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Non Profit News For Nonprofit Organizations Nonprofit Quarterly https: Demoulas was ousted as the result of a family feud. One might have expected the story to end there; but under Demoulas, Market Basket had paid its workers a fair salary and provided good product at low prices—and apparently its stakeholders had a sense of a shared future together: The ousted CEO was reinstated, as were eight supervisors who had been fired for orchestrating the revolt and the thousands of employees who had taken part in it.

Tom Kochan, c odirector of the MIT Sloan Institute for Work and Employment Research at the MIT Sloan School of Management, believes that Market Basket is something of an indicator of things to come, as he explains in the following interview with the Nonprofit Quarterly. Tom, we have talked previously about the larger implications of the stakeholder action around Market Basket and the potential impact of it.

Can you talk about why you find it so notable in your tracking of business trends? Well, it really is an unprecedented dispute involving the full workforce of a business, that is, executives, store managers, clerks, warehouse workers—the full cross section—against the firing of their CEO and disruption of the business model that made the business so successful, built a loyal customer base over the years, and provided good jobs.

And the customers have also gotten involved in this. Have you ever seen a situation where you see the workforce and customers so united in this kind of action?

It is quite unusual to have this broad base of loyal customers standing side by side with the workforce. They are absorbing higher costs by having to shop at more expensive stores. Yet they, too, value the long history of quality service and low prices that Market Basket is known for. They got to know them as individuals, and they cared about them, and they related to the issue, too—because the UPS drivers were striking in part to preserve their pensions but also to gain job security, more options for full-time work, and fair salaries during a time in which American workers nationwide were struggling.

In the past there had been more of a sense that the job of management was to balance the interests of multiple stakeholders—owners, to be sure, but also employees, and customers, and suppliers, and maybe even the communities in which the business was located.

That shifted in the s with leverage buyouts and hostile takeovers and everything that followed in the wake of that movement. Since then too many academics and business leaders bought into the notion that the corporation was solely an instrument for maximizing shareholder value.

That, I think, is being challenged directly in the case of Market Basket, and I think the fact that it resonated so well with the public—with workers around the country—demonstrates that the protesters have struck a chord and that other people are equally fed up with the inequality in society and attribute some of that to the greed of business owners or shareholders. Clearly this is an idiosyncratic set of circumstances that led to the protest by employees, but it symbolizes this larger concern in society and has garnered widespread support from the public, from the community members, and from the vendors, who are suffering from the loss of business, as well as from the politicians, who intuit what this really might symbolize.

So I think it does reflect a deeper concern and maybe even unrest in American society. Again, this is a very unusual set of circumstances.

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You have previously mentioned seeing somewhat similar situations in China. Can you describe these? But as more private enterprise grows in China, Chinese workers are getting fed up with their low wages and poor working conditions, and the situation has led to a large number of spontaneous protests.

So I think in that respect there are some similarities. Is the technological environment feeding some of that spontaneity between stakeholder groups? The development of social media has certainly helped, as have the ability to communicate and the transparency that I think workers now see in organizations.

When they saw Market Basket shift their CEO from Arthur T. Demoulas to co-CEOs brought in by the rival faction in the company, and saw the family seeking to get more cash out of the company, they understood that the business model was going to change, the quality of their jobs might suffer in the future, the business was likely to be sold to some outside buyer—and all that they had worked to help achieve was at risk.

If one were to say we might be looking at a possible era shift here, what would it be? Are we being fair to the workforce? Are we teaching enough about that? But I do think it will lead to more coalitions between workers and customers and community members using social media and using an issue that the broad coalition can relate to and see as compatible with their own sense of fairness. The Metropolitan Opera was negotiating with fifteen or sixteen different unions, and there was a lockout threat, among other issues.

But in the final agreement, which has not yet been ratified between the major unions and the Met, one of the clauses requires that there be an independent financial monitor and that both sides get financial information to work with.

So what the Met and the unions are doing is, I think, unique.

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People are smart about business. If the cash situation of the company is difficult and borrowing is limited by the cost of the transition then employees may have to make sacrifices to keep the company going.

If this becomes the case it will be enlightening to see how management and employees work it out.

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Stakeholders, Shareholders, and the Meaning of Market Basket: An Interview with Tom Kochan By The Editors August 2, Share Tweet Email Print Share on LinkedIn More More on Executive Transition Subscribe to Executive Transition.

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