Case Studies in Corporate Actual Responsibility
Four American companies demonstrate how to fulfill corporate obligations without sacrificing corporate performance.
American Compass has identified and profiled four American companies that have each exemplified corporate responsibility to workers, families, communities, or the nation.
QuikTrip’s Responsibility to Workers
Corporate actual responsibility encompasses a set of obligations to workers to secure good jobs that can support families and offer professional development and advancement.
The Tulsa, Oklahoma-based gasoline and convenience store chain QuikTrip has fulfilled these obligations while steadily growing and routinely outperforming its competitors. According to CEO Chet Cadieux, who took over the business from his father in 2002, the company has “always believed … employees deserved to be well paid while having great benefits and providing the opportunity to grow and succeed.” For the last two decades, the $11-billion business with more than 800 stores in eleven states has consisted been considered one of the nation’s best employers.
In much of the retail sector, labor is seen as a cost-driver to be cut wherever feasible, but QuikTrip views its labor force as an investment. The business of front-line retail employees—restocking shelves, handling inventory, assisting customers—requires judgement and social skills that cannot be easily replicated, automated, or outsourced. QuikTrip invests tremendous resources in identifying talent, paying workers well, and promoting from within.
This philosophy began under Cadieux’s father, who in the 1980s took steps to standardize store policies and improve the treatment of employees, noting that the company “had become large enough to act more responsibly.” Cadieux, who has been ranked among the nation’s top CEOs, has only increased QuikTrip’s investments in its workers. There’s a for a simple reason for it, he says: “My family has done well because of their hard work. I want to make sure they’re taken care of and know they are appreciated.”
That investment begins with family-supporting wages. The median American cashier makes just $23,650 a year, below the poverty line for a single-earner family of four. QuikTrip’s full-time employees start at roughly $40,000 per year, plus benefits. Employees also earn bonuses based on overall store performance. Full-time employees are taught to read and interpret their store’s monthly financial statements and earn a portion of their store’s and division’s operating profit. Employees also earn bonuses based on performance in routine “mystery shopper” reviews of the store’s customer service.
QuikTrip not only pays wages that can support a family, but adopts scheduling policies that can accommodate the demands of raising a family. When Cadieux observed that the stores’ demanding, unpredictable hours and understaffing “made it very difficult to have a normal life with a family,” the company invested $10 million in additional full-time employees to ensure that stores were adequately staffed to allow for more predictable, balanced schedules. In additional, all full-time employees may request up to 10 days of additional unpaid, personal time off for family activities or obligations—such as school events, recitals, graduations, or vacation. The company invests in and retains “relief employees,” who work on a part-time basis and do not belong to any particular store to fill in when store workers take time off.
But entry-level employment at QuikTrip is not just a good job; it is the start of a career for many hires. The company is committed to developing the potential of its employees and promoting from within. Its statement of purpose includes a commitment “to provide an opportunity for employees to grow and succeed.” Employees receive extensive training—40 hours for part-time and roughly two full weeks for full-time—after undergoing a rigorous hiring process and then benefit from targeted support programs throughout their career. As with profit-sharing and performance bonuses, front-line staff are considered to be partners within the larger business. The company organizes “resource groups” of front-line employees who meet regularly to discuss challenges and ideas for improvement. Employees are encouraged to identify opportunities to enhance operations to better meet customers’ needs, and many contact Cadieux directly via e-mail to share their ideas. Because of this culture of partnership, QuikTrip routinely promotes employees from within; most of its executives and nearly all of its store managers began as entry-level store employees and worked their way up through the company’s ranks.
Entry-level jobs need not be “dead-end” or “bad” jobs. Responsible corporations like QuikTrip show that investing in workers, offering family-supporting pay and policies, and creating opportunities for professional development, can give employees greater economic security and a deeper stake in their company’s success.
Mars, Inc.’s Responsibility to Families
Corporate actual responsibility includes the obligation of employers to respect the balance of work and family commitments and to support employees’ aspirations for family formation.
Recent campaigns for gender parity have drawn public attention to the “family-friendly workplace.” But such initiatives typically provide additional benefits for white-collar professionals and focus on keeping women attached to the workforce and climbing the corporate ladder—to the point that some firms even offer to cover the cost of freezing eggs. The lists of the top family- and parent-supporting businesses are dominated by technology and professional services firms. Often overlooked are the needs of workers in service occupations, skilled trades, production jobs, and low-skill labor, and the desire that many have to focus more attention on family obligations.
