CASE STUDY

While Food Market started as one small store in Austin, Texas in 1980, and has since 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.

The acquisition of Wild Oats was not without its problems. The 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." " 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?"

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' website, 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 Rhodeb 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 online postings is intriguing as well as perplexing considering

Whole Foods' corporate vision, which is captured in its Declaration of Interdependence. In part, the Whole Foods Declaration of Interdependence states, "[ojur ability to instil 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?

Discussion Questions

Can the basic interpersonal communication model   be applied to the impersonal nature of an online forum? If so, how?

How does defensive communication enter into this case?

How is the Internet transforming the way people communicate?

What ethical problems are revealed by examining John Mackey's online postings in relation to the communications provision of the Whole Foods Declaration of Interdependence?