Two of the dilemmas in this case study involve freedom of speech for the President of Whole Foods John Mackey and the concept of capitalism. Mr. Mackey has been criticized for expressing his opinion. In one example Mr. Mackey disparaged a company in a blog for a period of years prior to purchasing the company (Ferrell, Fraedrich, & Ferrell, 2017). While Mr. Mackey did not break the law, he posted the remarks under a pseudonym, creating an appearance of impropriety. Mr. Mackey also exercised his freedom of speech when he criticized universal health care in a newspaper article. The question here is, was he expressing his personal opinion or the opinion of Whole Foods? As the leader of the company can his opinions be separated from the opinion of Whole Foods? CEO Mackey was sued by the Federal Trade Commission (FTC) for violating anti-trust laws. The FTC maintained that purchasing this competitor would reduce competition in that area. Was Mr. Mackey not just practicing good business?
Whole Foods' commitment to customers has helped the company gain a competitive advantage over competitors. Whole foods consider its customers a high priority by building relationships with its customers. The employees are encouraged to treat the customers as if they are part of their family. Whole Foods ensures that the environment of its stores is appealing and provides free samples. In addition to an appealing environment and first class treatment customers are offered the opportunity to participate in a rewards program and offer discounts and sales frequently.
Employees are also important to Whole Foods. The company takes steps to ensure the employees are compensated fairly. This is accomplished by capping the executive's pay at 19 times the average salary of a full-time employee. Employees are eligible for discounts on company products. Whole Foods also has programs that give additional discounts to employees who have healthy lifestyles evidenced by having low cholesterol, low blood pressure, and are tobacco-free. In addition to fair pay and discounts, certain employees are eligible for health coverage. Some employees are also eligible for stock options.
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Whole foods recognize the interconnectedness of stakeholders. Whole foods provides aid to communities in developing countries by creating an economic partnerships with entrepreneurs. They accomplish this by providing small loans to those who want to start a business. Whole foods also partners with local farmers who meet Whole Foods quality standards. Buying local reduces the need for some packaging and uses less fossil fuels to transport the produce to market, saving on energy and reducing pollution. Whole Foods does not limit their outreach to produce. They also meet with special interest groups regarding the treatment of animals. This is not the norm as most companies consider special interest groups as secondary stakeholders.
Although not intentional, Whole Foods neglected stockholders by making a poor business decision when Whole Foods acquired the grocery chain Wild Oats. The settlement between the FTC and Whole Foods was a contributing factor to the decline of Whole Foods stock price. The fall in stock prices compounded the neglect when Whole Foods made the decision to sell foods that did not meet Whole Foods standards to customers. Whole Foods also let down consumers when the New York City Department of Consumer Affairs found discrepancies in the printed weights of products.
John Mackey created Whole foods with the intent of forming a company with the purpose of advancing the quality of life for people. His company would accomplish this by selling healthy foods to encourage healthy living and conduct the business in a conscientious manner. Now that Amazon has purchased Whole Foods, there are some changes that challenge Mackey’s original ideas for the company. Amazon has added Echo devices in the Whole Foods stores. What does a speaker have to do with eating quality food?
One of the things philosophies of Whole Foods was buying locally and fresh. As a rule produce could not travel more than 7 hours from field to storage. Amazon is now centralizing it merchandise. This may have a detrimental effect on the local produce grower and reduce the need for a number of employees as fewer storage areas are needed. Amazon is also centralizing purchasing. This will force some smaller brands to go through headquarters instead of going through the regional office.
Using the four way test in this case study is open to some degree of subjectivity. While the truth can mean different things to different people, in this case there are certain guidelines that are followed that reduces subjectivity. For example, if you do what you say you are going to do and both parties agree, then that is truth. If Whole Foods said they would buy local produce, and they did buy produce local, they pass the truth test. Fairness, again there are degrees of fairness. Is it fair to the Whole Foods shareholders that they had to sell another company after they bought it because it was viewed as eliminating competition? I would like to think that some of our laws are based on fairness.
Does building goodwill and friendships pertain to business? Only if you want to stay in business. It is my experience that I do not do business with people or companies that I don’t like. Whole Foods trained their employees to treat customers like family. Don’t we like to go places where we feel welcomed? I think that in order for a transaction to be beneficial to all concerned, it is important that each party have a good understanding of what they want out of the transaction. It seems somewhat odd to me that Amazon would want to purchase a health food store. That is until I read an article that explained that by buying Whole Foods Amazon will be able to compare the shopping habits of their customers shop online and in a bricks and mortar setting
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