Let us consider in more detail the actions of Whole Foods CEO John Mackey’s use of the name “rahodeb” for online postings. Mackey used the name for a number of years while posting online including posts to a Yahoo financial forum. In that forum, “rahodeb” was critical of Wild Oats and other Whole Foods competitors while being very positive about Whole Foods. Here is a sample from one post:
“2. Has OATS gotten its act together? Maybe, but I don’t think so. One freak quarter before the CEO dumps 1/2 his stock proves nothing. If OATS produces solid comps and produces good profits for the remainder of 2006, then I’ll change my opinion. Haven’t seen it yet though.
3. OATS didn’t make any money for the next 2 Quarters after I wrote that posting. Again, they made money in their Q4, but it isn’t clear to me that it is sustainable.” http://messages.finance.yahoo.com/Business_&_Finance/Investments/Stocks_(A_to_Z)/Stocks_W/threadview?bn=19842&tid=42698&mid=42957
Most would agree this is rather mild trash talking about a competitor. However, when your company is looking to buy that competitor, are the comments designed to drive down the stock price to your advantage. Federal authorities did investigate but did not press charges. Online postings related to stock prices is a legitimate concern. Other individuals have been punished for using online financial forums to manipulate stock prices. Although Mackey apologized (see the Whole Foods+ CEO + Healthcare Debate = Boycott entry), he said the incident was result of his competitive spirit and part of his right to free expression. He also said on his blog:
“My mistake here was one of judgment—not ethics. I didn’t realize posting under a screen name in an online community such as Yahoo! would be so controversial and would cause so many people to be upset. That was a mistake in judgment on my part and one that I deeply regret because it caused so much negative media attention about me and Whole Foods Market.” http://www2.wholefoodsmarket.com/blogs/jmackey/2008/05/21/back-to-blogging/#more-26
Ultimately, Mackey’s postings under an assumed name hurt Whole Foods’ reputation. The Board disciplined Mackey and there was Federal investigation along with the negative publicity in the tradition and online media. One example ion CNBC’s story “Whole Foods CEO Panned Wild Oats in Web Postings.” http://www.cnbc.com/id/19700361. This was not the light matter that Mackey seemed to think it was at the time and the potential to haunt Whole Foods and Mackey well into the future.
Questions to Consider:
- What is your reaction to Mackey saying this situation is not about ethics but judgment?
- Why would the tradition media be interested in this story (Chapter 6)?
- Why would the online environment be interested in this story (Chapter 7)?
- How does this case illustrate the need for and value of transparency?
- What advice and rational for that advice would you have given Mackey if he told you in advance he was going to engage in such postings?
- Why is it so important to identify biases/interests when posting information online?