Running head: MARKET BASKET 1

“We Are Market Basket”

Jesus Bautista

STC

Capstone II
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Organizational Innovative Culture

Market Basket supermarket businesses comprehends the value of its employees and cus-

tomers by building relationships as CEO Arthur T. Demoulas had continued the business suc-

cess. Arthur T. respected his employees and in return the employees loved working for Arthur T.

which is why they maintained their loyalty and respect working for Arthur T. This loyalty would

later serve Arthur T. as family members Arthur S. Demoulas his sisters and his brother’s widow

Rafaele, managed to fire Arthur T. They alleged that Arthur T.’s management practices were

wrong and that Arthur T. had spent too much money of the shareholders accounts including im-

proper business deals with Arthur T’s. wife and in-laws.

Too many businesses go through conflicts daily and most of the time it all has to do with

lack of communication. In regards with the employees and Arthur T’s. communication, this al-

lowed Market Basket supermarket to prosper. An article states, “The role of family business em-

ployees’ communicative experiences within their families may affect perceptions of family satis-

faction and family involvement and work involvement which will elucidate the family business

experience” (Anna and Judy, 2013). Arthur T. and the employees have a good affiliation and any

messages sent back and forth would keep the business flow going daily among the opened chan-

nels between them. Yet, Arthur T. and the shareholders did not quite have the communication

channels opened. In fact, his cousin Arthur S. and the rest of the shareholders never thought of

the employee’s loyalty to Arthur T. which later made a collective action by supporting their boss.

Certainly, one area that Arthur S. and his family do not understand is business relation-

ships. Arthur S. and the shareholders believed that Market Basket was one association kind, but

the alternative was that the employees and consumers were committed to the business value and

customers treated the business as family. An author suggests that, “Relationship marketing can
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be seen as the marketing focused activities that help to develop and sustain loyal and productive

associations with other business organizations” (Morgan and Hunt, 1994). Arthur T. lead suc-

cessfully Market Basket and the employees were afraid of loosing their source. The relationship

that Arthur T. build with the employees by ensuring bonuses and good pay was just one area that

the followers trusted their leader. However, when the shareholders did fire Arthur T. they did not

realize the impact it would to the them, the employees and customers. Arthur S. and its share-

holders did not understand that the supermarket have an obligation to the employees. This impli-

cated the business as the stakeholders started protesting, causing Market Basket debt growth

daily. The disputes grew more as more employees were getting fired which caused an outrage in

news coverages.

Businesses today have the implication of leading the company in the right path. Effective

leaders are able to guide and project a positive influence to its employees. Yes, Arthur T. did

lead his employees correctly, although Arthur T. and the shareholders had an oversight on spend-

ing too much money on capital costs, $20-$40 million bonuses to employees and investing profit

shares to Fannie Mae and Freddie Mae. As leaders of the Market Basket each person has his/her

management responsibilities and they each should have dealt with it as leaders instead of hurting

everyone in business. The author specifies that, “A virtuous leader would consistently act in ac-

cordance with ethical standards because of his/her moral psychology and virtuous dispositions”

(Bauman, 2018). A leader will put his/her egos or pride to the side and by not harming each other

or the employees this emerges as a worthy character. On the abstract interpretation, a righteous

leader behaves justly and vicious leader behave dishonorably.

Notwithstanding sharing benefits and assets, a partnership also shares business losses, as

in debts with which in Market Basket had incurred. Everyone is liable and Arthur T. and the
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shareholders are responsible for the ongoing dispute of money and power and the lack of trust. A

partnership is accountable for the decisions made in connection with business finances and as-

sets. A potential downfall as in the case of Market Basket is that business partners have to be

able to relinquish certain ways of doing business. If this is a problem than trust by verification,

by questioning the actions taken for any concerns. A study states, “some referred to this idea as

guarded trust or healthy skeptism” (Kusari, Hoeffler, & Lacobucci, 2013). For instance, Arthur

S. should have trusted and allowed Arthur T. to make the supermarket decisions and communi-

cated any concerns or issues that might come along. Arthur T. should have not spent the money

of the other members but Arthur S. should have not investigated Arthur T’s. as the claims were

rejected for impropriety. A large group of issues can surface that may cause the business down-

fall while working with a partner, nevertheless it is emphasized to check your partners actions

and safeguard any potential concerns to keep the business growing.

Relationships can sour if conflicts arise and especially when there is a difference of opin-

ion or simply not pulling your weight. A partner should learn to trust, build relationships, and

most importantly communicate. Even though Market Basket did build a relationship with its cus-

tomers, employees and Arthur T. the organizations shareholders executives and leaders need to

build on those positive actions. The whole point of a business is to prevent financial losses and

the loss of any member in the organization. One thing is for certain about the Arthur T’s. busi-

ness model is that, it’s the people, lower prices and having no debt. Market Basket features in

keeping its customers and employees is how they are treated and thankfully their suppliers offer

low prices as they have maintained a great company culture. Eventually, the money will continue

to grow as long as the customers are treated with dignity and respect.
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References

Anna, F. C., & Judy, C. P. (2013). Family business employees’ family communication and work-

place experiences. Journal of Family Business Management, (2), 88

https://doi.org//10.1108/JFBM-05-2012-0009

Bauman, D. C. (2018). Plato on Virtuous Leadership: An Ancient Model for Modern Business.

Journal Business Ethics Quarterly, 28(3), 251-274. https://doi.org/10.1017/beq.2017.31

Kurasi, S., Hoeffler, S., & Lacobucci, D. (2013). Trusting and Monitoring Business Partners

throughout the Relationship Life Cycle. Journal of Business-to-Business Marketing,

20(3), 119-138. https://doi.org/10.1080/1051712X.2012.757716

Morgan, Robert M, and Shelby D. Hunt. 1994. “The Commitment-Trust Theory of Relationship

Marketing.” Journal of Marketing 58 (July): 20–38.