—.————-——— -V_ ..,*.'.,,..‘.1~'..“« .fi....~~....-.' ... m..-~~"-."~ wimv.s-.' coo- *H.-.~‘ boa . .‘to ' "“M.‘"-~ r....ow.omu‘g’¢.~ “.W‘I‘OO. ' '-' AN EVALUATION OF CAREER POTENTIALS Thesis {or the Degree of M. A. MICHIGAN STATE UNIVERSITY ’ Donald E. Harrington 1956 H” i afi'h'". AN EVALUATION OF CAREER POTENTIALS IN THE FOOD DISTRIBUTION INDUSTRY by Donald E. Harrington AN ABSTRACT Submitted to the College of Business and Public Service of Michigan State University of Agriculture and Applied Science in partial fulfillment of the requirements for the degree of MASTER OF ARTS Department of General Business Curriculum in Food Distribution ./’—> 1' «/ Approved (/60 //K /\—,.A M6,, IL, Ct. 35‘- I Donald E. Harrington The purpose of this study is to point out the career potential existing in the food distribution industry and to suggest ways to inform the general public of this fact. Food distribution is an expand- ing industry and there are many opportunities available to young men who are interested in this field. At present, most American businesses have a shortage of executive talent. Food distribution companies are also feeling the shortage of executive talent and the shortage is ampli- fied in some cases because of the extension of executive positions to the store management level. American business is turning to the colleges in order to recruit young men who can be developed into the leaders of tomorrow. The number of college graduates has increased, but not substantially enough to meet the demands of business. Food companies recruiting on college campuses are not only competing with companies in the same industry, but with companies in all industries. The demand for college graduates is at an all—time high. Students are taking an increasing number of interviews before accepting a position with a particular company. Opportunity for advancement, challenging training programs, competitive starting salaries, and long—range benefits are what the students consider most important in choosing a Job. Food distribution, a part of retailing, is considered by many college students to be one of the less-glamorous fields. The recruiters of food distribution companies have a Job not only to sell their company, but the entire industry. The Job characteristics desired by college students that were mentioned above can be found in the food distribution industry. Young men entering Donald E. Harrington this field are not limited to any particular Job, but can choose from approximately 250 Job classifications. Those students who are interested in food distribution can find a challenging and promising future in this field. Although the food distribution industry offers a promising career to young men, the general public is not cognizant of this fact. Food chains have a Job of convincing the general public, their employees, and students that this field has much to offer young men. "The Survey of Food Distribution Students", Chapter Five, was conducted to determine what made the young men attending the Food Distribution Curriculum.at Michigan State University enter this field. The survey revealed the low percentage of students who had relations in the industry; the high per- centage of students who started work as part-timers while still in high school; the little amount of advice about food distribution given to the students in super markets, high schools, and colleges. With the facts presented in this survey in mind, the author attempts to suggest ways that food chains could encourage more young men to seek careers in food distribution. As a first step, the chains should gain a favorable attitude toward the industry from the general public. The use of more dignified terminology when referring to positions in the industry or the industry as a whole; open houses so the public can see the operations behind the sales areas of super markets; speakers bureaus and motion picture films informing the public about the vastness food distribution entails; and press releases to keep the public abreast of current happenings in the industry are good tools to use in communicating with the general public. Once the public Donald E. Harrington has the attitude that food distribution entails more than Just stocking cans on a shelf, the Job of attracting college graduates into the industry will be made easier. Employees play an important role in formulating the opinion of the general public toward an industry or company. Employees, whether start ing or terminating employment, should be treated in a friendly manner so they will speak favorably of the company in conversations with their ' acquaintances. Families of employees can play an important part in estab- lishing the dignity and prestige of jobs