Best Buy: Discontinuing ‘Results Only Work Environment’

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Background Note Best Buy’s roots date back to 1966, when Richard Schultz (Schultz) and his partner opened an audio specialty store called ‘Sound of Music’ in St. Paul, Minnesota, USA. Business grew and the partners opened two new stores near the University of Minnesota in 1967. In 1969, the company also came up with its first employee stock option plan with an eye on luring more talented employees into its fold. The next year, the company breached the one million dollar sales mark for the first time. Over the next decade, Sound of Music grew rapidly and improved its offerings by including the latest video and laser disc equipment in its product lineup (it was also the first retailer in the US to sell video equipment).

In 1983, Sound of Music’s board of directors approved a proposal to change the company’s name to Best Buy. The company’s first superstore under the ‘Best Buy’ name opened in Burnsville in Minnesota. The superstore was much larger than most electronics stores and featured an expanded product and service range including a wide assortment of discounted brand-name goods, central service, and warehouse distribution. The store also started selling consumer appliances. ....

Best Buy was listed on the New York Stock Exchange in 1987. In 1989, the company implemented a new policy where it stopped paying commissions to its sales staff, shifting them instead to a salary. This did not go down well with either the sales staff or electronics and appliance companies like Toshiba Corporation and Hitachi Ltd., who depended on the sales staff to push their premium-priced products. However, customers reportedly liked the ‘no-pressure’ atmosphere at the stores which resulted from the sales staff being less pushy.... ...

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