The Market Basket Company Analysis - Case Study Example

Author Note

Company Culture

Market Basket is a trade name for a chain of supermarkets, operating in New Hampshire, Massachusetts. Seventy-eight outlets of Market Basket are currently headed by Arthur T. Demoulas, who holds the position of the CEO of the company. This chain of supermarket exhibits a unique organizational culture, which involves respect, trust, and loyalty as its integral force. The company does not follow a bureaucratic organizational structure and emphasizes on the well-being of the employees (Fox, 2014). Furthermore, the senior executives of the company are not recruited from outside the organization. The vacancies of the senior posts are filled with the existing employees of the company. Therefore, Market Basket provides an opportunity to the employees for individual growth, which ensures the loyalty of the employees.

The recruitment criteria of Market Basket is based on the enthusiasm that the human resource department perceives from the personality of the job applicant. The management of the company believes that the skills can be incorporated among the employees with effective training if the candidate is willing to undertake the regime. However, the company witnessed a transformation in the environment of the workplace, as the organizational culture was disregarded by the senior executives of this chain of supermarket. This resulted in the change of CEO of Market Basket, who assured the stakeholders that the employees will not be fired to cover the debts of it. The views of the new CEO of the company are in line with the prevalent organizational culture, which suggests that the employees are not the burden of the company, instead are the assets of Market Basket.

Ethics and Morals

Arthur T. Demoulas, who is the CEO of Market Basket, believed the employees to be the assets of the company. The CEO believed that the company is established to serve the individuals of the community. The head of the company visited the warehouses, interacted with the employees, as well as addressed their issues. The well-being and comfort of the employees were personally supervised by the CEO of Market Basket.

The uniqueness of the ethics of Market Basket pertaining to the employees lies in the importance that the senior executives place on the employees and not on the stakeholders of the company. The corporate enterprise seeks the permission of the stakeholders while implementing decisions, involving the strategies of the firm, as they bear the risks. However, Market Basket has valued the employees as well as the preferences of the consumers in order to achieve its objective to serve and uplift the community.

Individual Differences

The chain of supermarket, Market Basket, witnessed two leaders, who are cousins, as their CEO. The chain of supermarket was headed by Arthur T. Demoulas, who upheld the legacy of the company of empowering the employees. The conflict among the two cousins resulted in Arthur S. Demoulas being appointed as the new CEO of Market Basket. Arthur S. Demoulas held the majority of shares of the company and hence crowned himself with the most celebrated position at the company. However, the employees were unhappy with the removal of their efficient leader Arthur T. Demoulas. The revolts among the employees led to the resignation of many as well as rallies of protest. Furthermore, the suppliers of the commodities to Market Basket boycotted the company in protest of elimination of the former CEO of the chain of supermarket. The consumers were also deciding against purchasing products from Market Basket to exhibit their non-approval on the decision of the company. The loyalty of the customers towards Market Basket decreased with the news of removal of Arthur T. Demoulas spreading through the media. The consumers also participated in the rallies to support the employees of Market Basket. The falling sales, lack of supply, as well as resignation of valuable employees of the company compelled the new CEO to sale the business. The former CEO of the company, who is also the celebrated leader of the employees, came forth to purchase it. The employees, the suppliers, as well as the loyal customers of the supermarket welcomed him. However, Arthur T. Demoulas had to bear the stock price of $1.4 billion to purchase the company from his cousin.

Emotional Intelligence

The ideology of the CEO of Market Basket, Arthur T. Demoulas, pertaining to the management of the employees of the chain of supermarket involves empowering them. Arthur T. Demoulas knew the employees by their names and also made efforts to establish a cordial relationship with all of them. The senior executives of the supermarket emphasized on providing a comfortable working environment to the employees of the firm. The effective communication among the leader and the employees of Market Basket enabled the CEO to understand the requirements of the employees.

The ability of the individuals to comprehend as well as control the emotion of the others is referred to as emotional intelligence (Goleman, Boyatzis, & McKee, 2013). Arthur T. Demoulas possessed the ability to influence the emotions of the employees, which is reflected by the vehement protests of the employees after the removal of their leader as the CEO of Market Basket. The employees of Market Basket are perceived as the asset of the company by Arthur T. Demoulas, as the services they provide attract the customers to the stores of the chain of supermarket. Therefore, the leader of the company attempts to understand the perceptions of the employees to provide them good working experience at the company.

