddied up to the managers above them and are not expected to do their job and work as hard as some of the other managers. Her favorite aspect of the job is the pay bonuses and the customers (R. Jones, personal communication, March 26, 2018).

The most significant event that happened since Rachel working at O’Reilly is a change in store manager at the Magnolia store. When this happened, the store employees were not happy that there was a store manager from Shreveport rather than one of the current employees getting promoted to store manager. The effects of this were that the store employees were not as responsive to make a sell because they thought it would look bad on the store manager. After this, the district manager came to Magnolia and had a meeting with all the employees to see why the sales were suffering since the new store manager had started. If there was a problem with the way the employees were being managed, the district manager wanted to make sure to address it up front with the store manager rather than just letting the problems keep happening (R. Jones, personal communication, March 26, 2018).

O’Reilly Auto Parts is a chain of stores that has a corporate office, hub stores, and local stores. Each local store reports to a hub store which then reports to the corporate office. The main office has many different departments. Some of these departments include credit, collections, customer service, human resources, and payroll. At the local store, there is a regional manager, a district manager, store managers, and assistant managers. The regional manager and district manager oversees each store in the region and district and must visit them ever so often. The company is broken down into several regions and districts. This is done to accurately maintain store standards in all the stores. The strength of this break down is that the regional and district managers get to build a personal relationship with each store and team member. The weakness of the store being broken down in this way is that each store in a district is expected to perform productivity and reach goals in the same capacity. This is expected even if the store is smaller than another store in the district. An example of this is that Magnolia, AR must reach the same sells amount as Shreveport, LA. Shreveport is a much bigger area than Magnolia but they still shouldhave the same amount of productivity (R. Jones, personal communication, March 26, 2018).

O’Reilly’s mission statement is “O’Reilly Automotive intends to be the dominant supplier of auto parts in our market areas by offering our retail customers, professional installers, and jobbers the best combination of price and quality provided with the highest possible service level. To accomplish this mission, O’Reilly will provide a benefit and compensation plan that will attract and keep the kind of people that will enable the company to reach its goals of growth and success”(Company Overview). This mission statement is kind of generic and can be used for several companies. It is an important mission statement though because it tells of how they will treat their employees. O’Reilly does not have a code of ethics or a statement of values. O’Reilly has a fairly unified culture and can be best described as a hierarchy. The communication that happens within O’Reilly is weekly team letters and e-mails. These tell about the store's progress throughout the week before. The managers then tell the employees about the information that was given to them. This is expected of all the managers so that the employees will all be on the same page. I think that O’Reilly is a market-driven company. One of its biggest competitors is AutoZone. O’Reilly is an auto part store so it is a primarily male role. Because of this, many females in the job are insulted by the customers because they typically only want to be helped by the male employees. Each store must find the best way to deal with this. In Magnolia, the female employees normally stand up for themselves and tell them that they can help them just as good as a male employee can. The company relies on rules to keep all unethical behaviors away from the company. The most common ethical problem is theft. This can happen internally but most of the theft happens from customers. To prevent these occurrences, every employee must do a mandatory background check before they can get hired. To make sure that employees are not stealing time from the company, the computers are monitored and restricted from several websites such as Facebook. Internal whistleblowing is encouraged and can be done through an anonymous tip line. This tip line goes straight to corporate to report anything that is unethical. The unethical behavior will then be investigated further. Charitable activities are very important to get O’Reilly’s name out in the community. It shows people that they care about individuals and the things going on in the community rather than just caring about making money. Just this month, the O’Reilly in Magnolia has donated to the boy’s club, Southern Arkansas University, and a few of the local festivals that are coming up (R. Jones, personal communication, March 26, 2018).

O’Reilly has a problem with getting their employees motivated because the pay is low and because the employees watch their leaders. Sometimes, the leaders are lazy and do not have a good work ethic. The company addresses this behavior by sending managers to corporate meetings and offering coaching. O’Reilly employees have good fringe benefits plus several opportunities to receive bonuses. They also receive a commission for all sales that they make (R. Jones, personal communication, March 26, 2018).

AutoZone

AutoZone first opened in 1979 in Arkansas. It was originally named Auto Shack. The sales for the first day they were opened was $300. In 1996, AutoZone started its commercial program which offers credit and delivery to professional technicians. Some of the stores in Magnolia that can use this service include Spitler’s and Bridges. In 1998, AutoZone expanded to outside of the United States borders into Mexico. Since this has happened, AutoZone has become a much bigger company. It now has over 65,000 employees. Because of all the growth, AutoZone needed more than just a CEO and store manager. They now have a CEO, chairman, regional manager, district manager, store manager, and assistant manager. I chose to interview the store manager at the AutoZone store in Magnolia, AR.

April is the store manager at AutoZone in Magnolia, AR. She has worked for AutoZone for 12 years. Her duties include opening and closing the store, managing employees, accounts payable, inventory management, and customer service. There was some training that she needed before she became store manager but since she moved from being an employee to store manager, she did not require as much training as some others may have to have. April had to have extensive knowledge of parts. She also had to have some manager training classes and take some quizzes on their store system. Most of the managers are promoted from within so they are sure that they already have parts knowledge. April is only in charge of the Magnolia, AR AutoZone (A. Colvin, personal communication, April 2, 2018).

