Glenn isn’t convinced that Dina can raise a newborn child, noting that she probably doesn’t even know how to swaddle a child. Dina thinks it’s similar to her experience at Chipotle. Her argument is that the human capital she accumulated rolling burritos would be general and transferable to taking care of a child.
A customer is having trouble identifying a new toothbrush to help with his tartar problem. With all the options available, some companies advertise as being good at fighting plaque while others focus on tartar prevention. When consumers have a lot of options, it’s sometimes hard to fully consider the tradeoffs. This paradox of choice can explain why some people don’t behave rationally when presented with a seemingly overwhelming number of options.
Cloud 9 has developed their own brand of salsa called Señor Cloud Salsa. In an attempt to seem more authentic, the store manager is looking for employees to offer samples to customers. Glenn believes this will be a key selling point that differentiates their store brand from more recognizable substitutes in the store. Successful product differentiation gives firms some market power and the ability to charge a price greater than marginal cost.
One way firms respond to increased union efforts is through managerial opposition. Because it’s illegal to fire workers who try to unionize, firms may use alternative tactics to discourage the formation of a union. An employee has been talking about forming a union and the district manager lets Amy know that the corporate office is considering shutting down stores, and a unionized workforce would make it more likely their store could be shut down. Amy, Dina, and Jonah meet in a backroom to discuss ways to stop the unionization from proceeding.
A lot of the employees walked out while on their shift in the hopes of getting Glenn his job back. The regional manager has arrived and is working with Jonah and Amy to see how they can get the employees back to work. Initially, Amy and Jonah ask only for Glenn to have is job back, but they must sign a letter saying that they apologize for walking out. While it seems like a small request, they decide that the employees really deserve more. Part of the goal of unionization is to turn a competitive labor market into a monopoly provider of labor. Through collective bargaining, Amy and Jonah demand more for their group.
The lights are off in the store, but Dina and Glenn are searching for the manual override code to get power back online. While searching, Glenn goes through a series of older memos from the corporate office about how to keep union activity minimized. While stores cannot legally stop employees from unionizing, they have an incentive to keep unionization efforts at a minimum to keep labor costs low. The managerial opposition hypothesis is one explanation for low unionization in the US and primarily focuses on firms taking a proactive role in discouraging unionization.
Each year employees participate in Color Wars, where the employees are divided between two teams to see which team can sell the most during the day. Glenn announces that the winning team will receive a pizza party. While the employees aren’t overly happy about either the Color Wars or the pizza party, incentives can usually be a way to induce higher levels of productivity. It turns out that each team member also receives $100, but Glenn was saving it as a surprise incentive. Amy has to explain to him that incentives need to be announced at the beginning in order for them to actually work.
After being assigned to wrap gifts for customers, we learn that Garrett doesn’t actually no how to this. He tries to hide this by making an economic argument that wrapping gifts is inefficient since it just wastes time in the transaction process.
Corporate has created new devices for customers to use that will allow them to look up where items are located in the store, scan the items, and pay for their total. The employees quickly point out that the device essentially replaces the workers and they are left wondering what that means for them. Dina tries to point out the relationship between ATMs and bank tellers, although she doesn’t have it exactly right.
At the end of the clip, Amy points out that corporate has also asked the stores to cut back employee hours, which implies that the new machines are replacing some of the labor in the store.
After Amy and Jonah contact the corporate office to secure paid maternity leave for Cheyenne, the main office sends a union buster to the store to try and talk the employees out of forming a union. These union busters are paid to help dispel the idea that unions can benefit workers. Firms are often willing to spend money (which reduces profits) so they can avoid paying higher wages (which also would reduce profit).
Teaching with Superstore