Employee Motivation

The CEO of Market Basket established an emotional bond with the employees of the company, which motivated them to deliver efficient results in favor of the company. The employees were loyal to the senior executive of Market Basket, as the leader enquired about the well-being of the families of the employees as well as their career goals. This ensured the employees that the company will enable them to achieve their objectives pertaining to their career. The trust that the employees bestowed on the CEO of Market Basket motivated them to remain at the company. Furthermore, the business strategy of the company was to value and serve the individuals instead of enhancing the profit margin of the company. However, the company was able to increase its profitability even though it paid its employees more than the minimum wage. The employees receive remuneration which is above the market wage rate and the senior executives of the company are chosen from the existing employees. Along with these, the supermarkets provide an exceptional working condition. All of the aforementioned factors motivate the employees to exhibit excellent performance at the chain of supermarket.

Managing Conflict and Negotiation

The conflict at Market Basket arose among the cousins, who were the owners of the company. The maximum stocks of the company belonged to Arthur S. Demoulas, whereas the chain of supermarket was run by his cousin Arthur T. Demoulas. The exceptional leadership skills of Arthur T. Demoulas gained the popularity among the employees, suppliers, and also the consumers. The company paid high wages to the employees, although it ensured high profitability of Market Basket. However, Arthur S. Demoulas removed his cousin and transformed the organizational culture of the chain of supermarket (Gittleson, 2014). This enraged the employees of the company, who protested against the step of the management. The suppliers of the supermarket also quit providing materials as a measure to exhibit their dissatisfaction. Moreover, the loyal customers of the also protested the decision of eliminating Arthur T. Demoulas by not buying the commodities from Market Basket. This situation of the chain of supermarket compelled the owner to sell the company. However, the only buyer, who came forth to purchase the company, was Arthur T. Demoulas. The change in the CEO thus settled the issue of the supermarket, as the stakeholders welcomed back the celebrated leader.

Leadership Style

Arthur T. Demoulas viewed the employees as the asset of the company and not merely as expenses. His emotional intelligence enabled him to understand the requirement of the employees, which enabled him to retain the valuable employees as well as gained him the loyalty of them. Arthur T. Demoulas identified that the efficiency of the employees will assist the supermarket to achieve high profits. His sense of ethics is exhibited, when he gives more importance to the individuals of the society and not merely monetary benefits.

Arthur S. Demoulas exhibits the views that are common among the senior executives of the corporate enterprise. The profitability of the company is the sole driving force while strategizing operations, when the company is leaded by Arthur S. Demoulas. Market Basket was known to give higher wage to the employees compared to other supermarkets. However, the new CEO slashed down the salaries of the employees to enhance the profit margin of the chain of supermarket. The bonuses given to the employees as well as the retirement benefits awarded to them were reduced by Arthur S. Demoulas. Besides, the CEO of the company did not establish the similar cordial relationship with the employees that his cousin did. His leadership style was driven by monetary benefits while Arthur T. Demoulas emphasized on the well-being of the individuals.

Implications of the case of Market Basket

The case of Market Basket demonstrated that the employees have the capability to transform the decisions of the corporate enterprises. The power of mass boycott on the private organizations is established by the case of the chain of supermarket. The influence that Arthur T. Demoulas imposes on the employees, vendors, as well as the buyers of the company is exhibited, when they compelled the new CEO of the company protest against the removal of the popular leader of Market Basket. Therefore, it can be deduced from the instance that establishing a cordial relationship with the employees and interacting with them can enhance the profit of the company. The loyalty of the valuable employees is achieved by establishing such relationship with the employees. Furthermore, the ability of the popular leader Arthur T. Demoulas to achieve the increase in profit of the company while paying high wages to the employees must be cited as an example to the other corporate enterprise of the United States. The management of the company must recognize that motivational leadership and empowerment of the employees enable the companies to motivate as well as retain the valuable employees (Rosenfeldt, 2014). This style of motivational leadership enables the company to ensure high profit as well as the loyalty of the customers.

Recovery of Market Basket

The battle among the two cousins Arthur T. Demoulas and Arthur S. Demoulas resulted in the former CEO coming out as the winner with the immense support from the employees, suppliers, as well as the customers of Market Basket. However, the purchase of the family business costed Arthur T. Demoulas billions. The popular leader will have to undertake measures to rectify the damage that has been done by the previous management team working under Arthur S. Demoulas. The purchase of the chain of supermarket also altered the stakeholders of the company (Kasperkevic, 2014). Arthur T. Demoulas will have to undertake business with a board of directors, who do not belong to the family of Demoulas. The financial setback that market Basket witnessed must be rectified by the CEO to reconstruct its financial stability. Furthermore, Arthur T. Demoulas has to reestablish its cordial relationship with the vendors and suppliers of the company. The valuable employees of Market Basket, who resigned while being in the regime of Arthur S. Demoulas, must be brought back to the company. Therefore, Market Basket requires time to gain its former position in the market.