April likes AutoZone’s culture because as one they strive to help customers fix their problems. The only thing that she would change is the ability to being able to hire more employees during busy seasons such as tax time (A. Colvin, personal communication, April 2, 2018).

The biggest change that has happened since she has worked at AutoZone is theft. There was an incident before she became store manager where an employee was stealing parts to sell them at a discounted rate. The employee went a long time before being caught but when he was caught, he was investigated and then arrested. After this incident, they had to start taking inventory more frequently (A. Colvin, personal communication, April 2, 2018).

AutoZone has a corporate office and local stores. The corporate office is in Memphis, Tennessee. The main office has payroll, benefits, store support, customer service, commercial, accounts payable, technical support, and several other offices.At the local stores, there are DCs which delivers freight to the store and returns all the recall, cores, and damaged products. Local stores have do-it-yourself and professional installer departments. Management includes regional, district, store assistant managers and commercial manager. However, the AutoZone in Magnolia, AR does not have assistant manager. Since there is not an assistant manager, the commercial manager is the second in charge. It is broken down this way so that customers get the small home store kind of feel when they visit the stores. The strength of the store is broken down is that the customers get to build personal relationships with the employees since most of the customers are returning customers. The weakness is that the district and regional manager does not get to meet with some of the commercial customers. Another weakness is that the higher managers don’t communicate with the employees so they don’t always get the whole message (A. Colvin, personal communication, April 2, 2018).

AutoZone does not have a mission statement. It has a pledge that all employees must know. “AutoZoners always put customers first! We know our parts and products. Our stores look great! We’ve got the best merchandise at the right price” (Our Pledge and Values). This is unique in that the company has chosen not to label it a mission statement. It includes statements that are specific to the industry but it is not specific to the company. The pledge is very important because it seems to be powerful. AutoZone does have a statement of values. “An AutoZoner always puts customers first, cares about people, strives for exceptional performance, energizes others, embraces diversity, helps teams succeed” (Our Pledge and Values). This is very important and really tells team members and customers that AutoZone cares about their image. AutoZone has a very unified culture. It has a very market-driven culture. It preserves the culture and values by including them in the training and posting them in every store for the employees to see. Hiring the right person and putting them in the right position is very important for the company culture. Training starts the first day of hire and employees start learning the culture of the company then. Rules and procedures are important to the company’s culture. I would also describe the company as a market-driven culture. AutoZone is a very diverse company. It does have programs in place to keep the company diverse. Globalization is something that members in the corporate office deals with so the members of the local stores do not know much about it. The biggest ethical problem that the AutoZone in Magnolia, Arkansas has is theft. The company relies more on rules and procedures to cut down on unethical behavior. The company is known to promote trustworthy people. The company runs background checks on all employees during the hiring process. They also monitor everyone’s sales and daily activities. Charitable events are important to AutoZone. The local AutoZone donates most of the times they are asked for a donation (A. Colvin, personal communication, April 2, 2018).

The biggest motivational problem for the employees at AutoZone is that there is a large workload and they have low salaries. Employees are rewarded by being promoted and with raises. Full-time employees receive vacation time and benefits (A. Colvin, personal communication, April 2, 2018).

Comparison

The companies are alike in the background in that, both have always been an auto parts store and they both have do-it-yourself parts or retail markets and professional markets. Both stores also have the capabilities of delivering parts to their professional markets. The biggest difference I see in the two organizations is that AutoZone has stores internationally while O’Reilly only has stores in 47 states. This could be because O’Reilly does not think they are ready to be moved into the international market. I think that the history for both companies is typical for the auto part industry (Our History and Timeline).

AutoZone and O’Reilly are the same in the structure of the organization. They each have regional, district, store managers, and assistant managers. The biggest difference I see in organizational culture between O’Reilly and AutoZone is the communication with team members. O’Reilly has a lot of communication within the company but AutoZone uses a chain of command. This sometimes causes the message to get changed from person to person based on how they interpreted it. The main reason for this difference could be because the regional and district managers may feel like they are above the other employees and don’t have to talk to them. This means that any messages are then told to the store manager who may misinterpret the message or forget to tell the employee altogether. I think that the organizational structure for AutoZone is unique and that the organizational structure for O’Reilly is typical for auto parts stores.

The companies are the same in their culture and values through their mission statement or pledge. Both companies show that they are motivated by their customers and employees. Another similarity is the biggest ethical issue for both companies is theft. The biggest difference I see between the two companies is the diversity issues. While both companies are diverse, there seem to be more diversity issues from O’Reilly then there are at AutoZone. I think that the diversity problem can be typical in the auto parts industry because the woman being in this industry is still a new concept for most people.

AutoZone and O’Reilly are the same in its policies and procedures in the way they promote from within. The difference is in the way they monitor their employees. AutoZone monitors their employees by looking at their sales but O’Reilly monitors their employees by preventing them from accessing certain websites on store computers. I think that since theft seems to be such a big issue within both companies, both AutoZone and O’Reilly should have cameras installed in each of their stores. AutoZone has sensors at the front door so if a customer tries to steal anything, the alarms go off. The only way to find out if an employee is stealing something is through the inventory checks. At O’Reilly, there are no sensors or cameras. If a customer steals something it is the responsibility of the store employees to catch them. If an employee is stealing from the company, it is not noticed until inventory which only happens once a year.