Faith and Fortune The Quiet Revolution To Reform American Business

1 A Quiet Revolution In 1924, the president of the J. C. Penney Co. wrote to the manager of a company store in Eureka, Oregon, to praise him and his team for a job well done. "You did the most business that has ever been done in Eureka, and made the most money that has ever been made. I congratulate each and every one of you," said the executive. Then he delivered a gentle rebuke. "I don't want you to get the idea, Mr. Hughes, that we want you to make too much profit. There is danger in doing that very thing. There is a certain service that we owe to our community. Now, don't misunderstand me, I am not censuring you, but somewhere in the operations of the Eureka business there is a profit that we owe to the public." Profits mattered to James C. Penney Jr., the company's founder and its guiding spirit for fifty years, but his Christian values mattered even more. The son, grandson and great-grandson of preachers, Penney had started his chain of stores, which were originally called the Golden Rule stores, with a single outlet in Kemmerer, Wyoming, in 1902. Operating in small towns at first, he dedicated the company to serviceservice to its working-class customers, who expected quality goods at fair prices, and service to its employees, whom he treated like family. Long before the advent of stock options, Penney gave every one of his store manager's shares in the parent company so that they could share in its profits and success. "Business never was and never will be anything more or less than people serving other people," Penney wrote in Fifty Years with the Golden Rule, his autobiography. So committed was Penney to his values that Penney Co. stores did not offer credit for many years because he believed that his customers needed to cultivate the virtue of thrift. When the company's board of directors finally voted to make credit available in 1957, long after rivals like Sears had done so, Penney continued to voice his reservations. "You will end up encouraging people to buy things they can not afford and should not buy," he told the board. "By offering credit, we encourage them to overbuy. With me, it is a moral issue of getting people in financial trouble." His ethic of service proved to be good for business. By the time of his death in 1971, the J. C. Penney Co. employed 162,000 people in 1,570 stores that rang up sales of $4.7 billion. For Milton S. Hershey, too, business was about more than making money. What excited the inventor of the nickel candy bar was the opportunity to make the world, or at least his little corner of it, into a happier place. To that end, he transformed twelve hundred acres of rolling Pennsylvania farmland into America's most famous company town, a place where, as he put it, "the things of modern progress all center in a town that has no poverty, no nuisances and no evil." In contrast to the faceless company towns erected by nineteenth-century industrialists, Hershey, Pennsylvania, offered parks and swimming pools, a golf course and a roller coaster, a hotel, a sports arena, an ice-skating rink, a library and a two-year junior college where tuition was free. Raised by his mother, Fannie, a dour Mennonite who disdained worldly pleasures, Milton Hershey rebelled by starting a business that brought smiles to the faces of millions of children. His bedrock values included charity, modesty and service. "Business is a matter of Human Service," read a sign on his office wall. After his wife, Kitty, died in 1915, Hershey gave all of his shares in the company to a school for orphan boys that he and his wife had started. "I have no heirsthat is, children," he explained. "So I decided to make the orphan boys of the U.S. my heirs." Hershey's paternalistic dream faded over time. To his dismay, workers seeking higher wages struck the company in 193Gunther, Marc is the author of 'Faith and Fortune The Quiet Revolution To Reform American Business', published 2004 under ISBN 9781400048939 and ISBN 1400048931.