CHAPTER 8 – COMMUNICATION

MINI-CASE STUDY

RAHODEB (OR JOHN MACKEY): INTERNET POSTINGS ABOUT WHOLE FOODS

AND WILD OATS

Started as one small store in Austin, Texas in 1980, Whole Foods Market has grown into the
world’s leading retailer of natural and organic foods, with more than 270 locations in North
America and the United Kingdom as of September 2007. Whole Foods was founded by Craig
Weller, Mark Skiles, and John Mackey, who serves as the company’s CEO. Whole Foods has
expanded through the acquisition of numerous companies, including but not limited to
Wellspring Grocery, Fresh Fields, Bread of Life, Merchant of Vino, Allegro Coffee, Nature’s
Heartland, and Harry’s Farmers Market, among others. The most recent acquisition was Wild
Oats Markets.
However, the acquisition of Wild Oats was not without its problems. The U.S. Federal
Trade Commission (FTC) filed suit in June 2007 to block Whole Foods’ acquisition of Wild
Oats; the acquisition was challenged on antitrust grounds. Then in late August 2007, a federal
appeals court turned down the FTC’s request to overturn a federal district court ruling allowing
Whole Foods to complete its purchase of rival grocer Wild Oats.
Interestingly, while conducting its antitrust review, the FTC discovered that, over a
period of several years, John Mackey had posted comments about Whole Foods and its
competitors in the online stock forums of Yahoo Finance. Mackey used the screen name
“Rahodeb”  an anagram of Deborah, the name of Mackey’s wife  to conceal his true identity
as CEO of Whole Foods. At least 240 of Rahodeb’s 1,300 or so posts mentioned Wild Oats, a
company with which Mackey had an increasingly bitter rivalry.
The acrimony between Mackey and Perry Odak, CEO of Wild Oats, can be traced to the
first time the two men met six years ago at a retailing conference in Manhattan in 2001. “I’m
going to destroy you,” Mackey shouted at Odak. Whole Foods’ officials tell a different version
of the story  with milder language  but the confrontation has persisted as a food-industry
legend.
For nearly eight years, John Mackey posted numerous comments about Whole Foods
Market using the pseudonym Rahodeb. In some of his postings, Mackey lauded Whole Foods’
stock, cheered its financial results, and castigated Wild Oats Markets, the company on which
Whole Foods had acquisition designs. In January 2005, Rahodeb posted this opinion: “No
company would want to buy Wild Oats Markets Inc.” Rahodeb continued, “Would Whole Foods
buy OATS? Almost surely not at current prices. What would they gain? OATS locations are too
small.  [Wild Oats management] clearly doesn’t know what it is doing  OATS has no value
and no future.” Other comments that Mackey posted under the Rahodeb alias included the
following: “While I’m not a Mackey groupie  I do admire what the man has accomplished.” “I
love the company and I’m in it for the long haul. I shop at whole foods. I own a great deal of its
stock. I’m aligned with the mission and the values of the company  is there something wrong
with this?”

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 Chapter 8 Mini-Case: Rahodeb, p. 2

Mackey asserts that his online comments were personal, not professional. However,
Mackey’s friends and colleagues say there is little distinction between his personal and
professional sides, and that he is straightforward and transparent. Mackey’s defenders also say,
“his anonymous comments  though boastful, provocative and impulsive  were no different
from his public ones, and were never intended to disclose insider information or move stock
prices.”
In a statement published in mid-July 2007 on the Whole Foods’ Web site, Mackey “said
his anonymous statements didn’t reflect his or the company’s policies or beliefs. Some of the
views Rahodeb expressed, Mr. Mackey said, didn’t match his own beliefs.” Mackey further
stated that he made the anonymous comments on Yahoo Finance because he “had fun doing it.”
As of mid-August 2007, Rahodeb’s (or Mackey’s) online postings were being
investigated through an informal Securities and Exchange Commission (SEC) inquiry and an
internal probe by Whole Foods’ board. Whole Foods has asserted that Mackey’s online postings
from 1999 to 2006 under the screen name Rahodeb were designed to “avoid having his
comments associated with the Company and to avoid others placing too much emphasis on his
remarks.”
The whole saga of Rahodeb’s on-line postings is intriguing as well as perplexing in light
of Whole Foods’ corporate vision, which is captured in its Declaration of Interdependence. In
part, the Whole Foods Declaration of Interdependence states, “[o]ur ability to instill a clear sense
of interdependence among our various stakeholders  is contingent upon our efforts to
communicate more often, more openly, and more compassionately. Better communication equals
better understanding and more trust.”
How should Mackey’s postings under the screen name Rahodeb be viewed in light of the
communications provision of the Whole Foods Declaration of Interdependence?