Now in its one hundred and ninth year, the family-owned food and confectionery company, Mars, Incorporated, has consistently been recognized as one of the country’s best employers – and the only one in the food production industry. Based in McLean, Virginia, Mars has grown into a multi-national company with over 100,000 employees in over 80 countries and a multi-billion-dollar portfolio of some of the world’s most iconic brands. More than two-thirds of the company’s American workers are employed at its 13 U.S. factories, which makes its focus on supporting workers’ families all the more noteworthy.
The Mars philosophy of corporate responsibility dates back to 1947, when Forest E. Mars, Sr. penned a company-wide letter that outlined the principle of “mutuality of benefits for all stakeholders.” This mutuality principle has evolved through the years to encompass new stakeholders and inspire new initiatives, and it has also laid the groundwork for the benefits that the Mars family now offers to their workers’ families. Board member and former chairman Victoria Mars explains, “Working together with our Associates when they become parents or have family responsibilities that require focus is the right thing to do, and it is the smart thing to do for our business.” Such values have established loyalty with the Mars family’s employees. An estimated 12 percent of its U.S. workforce has been with the company for 20 or more years.
Mars provides generous benefits to its employees to support their aspirations for family formation. The company offers new parents 30 days of paid parental leave and provides 6 weeks of short-term-disability coverage for new mothers. Couples seeking to adopt children can receive a $5,000 benefit per child to cover adoption-related expenses and 30 days of paid parental leave. Employment policies at Mars also respect a balance of work and family obligations. The company guarantees flexibility so that employees can support loved ones and raise children. Half of all workers take advantage of flexible scheduling, while more than a third have a compressed workweek or opt to telecommute from home.
Policies like these meet workers where they are and provide the options they value—which, for many, means getting to spend more time with their families, not more time with the CEO. Mars shows that such benefits can extend to workers in any sector or occupation if employers make it a priority.
Gallery Furniture’s Responsibility to Communities
Corporate actual responsibility entails an obligation to invest broadly in actual communities rather than funding and advocating national progressive causes.
Gallery Furniture, an independent retailer in Houston, Texas, has become a fixture of its local community by dedicating company assets and orienting operations toward supporting the local common good. CEO Jim McIngvale, who founded the company in 1981, explains his commitment simply: “Capitalists like myself have an obligation to give back and make our communities a better place.”
McIngvale has long been a public figure in Houston, beloved as “Mattress Mack” for his notorious, low-budget commercials featuring him wearing a mattress and delivering the tagline, “Gallery Furniture will save you money!” Offering value-priced furniture and guaranteeing same-day delivery to mostly blue-collar households drawn to Houston by its booming industrial economy, he has built a $175-million business that sells more furniture per square-foot of retail space than any independent retailer in the country. Over the years, McIngvale has tried to be a responsible employer and businessowner – restructuring compensation to create more stable income for employees and stocking inventory with nearly all American-made products. “It was unbelievable for some,” he says, “to think that a business could make a decision based on patriotism or because it was the right thing to do.”
Gallery Furniture and “Mattress Mack” have spearheaded a number of charitable programs in Houston. For nearly forty years, the company has furnished the homes of thirty local families at Christmas. It hosts thousands of Houstonians for a free Thanksgiving meal, partners with the USO to refurnish facilities for military families worldwide, and funds local public spaces from YMCA playgrounds to exhibits at the Houston Zoo to tennis courts and equipment for underserved neighborhoods. McIngvale has earned numerous honors for his philanthropic work in the city and was the first “Point of Light” award recipient to be personally nominated by President George H.W. Bush.
But what distinguishes Gallery Furniture is that it invests directly in the community and uses its own assets and operations, not just charitable donations, to address local challenges. In 2017, when Hurricane Harvey left much of Houston underwater, Gallery Furniture deployed its delivery trucks to rescue flood victims and transformed its showrooms into shelters for displaced residents. Evacuees received clean clothes, toiletries, and new mattresses as well as access to free meals and portable showers.
More recently, Gallery Furniture has repurposed its stores in another way. The average household income within a five-mile radius of Gallery Furniture’s largest stores is just $29,000. Seeking a better way to invest in these communities, McIngvale resolved to equip residents with the skills and credentials to seek employment at his stores and elsewhere in the area. He downsized his 120,000-square-foot, flagship store and dedicated half of its footprint to a new community center called WorkTexas. The center provides completion credits for those seeking a high school diploma as well as free vocational training and certification in skilled trades, such as carpentry, metalworking, and commercial truck driving—creating a viable path to employment at Gallery Furniture or elsewhere in Houston. Designed in partnership with local non-profit organizations and education providers, the center also offers support services, such as childcare, counseling, financial planning, English language courses, and career guidance.
