The Week In Ethics Blog

How Market Basket’s Board Misread Employee Engagement

How Market Basket’s Board Misread Employee Engagement

Posted On: Saturday, July 26, 2014

In a battle of cousin against cousin, how important is the culture of a family owned business?  Thousands of voices among the 25,000 employees and the customers who shop at the 71 New England locations of Market Basket (a supermarket chain with $4 billion in annual sales) have made clear in their rallies and online petitions that culture does trump everything.

They are demanding the reinstatement of former CEO Arthur T. Demoulas ousted last month by his cousin Arthur S. Demoulas and a majority of the board now controlled by him.

It is hard to imagine employees of Goldman Sachs, or most other companies for that matter, taking to the streets and putting their jobs on the line in support of an ousted leader. Or that customers would also stand up to fight for the value they received.
However, employees on a Save Market Basket Facebook page align with customers and vendors saying “Together We are Market Basket.” They took to Facebook to make clear they will refuse to work for anyone beside the ousted Demoulas. While the impact of the protests has huge business implications (reports indicate business was down 70 percent this week), it also demonstrates what employees are willing to risk for jobs they love and a leader who inspired the culture behind it.

As a result of protests this month, store shelves are depleted, deliveries aren’t made, and customers are staying away at the request of employees to put pressure on the board to rehire Arthur T. Demoulas. The drama continues to escalate as the board already hired two co-CEOs to replace him, the new leadership team has fired some employees for their role in the protest, and the ousted CEO made an offer to buy out his cousin and other family members. The board said in a statement July 25, 2014 that it will review Arthur T. Demoulas’ bid and others they receive, but they expect all employees to return to work (promising there will be no retaliation for the protests).

Current and former Massachusetts and New Hampshire state and local elected officials praised the company as a leading corporate citizen with most announcing support for the employees’ position:  The Lowell Sun reported that a statement by a number of officials said in part: “…the leadership of Arthur T. Demoulas is the reason Market Basket has been able to keep prices low while delivering quality products to mainly under served areas. The current actions of the board and officers is one motivated by greed and will only serve to destroy the legacy the Demoulas family has worked generations to establish.”

The “good guy” stories that employees have shared about the former CEO reaffirm what they say it felt like to work for a company where they felt respected — paid more than industry average — and part of a culture where they were seen, heard and cared about. Employees give Arthur T. Demoulas high marks for walking the talk about what it means to be a family business.

Interviewed at rallies, employees gave examples of things Arthur T. Demoulas had said or done that mattered: he remembered employee names, knew who had a child or spouse with a health crisis and would seek that employee out in store visits to see how things were going and then remember the conversation the next time.

Customer and employee loyalty is in short supply in most businesses, especially where relationships are simply transactional. When a leader makes it more than that, he or she can inspire trust, allegiance and transform how those who work and shop there experience a business. It can feel like community.

Market Basket under Arthur T. Demoulas apparently demonstrated it was a business that had soul.
In a tug of war of competing visions, Market Basket’s new board majority misread how compelling soul was to employees and customers. Or without it just what it is they will have to sell.

Gael O'Brien

Gael O’Brien is a catalyst for leaders leading with purpose and impact through clarity, presence and connection so that they create engagement that transforms their companies’ future. She is an executive coach, culture coach, speech coach and presenter. She publishes The Week in Ethics and is a Business Ethics Magazine columnist, a Kallman Executive Fellow, Hoffman Center for Business Ethics at Bentley University and a Senior Fellow Social Innovation, the Lewis Institute at Babson College.

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Gael O'BrienWenxin LinKathy MWordpress Blogs - Wordpress Blogs .NETSylvia J. Heath Recent comment authors
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Sylvia J. Heath
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I wish customers would take this same concern for Market Basket and protest the greed being exhibited by food chains across the USA. Unfortunately our free market system is out of control. Competition no longer exists. Without naming names, if you examine our food chains in the USA you will find one or two major corporations running the show. The greed these corporations are showing is impacting the average American’s ability to place food on the table. Just because you can squeeze American citizens for their last cents so that you can increase your billion dollar coffers doesn’t make it… Read more »

Sylvia J. Heath
Guest

It was a misnomer that I didn’t expand on the above example of an online item ranging from $10.00 to $108.00. At least, in that example I had a choice of which to buy. (By the way, this was the
exact same brand name item across the price range). Without Market Basket operating in my area, as it has, with civil and moral discipline, I do not have the same choice with the food I buy.
Thank you for posting my concerns.
Sylvia J. Heath
(same post with spelling correction of “by” to “buy”

Sylvia J. Heath
Guest

I wish customers would take this same concern for Market Basket and protest the greed being exhibited by food chains across the USA. Unfortunately our free market system is out of control. Competition no longer exists. Without naming names, if you examine our food chains in the USA you will find one or two major corporations running the show. The greed these corporations are showing is impacting the average American’s ability to place food on the table. Just because you can squeeze American citizens for their last cents so that you can increase your billion dollar coffers doesn’t make it… Read more »

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[…] The Week In Ethics: How Market Basket’s Board Misread Employee Engagement July 26th, 2014 — “In a battle of cousin against cousin, how important is the culture of a family owned business? Thousands of voices among the 25,000 employees and the customers who shop at the 71 New England locations of Market Basket (a supermarket chain with $4 billion in annual sales) have made clear in their rallies and online […]” 2 Comments […]

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[…] The Week In Ethics: How Market Basket’s Board Misread Employee Engagement July 26th, 2014 — “In a battle of cousin against cousin, how important is the culture of a family owned business? Thousands of voices among the 25,000 employees and the customers who shop at the 71 New England locations of Market Basket (a supermarket chain with $4 billion in annual sales) have made clear in their rallies and online […]” 2 Comments […]

Kathy M
Guest
Kathy M

Arthur T’s side of the family was found guilty of defrauding Arthur S’s side of the family since the 70s when Arthur S’s father died. It was discovered something funky was happening in the late 80s by the Mass Revenue Service because false tax reports were being filed in the name of Arthur S’s older brother by Arthur T and his father slowly moving stocks and funds to themselves. This opened a whole fiasco that went on for over a decade, involved the Arthur T’s side and their Demoula’s lawyers committing all kinds of crimes up to and including trying… Read more »

Wenxin Lin
Guest
Wenxin Lin

I completely agree that Market Basket under Arthur T. Demoulas’ leadership was a business that had soul. The ousted CEO Arthur T. Demoulas depicted a leader who has strong character and have a moral imperative to successfully build integrity in the workplace. What he demonstrated is what business needs. Business world is full of transactions. Both employees and employers would like to take advantage of the other side to seek their own benefits. It is so difficult to combine all the employees and employers into a community because of huge difference in individuals, like different thoughts and goals. Yet in… Read more »

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