Business & Law / Opinion

How the Market Basket Protests are Unprecedented

By Daniel Korschun

Unprecedented. That is how the protests at Market Basket have been described by the media and other scholars. Thousands of employees have been picketing stores, slowing deliveries and participating rallies that have effectively shut down the company’s operations. They say they will continue their protest until Arthur T. Demoulas, their beloved CEO who was fired a month ago, is reinstated.

On the surface, this situation is interesting because employees are fighting to get their CEO back. But beyond the obvious is a more fundamental question of what a company is and who owns it. korschun_d

First a little background. Market Basket is one of the largest and fastest growing in the Northeast. It is privately held. Arthur S. Demoulas (Arthur T.’s cousin – I know, I get confused too!) owns a controlling 50.5 percent stake in the company, which he used to take control of the Board of Directors, oust Arthur T. and install new co-CEO’s, who immediately fired eight of “Artie T.’s” most loyal managers.

But Market Basket employees are fiercely loyal to the company and this is where things become truly unprecedented. You see, in a typical union-sponsored strike, employees see themselves as working against the company and the management. Market Basket employees don’t see themselves as outsiders to the company. They believe that they represent the best interests of the company, and they view the Board of Directors and the co-CEOs as the outsiders. In essence, they believe in the company’s mission to provide low-price foods to low-income families, and are convinced that it is their responsibility to protect the company from “greedy” shareholders, who want to take away that which makes Market Basket distinctive. As attendee at the rally said, “They just want to turn it into another Shaw’s [a competitor]… low-income families rely on Market Basket.”

So as we watch this situation unfold, it is important to view this as more than a bunch of employees who just happen to like their former CEO. Rather, this is a group of employees that doesn’t seem to care that traditional business school textbooks say that the shareholders own the company. Instead, they take the emerging view of many stakeholder theorists, that a company cannot exist without the resources and support of employees, customers, shareholders, the community and others.

This stakeholder view has been floated in academic circles for more than three decades. What makes the Market Basket case so unique is that they are doing it. In what might be described as corporate disobedience, this protest has involved both workers and managers. First, warehouse managers and workers slowed deliveries to a crawl; then store managers encouraged employees to picket outside stores; finally, they have invited customers to join their cause by boycotting Market Basket until Artie T. returns. According to rally organizers, support for their cause extends all the way to the C-Suite (not including the new CEOs of course).

Employees are not afraid to state their agenda. At the rally, I saw many T-shirts and signs with one of the protest’s unofficial rallying: “This is our … company!”

Will they be successful in reinstating Artie T.? Do employees really have a right to tell shareholders who to hire and fire? Scholars and practitioners could very well look back at this case as a turning point in how we think about who really owns a company.

Daniel Korschun, PhD, is an assistant professor of marketing at Drexel University’s LeBow College of Business and a fellow of both the Center for Corporate Reputation Management and the Center for Corporate Governance at LeBow.

One thought on “How the Market Basket Protests are Unprecedented

  1. “stakeholder theorists”. Well, many companies are stuffed with employees who just work paycheck to paycheck. And the CEO does so too. After all, he’s just an employee. It takes inspiration to see the whole company as a joint effort. Like Mahatma Gandhi who inspired two hundred million Indians and did so without any physical means, this CEO must also have had charisma larger than life. He got these employees to “invest” (emotionally) in the company, to “buy in” unlike the typical time-servers. The moment you get this kind of commitment you would find employees to man the barricades in any enterprise. Peters/Waterman showed, albeit largely anecdotal, examples galore in their “In Search of Excellence”. So business schools should take heed and if it were the only thing they taught it would be how to emulate Demoulas in every company worldwide. And if we had such politicians there would be no need for parties.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s