Corporations regularly sponsor local or national causes in exchange for a prominently placed logo, but such initiatives often fail to address the root problem, which is not just lack of cash but lack of talent and infrastructure. Using a business’s own resources and capabilities may not deliver the same bang for the marketing buck, but it is more likely to be exactly what the local community needs.
Intel’s Responsibility to the Nation
Corporate actual responsibility entails an obligation to the nation to reinvest in its “industrial commons” and make strategic decisions that improve its economic trajectory.
Long a giant of American innovation and high-tech manufacturing, the Silicon Valley-based chipmaker Intel has made a conscious priority of bolstering American competitiveness in a strategic sector. Many technology firms have decided that physical assets and manufacturing know-how are unnecessary in a knowledge-based economy and pursued strategies that seek to minimize capital investment. Intel, by contrast, has built and maintained its competitive advantage through a strategy of vertical integration in manufacturing, excelling in the design, fabrication, and marketing of its own products. It is now the world’s largest and most valuable semiconductor chipmaker and the only one that has kept a large portion of its production in the United States.
The chipmaking industry is unique in the degree to which success requires not only designing new and better products, but also designing new and better tools to make those products. Governed by “Moore’s Law,” named for Intel co-founder Gordon Moore, the industry has consistently managed to double the number of transistors that could fit on a chip every two years. Yet many chipmakers have pursued a “fabless” business model, in which they design and sell semiconductors, but outsource fabrication to foundries based most commonly in Asia. Not Intel; the American chipmaker has operated and expanded its own foundries in the U.S. and around the world.
Under the long-time leadership of iconic CEO Andy Grove, Intel remained a perennial investor in the American industrial base, whether through expansion of its own domestic production facilities or through collaborations with the U.S. government. “All of us in business,” Grove claimed, “have a responsibility to maintain the industrial base on which we depend and the society whose adaptability — and stability — we may have taken for granted.” Through the 1980s, as Japanese mercantilism threatened American hegemony in high-tech sectors, Intel was at the forefront of American efforts to secure its technology supremacy. Most notably, it was heavily involved in the U.S. government’s SEMATECH (Semiconductor Manufacturing Technology) program, a public-private consortium of leading American chipmakers launched in 1988 to revitalize the American semiconductor industry. Intel’s co-founder, Robert Noyce, led the program through its early years, and its success became a model for future public-private efforts in high-tech research and development. The “flagship technonationalist venture” has since been widely credited within American industry for cementing U.S. semiconductor leadership at a crucial time.
Grove was also a vocal, public critic of offshoring and the failure of American firms to invest in domestic production. The Hungarian-born engineer emerged as a Cassandra of American manufacturing and economic policy, warning that underinvestment and offshoring would hobble American innovation and destroy the livelihoods of millions of Americans. He challenged the prevailing belief that an innovation-based, “knowledge” economy could grow sustainably without a domestic manufacturing base to scale its innovations. “Without scaling,” Grove argued, “we don’t just lose jobs—we lose our hold on new technologies. Losing the ability to scale will ultimately damage our capacity to innovate.”
Intel remains one of the world’s leading investors in R&D and has prioritized American competitiveness in its strategic decision-making. In 2017, the company announced that it would invest an additional $7 billion in existing production facilities in Oregon, Arizona, and New Mexico. (For a sense of scale: in 2019, foreign direct investment in establishing or expanding U.S. operations, across all industries, totaled just $4 billion.) Then-CEO Paul Otellini explained that Intel “made a conscious decision to expand these factories here because we believe that investing in the future of American discovery isn’t just the right thing to do, it is an essential business decision if we want the United States to continue to be the engine of new ideas and technical leadership.”
Now, as the COVID-19 pandemic has exposed the fragility of America’s critical supply chains, Intel is already considering a new public-private collaboration with the U.S. government to restore the nation’s high-tech supply chains. In a letter to the Pentagon, CEO Bob Swan expressed Intel’s readiness to support efforts to build a commercial foundry and “ensure continued US technological leadership.” While it remains to be seen what (if any) efforts the federal government will pursue, Intel has been at the center of discussions about strengthening the American semiconductor manufacturing base.
But Intel has also met an inflection point. Recent production delays for a state-of-the-art, 7-nanometer chip have forced Intel executives to contemplate outsourcing fabrication to its Taiwanese rival TSMC, who now leads the industry in chip development and has invested in U.S. production facilities.
The nation’s economic competitiveness doesn’t have to be sacrificed to maintain technological innovation or corporate performance—to the contrary, they can go hand in hand. Andy Grove’s Intel upheld its obligations to the nation while maintaining its competitive advantage in an intensely competitive, innovation-driven, global market. The near future will test whether Intel still abides by those lessons.See more from this series
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