Reference no: EM132866331

Jay Jazzman's company, Natural Foods Inc., owns 5 organic food stores in Ontario. The company is based on family values of trust, integrity, and corporate responsibility and has made a commitment to having all its stores be as eco-friendly as possible. Jay and the Jazzman family donate 2% of the company's annual profits to local community projects that promote environmental sustainability.

Many of the employees of Natural Foods have worked there for years and are devoted to company values. Most of them know Jay personally, having worked with him along the years. Employees knew Jay cared about each and every one of them, about their lives and families and that he often stepped up to support them at their time of need. Employees at the company received above average pay compared to the industry, had extended health benefits, and actively participated in the company's decision-making process. In return, employees were expected to provide first rate customer service, provide advice on healthy lifestyles, and promote healthy products.

Jay has decided to retire in January of this year and to pass along the reigns of the family business to his daughter Aria as the new CEO. Aria, who recently returned to Ontario after spending several years working in Europe, is an MBA graduate with over 15 years of experience in the industry. When she took over as CEO, Aria discovered that Natural Foods Inc. was now facing a major financial crisis. Competition from online grocery stores offering organic and natural products at lower prices was seriously cutting into the company's sales and profits. Work at Natural Foods has become more tense as employees became concerned that the company will go bankrupt. Employees cared about the company, but it seemed that Aria was not interested to hear from them about any solutions. Aria realized that it was necessary to make changes to the company's pay structure and the way the company works. It was clear that a new business model was required for Natural Foods Inc. Aria felt that there was too much to do to keep the family business afloat.
After four weeks on the job, Aria decided it is time to inform employees about the changes. On February 1st, Aria sent out an email to all company employees outlining the changes that will be implemented at Natural Foods Inc. effective immediately:

(1) a 10% pay cut for all employees and managers; (2) a freeze on all promotions and new hiring; (3) suspension of all support to local community projects; (4) suspension of all local and regional store meetings; (4) strict operating guidelines will be provided from Aria to stores - detailed weekly reports of compliance from store managers are now expected. Aria further stated in her email that everyone is expected to comply with the new changes at Natural Foods Inc.

Discuss the change in Natural Foods Inc. in terms of its effect on trust and organizational justice.