The case of Walgreens and CVS Health is a typical demonstration of what an organizational structure appears like. Various concepts, including but not limited to: a positive attitude towards employees, leaders, and customers outstandingly, depict specific cultural factors throughout the situation. The two companies perfectly recognize the need to have an organizational structure with the aim of meeting their respective goals. CVS's Health primarily values its customers and has prospectively used this to build an innovative and self-oriented team of workers to enhance its growth (Rosenthal, 2012). On the other hand, Walgreens has effective recognition and acknowledgment that workplace diversity is the key to help an organization attain its results (Walgreens, 2019). It is, therefore, imperative that both cases, prioritizes the need for having cultural alignment with goals. Basing the primary argument that the two companies have a greater extent of cultural similarity, this paper attempts to show that CVS Health should acquire Walgreen.
The History and Culture of Walgreens
Walgreen pharmaceutical chain company was founded in the year 1901 by the renowned Charles Walgreen at the South-end of Chicago. Walgreen was also the most initial employer of the company, and at some point, it was utilized as a drug store. By 1925, Walgreen had made significant progress noting that the company had stores above 65 throughout the Unites States (Walgreens Boots Alliance, 2017). Walgreen’s son took over the leadership of the company after the death of his father, and he similarly made reputable advancements. More stores called for the formation of mergers and partnerships with other key companies, as the 20th century gained momentum, and competition became stiffer.
Later in 2019, the company was granted national recognition for being diverse by including persons with disabilities in its structure. Its high Disability equality index asserted this in 2019, a factor that had a significant linkage with the people's culture. Having such a people-oriented culture motivated Walgreens to integrate the less fortunate in its operations as a measure of maximizing the output. Studies by Organizational Behavior (2017) depicts that the vital principle of people-oriented culture is that, workers are considered to be the essential asset in an organization. Therefore, workers are treated with more enthusiasm, respect, and dignity.
Perhaps, the fact that Walgreen's covers a broader market with a great extent of flexibility makes it possible for them to support employee diversity. According to Podsiadlowski et al. (2013), employee diversity is an essential requirement for any business that uses several customers to deliver its company objectives and goals, because it is impossible to evade customer diversity in such conditions. The leadership team of Walgreen uses the same philosophy to create a more diversified workforce, with the belief that it has a higher potential of helping an organization achieve its goals and objectives.
Other than integrating workers of different abilities in its structure, the company has also planted an innovative culture with its employees. Organizational Behavior (2017) outlines that by an organization putting less focus on the ranking positions within the organizational structure, it would mean that employees' views and opinions are valued at any level; this activates the ease of their adaptability and possibilities of engaging in various risk-taking opportunities which might be inventive or innovative. Recently, the company started using a flat-hierarchy culture system, which significantly reduced the instance of workplace divisions, and possibly enhanced customer satisfaction by promoting employee engagement activities (Walgreens Boots Alliance, 2017). In summary, promoting people-oriented and innovative culture in the company has made it easy to empower employees, thus building positive customer relations.
The History and Culture of CVS Health
CVS Health organization began its operations in the year 1963 in Massachusetts. However, its control was taken over by Melville Corporation later in 1969. The first parent company operated majorly in the line of Shoe products (CVS Health Corporation, 2020). Throughout the 20th century, the company, the company engaged in mergers and several acquisitions, which facilitated its growth. It was later that it was named as CVS Health. Similar to Walgreen, Frank Melville established the company and called it Melville Corporation. He acted as the sole employer in the three different shoe stores that he had started. His son Ward Melville inherited the company and operated it for the entire 20th century and his death in 1996.
In the same year, the new-called CVS Health shifted from selling footwear to pharmaceuticals, and it ended up with more than 4100 stores situated in the USA, at present. One of the CEO at CVS Health company attributes that the recent success is directly afflicted with its culture (Rosenthal, 2012). More concern on teamwork building among the customers and employees is also a key to the high reputation of CVS Health (Rosenthal, 2012). Most companies that acknowledge their customers often utilize service, details, and specific person-oriented cultures because their main focus and understanding of success are aligned with the satisfaction of both employees and customers. For instance, detail-oriented learning may be enhanced by an organization through identifying the details of employees and engaging them in employee engagement programs as a way of making them feel valued, possibly by offering them quality services (Organizational behavior, 2017).
Moreover, Rosenthal (2012) depicted that CVS Health significantly used a team-oriented culture by using particular employee relations. Therefore, the company used cultural-based structures in managing employees and customers to ensure that it grows consistently over the years. Their primary belief was that working together would positively trigger it's the organization's development and achievement of goals. Remarkably, the formation of mergers and acquisitions by the company has motivated it to create more stores and eventually gain a large customer base. To summarize, CVS's Health company success is principal as a result of adopting the service, detail, and person-oriented cultures.
CVS Health Should Purchase Walgreens
Notably, the formation of mergers and acquisitions might prove to be unsuccessful for Walgreen and CVS Health companies, especially if they are using different cultures to steer up their success. For this reason, there are possibilities that the companies might adjust to form common culture, but most probably, the best solution would arise if one company purchased another. It is because the two companies have a greater extent of similarities. For example, both mandates their growth prospect to the ideology of customer satisfaction. However, CVS Health uses a simple mechanism to achieve this, compared to Walgreen, which uses an indirect approach by fostering employee diversification to gain customer satisfaction.
Besides, acquisition of Walgreen by CVS Health would be more appropriate since CVS can apply the concepts of diversity in the newly merged business to continue expanding its market and attracting a broader customer base (Podsiadlowski et al. 2013). Since innovative cultures are more likely to succeed in a company that offers more priority for input instead of rank, the creative culture at Walgreen company can effectively get incorporated with a team-oriented culture that is practiced by CVS, to ensure that abilities and potential within a team system are identified and utilized accordingly.
Finally, it is also imperative that Walgreen company inputs much on employees as a strategy for market expansion, whereas CVS considers customers as the key elements for widening their market. For this reason, the two companies can correctly work jointly as Walgreen brings in the notion of innovative strategies, as the parent company which is CVS, stresses on the means of enlarging their market, by using the customer-based culture.
In summary, this discussion provides an overwhelming analysis of two key concepts, namely; organizational performance, and business expansion. The cultures used by Walgreens and CVS supports the need for acquisition, as that would increase the overall productivity. The study has also proved how culture is significant in that it can be used to make critical decisions such as merging or acquisition concerns. The acquisition was made more accessible because the two companies use cultures that visibly complement each other. Walgreen will enjoy a broad market base after the purchase, as the parent company would equally increase its employee satisfaction through diversity.
CVS Health Corporation. (2020). Hoover’s Company Records. Fort Mill: Mergent. https://search-proquest-com.ezproxy.trident.edu/docview/1860751534?pq-origsite=summon
Organizational behavior. (2017). Minneapolis, MN: University of Minnesota Libraries Publishing Edition http://open.lib.umn.edu/organizationalbehavior/
Podsiadlowski, A., Gröschke, D., Kogler, M., Springer, C., & Van Der Zee, K. (2013). Managing a culturally diverse workforce: diversity perspectives in organizations. International Journal of Intercultural Relations, 37(2), 159-175. https://www.sciencedirect.com/science/article/pii/S0147176712001162
Rosenthal, H. (2012, December 1). CVS continues to embrace the culture that got it started. Chain Drug Review, 34(21), 42.
Walgreens Boots Alliance. (2017). A new kind of corporate culture energizes Walgreens. Chain Drug Review, 39(7), 148.
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