Maine Writer

Its about people and issues I care about.

My Photo
Name:
Location: Topsham, MAINE, United States

My blogs are dedicated to the issues I care about. Thank you to all who take the time to read something I've written.

Thursday, August 28, 2014

Marketbasket: a foiled takeover and failed corporate greed

When Marketbasket employees stood against a management takeover of the company against the original owner, the statement by the employees was a shot over the bow for those who follow harbingers of labor changes. If Marketbasket employees can influence the management of a successful food retailer, then other employees can have the same leverage in family owned businesses.

Employees of Marketbasket knew what the greedy outcome of their company would be if the majority company share holders prevailed in firing the original owner of the company. In firing the minority owner, the corporate board would be free to obtain the votes required to negotiate a takeover sale of the company to the highest bidder. Eventually, and probably shortly after the proposed sale, the corporate board would walk off with the profits from the sale of the company while the new investors would cut costs to increase profits. This is the model for most entrepreneurial takeover initiatives. They buy a good company and slash the cost of the management of the company to increase profits to the takeover investors.

But, the Marketbasket employees saw this coming.  Most other employees, however, don't have a company minority owner like Arthur T. Demoulas, who they can rally behind. Typically, owners of companies that allow for such entrepreneurial takeovers are complicit in the sale.  Mr. Arthur Demoulas was willing to stand with his employees. Several weeks of Marketbasket turmoil eventually resulted in the minority owner of Marketbasket negotiating a buy out of the majority owners.

Although this outcome was a victory for the Marketbasket employees who stood behind their minority owner leader, the overall long term result of this story has yet to be understood.  

If employees of a corporation can influence the ownership of a company, what does this mean for the future of family owned businesses?  We don't know.

Nevertheless, in my opinion, Marketbasket employees have created a new level of labor-management relations. In the post- Marketbasket management change world, the employees and management are on the same side of the labor world, rather than on opposite ends of the spectrum.

Regardless of how the foiled Marketbasket takeover eventually turns out (in other words, will the company become profitable again?) the fact is, the corporate greed takeover was usurped by the employees. 

Marketbasket is a harbinger of a new era in management - labor relations. It might be possible for Marketbasket to  begin a trend in management and labor alliances. A new normal?

Labels: , ,

0 Comments:

Post a Comment

<< Home