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Market Basket: Turmoil Within

Izak Munoz

South Texas College

Organizational Change-CBE

Professor Dora Vargas-Bustos

June 30th, 2022

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Market Basket: Turmoil Within

Intragroup conflict is one of the worst things that can occur in an organization. It is

enough to crumble an organization from within, and in most cases, it does. Intragroup conflict

was almost the downfall of Market Basket, a very successful supermarket chain, but the

resilience of its employees and their unwavering loyalty to their true Chief Executive Officer

Arthur T. Demoulas kept the company afloat long enough for justice to be served. Victory did

not come without cost though. Everyone from high-level executives, middle managers, even

warehouse workers all came together to overcome turmoil within (Zeynep, 2014).

Market Basket is like no other. What separates Market Basket from its competitors is that

when Market Basket opens up a new location, not only do they open up job opportunities within

the community, but they also help establish a culture for the economy of success by bringing

excellent customer service and employee satisfaction. Another great way Market Basket

differentiates itself from their competitors is the “uncomplicated shopping environment”

(Zeynep, 2014). There is no extra catch that they try to pull you in such as expensive

memberships or any additional fees when shopping there either. The team at Market Basket

really emphasizes simplicity and being straight to the point of getting what you need and being

out the door as fast as possible, saving you money as well as time. Market Basket does diligent

research when opening new locations of its surrounding area by seeing what specific products

are purchased more due to region and always do their homework on what products it needs to

have stocked for customer satisfaction. Speaking of customer satisfaction, when there is a

Dyadic conflict (conflict between two people, such as a customer complaint against the store),

management listens and genuinely cares about ways to improve the customer experience and will
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go out of their way to satisfy the customer. Market Basket indeed does many things to separate

themselves from the pack (Zeynep, 2014).

Volume, volume, and more volume. This is one of the main reasons why Market Basket

has been so successful. What Market Basket does is essentially buy their products in bulk and

sell them considerably cheaper than competing supermarkets. For example, if the competitor

store buys 10,000 watermelons and sells them for $8.99, Market Basket is going to undercut that

price and buy 100,000 watermelons, while setting the price at $6.99. This is what keeps

customers back. Cheapest prices on the market as well as outstanding customer service. Market

Basket also pride themselves in having almost no intergroup conflicts within their stores, such as

the deli department having a grudge against the produce for being the favored department and so

on. On the contrary, all departments come together to eliminate any intergroup conflicts because

by working together they increase their chances of receiving bonuses every quarter from the

Employee Profit Sharing Fund (Zeynep, 2014).

The firing of Arthur T. is what created the turmoil within Market Basket. Not only were

sales affected dramatically by his firing, but senior employees who had worked at the company

for 35 plus years resigned as well, because Arthur T’s leadership meant that much to everyone.

What made people resign on the spot over the firing Arthur T. was everyone in the organization

knew he has always been for the people and has always prioritized customer satisfaction, “…

Staying close to the customer was one of Arthur T.’s management principles…” (Zeynep,

Kochan, Reavis, 2014, para. 27). The conflict process is on full display when Arthur S. and his

family decided to intervene and remove Arthur T. as president. The first conflict inducing

situation was the opposition that Arthur S. had against Arthur T. Arthur S. felt that he was the

rightful CEO to Market Basket and convinced the board members to remove Arthur T. from his
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CEO position. This sparked an outcry of emotions from almost everyone. From every Market

Basket store director to vendors that have done business with Arthur T. for years, they all knew

losing him was going to be bad for business. Outraged by the firing, employees and vendors

alike took matters into their own hands.

It was on a Monday, June 23rd of 2014, when Arthur T. was fired. This is what created the

relationship conflict between employees and the new CEO. On July 18th, 200 plus employees

walked out of their jobs in protest of the firing of Arthur T, only about three and a half weeks

removed from the worst decision the board members have ever made. Less than two weeks into

the protest, the company was down a staggering 90% on sales. The protests would continue all

the way up to August 27th, 2014, when the board finally let Arthur T. purchase 50.5% of the

company back. The collective action of the protests worked. Keep in mind that many people lost

their jobs and thousands of hours were cut and hundreds of employees were willing to go without

pay, for one man, Arthur T. (Zeynep, 2014).

The aftermath of the protests was definitely a heavy burden for Market Basket. Over 1

billion dollars in debt is what it took to buy out the majority share from Arthur S., but employees

were unwavering and were determined to make it work. Tom Trainer, who was an employee,

said “…We’ve all take on the debt ourselves, we are going to do whatever it takes to cut

costs…” (Zeynep, Kochan, Reavis, 2014, para. 65). In essence, it does not matter what business

model is put in front of the employees, with Arthur T. at the helm of Market Basket, the

employees at Market Basket are determined to overcome any conflict that crosses their path.
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References

Zeynep, T., Kochan, T., Reavis, C. (2014) “We are Market Basket” p. 1-66