By Daniel Korschun
The battle at Market Basket continues to draw international attention. The dispute pits 25,000 supermarket employees against much of the Board of Directors and its newly appointed co-CEO’s. The employees want their former CEO, Arthur T. Demoulas back at the helm. The Board appears to be looking to sell the company.
Employees have taken to the tactics of civil disobedience, some refusing to work, others picketing, still others asking customers to shop elsewhere. Meanwhile, the CEO’s have a new tactic geared towards short-circuiting the protests momentum. They are holding job fairs to replace striking associates.
While the new CEO’s have taken an aggressive tact, this move stays close to the standard playbook for breaking up strikes. To be clear, the new CEO’s probably have a legal right to replace some associates, and there is an available pool of potential employees who could stand-in for much of the work that needs to be done. The fact that Market Basket is known for treating workers well, with healthy bonuses and profit sharing is also likely to attract interest from a wide swath of retail employees in the region. They may very well receive many applications.
However, this tactic is likely to fail for two reasons. First, the number of associates that would need to be replaced is far too large to be feasible. I observed a rally this morning where more than 5,000 associates (about 20 percent of the workforce) drove, biked, and bused-in from multiple states. The protest involves all levels: frontline workers, store managers, office personnel, truck drivers, former executives. Thus, even if the CEO’s have a legal right to replace some workers, the knowledge that is held by these 25,000 associates is simply too immense.
Second, the extraordinarily strong culture at Market Basket fuels a cohesiveness and a passion from this group of employees that cannot be replicated simply by bringing in additional workers. The former CEO, encouraged long-term commitment to the company; moreover, he and store managers empowered employees to excel on the job. Such an approach has produced a highly committed, cohesive, and skilled workforce, not to mention a quiet cult following among customers. The result is a workforce that considers Market Basket to be an extension of the family. One employee I spoke with said that Market Basket colleagues and managers were more supportive in a time of need than her biological family. This cannot be replicated overnight by simply replacing bodies.
So what’s next for Market Basket? The new CEO’s may still have the upper hand in some ways, but the associates together with many customers have time and again shown an ability to rewrite the rulebook. While the CEO’s tactic of trying to replace some associates may work at other companies or in other situations, in my view, the unique situation and culture of Market Basket makes such a move unwise.
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.
