Doing Well and Doing Good

Cannot believe how excited I am about what is happening at Market Basket.  The idea that the people are rising up in support of the business values they deem important and fighting against corporate America is just thrilling.  I have nothing against corporate America, I think it is a fabulous entity.  But really, corporations are just that, entities, regardless of what the Supreme Court ruled, corporations are not people and they cannot replace the heart of our country.  That belongs to the People.

And then I saw this article by Leon Neyfakh in the Boston Globe on Sunday and my heart soured even further.  http://www.bostonglobe.com/ideas/2014/08/02/shareholder-value-bad-for-business/3O4MYxjWgmJ2DOPwkeYxyN/story.html  He quotes liberally from "Redefining the Corporation" by Boston University Professor Emeritus James Post on the history of corporations in America.  According to Post, up until the 1970's corporations were primarily concerned about "stakeholder value" as opposed to current emphasis on "shareholder value".  There is a very distinct difference between the two.  

By focusing as they currently do on shareholder value, corporations have a single minded focus on increasing the profits of their stockholders.  Every decision they make is based on whether or not the decision will increase their bottom line.  That is what has been preached and practiced since the mid 70's.  Prior to that things were vastly different.

'Back in the day', corporations were focused on providing a service to the community.  The stakeholders they served were everyone that had a vested interest.  That included their employees, their customers, their suppliers, their neighbors and their community at large.  That is a vastly different focus.  If a corporation is consumed with serving the community as opposed to the owners it may well operate in a more civic minded manner.  It would be concerned that its employees make a living wage, that it operates in a manner that is respectful of the environment, it might help support community resources that benefit the community at large and collaborate with its suppliers, employees and customers to ensure everyone's needs are being met.

Think how different our lives would be if more corporations invested in their stakeholders.  Sure it is nice to amass more and more zeros in the bank account but at some point, how many zeros are really necessary to prove one's worth?  Wouldn't it be nice to know that everyone was getting an adequate piece of the pie?  That the business you are running is not only generating a profit for the owners but is also contributing to society in a manner that is to the benefit of all?  Our unemployed, underemployed and employed but underpaid could all rise up in the ranks.  Our streets, education system, environment all could benefit from the support of the many corporation that depend on them for the very wealth they generate.

We have many modern day examples of this with Market Basket under the leadership of Arthur T. Demoulas being a prime example.  Clover, the restaurant profiled in Sunday's Boston Globe magazine is another.  It is clearly very 'doable' to both do well and do good when running a business.  Kudos to Market Basket employees and customers for standing up for what they believe in.  More of us might consider the same.