retailing) was $380. This is roughly twice the industry average of $194.^4
Bloomingdale’s, Saks Fifth Avenue and Macy’s rank near the retail norm.
Given Nordstrom’s size and prominence, clothing and apparel manu-
facturers compete to position their products in Nordstrom stores. Says one:
‘Their ethic of putting the customer first is infectious. They expect us to
treat them as they treat the customer. It leads to remarkable feats on our
part – like hand-manufacturing a pair of shoes in a size we don’t produce
for a customer with very small feet. It cost us $600 to do this once last year.
We sold them to Nordstrom at our normalwholesale price. I think many
vendors find themselves being more lenient in accepting returns from
Nordstrom because of the store’s lenient return policy with its customers.
In numerous ways, Nordstrom gets better service from its suppliers than
most other retailers in the industry.’^5
By the end of 1990, Nordstrom was the top-ranked department store in
The recruitment and internal market domains 381
Maybe more information isn’t always better.
Two new economic studies provide fresh evidence that, contrary to expecta-
tions, computers don’t increase productivity – at least partly because the added data
delivered to workers don’t lead to better decisions.
Catherine Morrison and Ernst Berndt, economists at Tufts University and the
Massachusetts Institute of Technology, respectively, studied the performance of 20
US industries from 1968 to 1986. They found computerization tended to reduce
productivity growth and, as an investment, was less efficient than other capital
spending.
Gary Loveman, an economics professor at Harvard Business School, saw a
similar pattern when examining the operations, from 1978 to 1984, of 70 large man-
ufacturers based in Western Europe and the US.
The studies lend credence to fears that organizations often incur a heavy burden
when adjusting to new computer equipment.They come at a time when many cor-
porate customers are complaining that computer makers don’t pay enough atten-
tion to the issue of worker productivity.
Mr Loveman faults computer buyers for having too much faith in the value of
information. Employees compound the problem, he says, by larding pedestrian
memos with facts gleaned from costly computer searches and spending hours
playing with spreadsheet graphics or preening word-processing documents. “We
don’t have a good way to make decisions about how much [information] is enough,”
he says,“so people devote too much time to further analysis.”
Computers also have a limited impact on the productivity of service companies,
Mr Berndt says, because their benefits in service fields often are qualitative rather
than quantitative.
Moreover, computers seldom confer a competitive advantage because rivals
“end up doing the same thing,” Mr Loveman says. “So computers simply raise the
ante for playing in a market.”Figure 5.3.2 Computer data overload limits productivity gains