SOURCE: This case was written by Michael K. McCuddy, The Louis S. and Mary L. Morgal
Chair of Christian Business Ethics and Professor of Management, College of Business
Administration, Valparaiso University.

References:

About Us, Whole Foods Market, http://www.wholefoodsmarket.com/company/facts.html

(accessed September 26, 2007); Welcome to Whole foods Market, Whole Foods Market,
http://www.wholefoodsmarket.com/company/index.html (accessed September 26, 2007); Our
History, Whole Foods Market, http://www.wholefoodsmarket.com/company/history.html
(accessed October 10, 2007); Kesmodel, D., and Eig, J. (2007) Unraveling Rahodeb: A Grocer’s
Brash Style -2-, Wall Street Journal, Eastern edition (July 20), pp. A1+; Kesmodel, D. (2007)
Court Clears Whole Foods Deal; FTC Loses Appeal to Delay Acquisition of Wild Oats, But
Other Options Remain, Wall Street Journal, Eastern edition (August 24), p. A2; Kesmodel, D.
(2007) Whole Foods Wins Ruling on Wild Oats, Wall Street Journal, Eastern edition (August
17), p. A3; Kesmodel, D. (2007) SEC Opens Informal Inquiry of Whole Foods CEO Postings,
Wall Street Journal, Eastern edition (July 14), p. A2; Kesmodel, D., and Wilke, J.R. (2007)
Whole Foods Is Hot, Wild Oats a Dud — So Said ‘Rahodeb’; The Again, Yahoo Poster was a
Whole Foods Staffer, the CEO to Be Precise, Wall Street Journal, Eastern edition (July 12),

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 Chapter 8 Mini-Case: Rahodeb, p. 3

pp. A1+; Declaration of Interdependence, Whole Foods Market,

http://www.wholefoodsmarket.com/cgi-bin/print10pt.cgi?url=/company/declaration.html
(accessed September 26, 2007).

Copyright © 2015 Nelson Education Ltd.

 Chapter 8 Mini-Case: Rahodeb, p. 4

QUIZ QUESTIONS

1. John Mackey’s online postings as Radoheb were examples of _________________ that

contained the thoughts and feelings he intended to evoke in the receiver:
a. reflective listening
b. feedback
c. messages
d. language
e. data

2. When someone read one of Mackey’s postings and commented on it in the online forum,
they were providing:
a. reflective response
b. data
c. richness
d. feedback

3. The reported confrontation at a retailing conference during which John Mackey shouted at
Wild Oats CEO Perry Odak that he was going to “destroy” him is an example of:
a. defensive communication
b. nondefensive communication
c. subordinate defensiveness
d. empathy

4. Mackey’s online postings as Radoheb are examples of defensive tactics that raise
____________________ and issues for those involved.
a. personality conflicts
b. interpersonal dilemmas
c. ethical dilemmas
d. cultural misunderstandings

5. John Mackey demonstrated the subordinate pattern of defensiveness when he threatened the
CEO of Wild Oats at a retailing conference.
a. True
b. False

6. Mackey’s online postings are an example of nonverbal communication because they were
written, not spoken.
a. True
b. False

Copyright © 2015 Nelson Education Ltd.