and should be given the opportunity to see the operation involved in food distribution so the right impression will be created in their minds. Part-time workers are good potential execu- tives and this group should not be overlooked by the chains. The more part- timers can see of food distribution above the store level, the greater the chance-of convincing them of the possibilities of careers in this industry. In order to acquaint the college students with the various facts about the food distribution industry, companies should supply the libraries of the college placement bureaus with literature about the industry as well as their own company. Food distribution companies could attract under- graduates into the industry by offering such things as summer training programs and cooperative educational programs. Sponsoring career days and contests for high school students will help to educate the young American men on the career possibilities found in food distribution. College undergraduates and high school students represent a good area of concentration for the food chains inasmuch as this group will be the poten- tial business leaders of tomorrow. Educators and guidance counselors, both Donald E. Harrington at the high school and college level, can be influential in aiding the students selecting careers. In the future,chains would be wise to create a closer relationship with this group in order to acquaint them with the career potentials available in food distribution to the up and coming young Americans. "The Food Distribution program at Michigan State University is under the sponsorship of the National Association of Food Chains." AN EVALUATION OF THE CAREER POTENTIALS IN THE FOOD DISTRIBUTION INDUSTRY By Donald E. Harrington A THESIS Submitted to the College of Business and Public Service of Michigan State University of Agriculture and Applied Science in partial fulfillment of the requirements for the degree of MASTER OF ARTS Department of General Business Curriculum in Food Distribution THE-135.8 ACKNOWLEDGEMENTS The writer wishes to express his deepest appreciation to the National Association of Food Chains and The Grand Union Company for the financial aid which made his attending the Food Distribution Curriculum possible. For the assistance given by Dr. Edward A. Brand, Director of the Food Distribution Curriculum and Dr. David J. Luck, Director of the Bureau of Business Research, under whose guidance and supervision this study was undertaken, the writer is especially grateful. Special thanks are in order to Mr. Marvin Hoffman who assisted in the prepara- tion of the material contained in this study. The help and secretarial skills of Mmes. Irma Steder and Margaret Curry were of great value. The writer is extremely grateful for the patience, understanding, and encouragement of his wife, Geraldine. Donald E. Harrington PREFACE Food distribution is an expanding industry and there are many career oppotunities available for young men who are interested in this field. Many persons do not realize the vastness of food distribution; and, hence, are not aware of the existing career opportunities. The purpose of this thesis is to explain the career possibilities existing for young men in food distribution and to suggest ways to familiarize the general public of this fact. Chapter One and Two explain the growth of American business as a whole and the increased shortage of qualified executives. These chapters deal more specifically with the growth of the food distribution industry and its Shortage of executive talent. The purpose of the first two chapters is to explain that food distribution is a large industry and qualified executives are needed to manage the operations of today's super market chains. A store manager, in many instances, has an executive position. The management of many business firms believe colleges are good places to recruit young men who can be developed into future executives. What college students desire when selecting a career in an industry or a company along with the present college recruitment conditions are explained in Chapter Three. Keeping in mind the facts presented in Chapter Three, Chapter Four establishes the fact that there are positions available in food distribution for college graduates--the types of positions graduates desire. In Chapter Five, "The Survey of Food Distribution Students" is presented. The survey pertains to the background of the students attending the Food Distribution Curriculum and what made them decide on the food industry as a career. The findings of the survey are used in subsequent chapters to determine the areas where more publicity about food distribution should be directed. The subsequent chapters suggest ways that food chains can inferm the general public, employees and students (high school and college) about the food distribution industry and the career possibilities existing in this field. TABLE OF CONTENTS CHAPTER PAGE I. THE GROWING FOOD INDUSTRY 1 Retailing Future 2 The Food Industry 4 Food Consumption 4 Product Changes 5 Sales Volume 6 Chain Store Super Markets 6 Sales Increase and Expansion 9 Conclusion 11 II. FOOD DISTRIBUTION'S NEED FOR EXECUTIVES 12 Bigness Has Responsibilities 13 Great Man Hunt 1” Quantitative Need 17 Need For Executives 18 Store Managers as Executives 18 Conclusion 21 III. COLLEGE RECRUITMENT 22 Recruiting Picture Throughout the Country 24 Students' Attitudes 27 Confusion 28 Companies' Attitudes 31 Conclusion 32 IV. COLLEGE GRADUATES AND.FOOD DISTRIBUTION 3n Public Too Close to Retailing 35 College Graduates and Retailing 36 College Graduates and Food Distribution #1 Food Distribution Curriculum NA Manufacturer's Interest 45 Conclusion ”5 CHAPTER V. SURVEY OF FOOD DISTRIBUTION STUDENTS Respondents Areas of the Country Previous Education Relations in Industry Starting Positions Reasons for Taking Job Persons Responsible for First Job Decision on Career Position When Decision Was made Direction at Store Level Direction in Schools Conclusion VI. FOOD CHAINS AND COMMUNITIES Terminology Open Houses Guest Speakers Motion Picture Film Press Releases Summary VII. FOOD CHAINS AND EMPLOYEES Indoctrination and Separation Open Houses for Families Employee Education Part-time Employees Summary VIII. FOOD CHAINS AND STUDENTS Supplying Information Campus Interviews Student Employment While Attending College Cooperative Education High School Students Career Day Contests Educators Summary IX. SUMMARY BIBLIOGRAPHY PAGE CHAPTER I THE GROWING FOOD INDUSTRY The outlook for the entire American economy looks good. Inland Steel's President, Joseph Block, says, "If ever there was a time when predictions on the future growth of American business is safe, this is it."1 There are few economists who think it is possible for the economy to keep raising with the same speed as it did in 1955. But though the united States may rest to digest what it has already produced-- and the breather may stir up cries of "recession"--the forecasts for 1956 are impressive by any standards. For 1956, Administration economists predict a total gross national product of $u03 billion, u percent higher than 1955. Personal income is expected to Jump to around $310 billion, about half the 1955 advance, while savings hold steady at the 1955 rate.2 President Eisenhower predicts a national product of $500 billion in the next decade. This is an increase of $1u1 billion from the 1954 national product of $359 billion. Since 19H7, the population has grown on the average of 2.5 million persons each year compared with the one million annual growth in the nineteen thirties. In 1955, the increase 1"Business in 1955", Time, Vol. LXVII No. 2 (January 9, 1956), p. 78. 21bid., p. 81. was 2.75 million persons and the United States Bureau of Census estimates a population of 190 million people by 1965--a 25 million increase expected in the next ten years.3 Over the past few years consumer prices have remained somewhat stable while the wages of the masses have climbed upward. Coupling the increase in wages--meaning more purchasing power to the consumer-~with the increase in production brought about by automation, the standard of living of millions of Americans has risen enabling them to purchase items that in the past were too expensive. Business as a whole is expected to increase 10 percent in 1956-57 to meet the increases in productivity and standard of living. Some businessmen consider the prosperous 1955 not as a year of excessive expansion but a year of trying to catch up. The number of families earning more than $5,000 annually is increas- ing. It is predicted that by 1959, an increase of more than 50 percent from 13 million to 19.3 million families will fall into this income bracket. The group earning more than $5,000 will account for 60 percent of all the expenditures in 1959 against #8 percent in 1953.5 Retailing Future Not lagging behind the rest of the economy, the retailing trade has enjoyed phenomenal growth and there are no foreseeable signs of any 3James C. Worthy, "The Next Ten Years in Retailing", Cha 1 Patterns in Retaili , ed. by J. W. Wingate and Arnold Corbin, Homewood, Illinois, 19565, p. E “Arno Johnson, "Keeping Up With Tomorrow's Market", Management Review, Vol. XLV No. 2 (March, 1956), p. 182. 5Editors of Fortune, ed., The Changing American Market, (Garden City, New York, 1955), p. 13. serious decline in the near future. The preliminary estimates for 1956 forecast another vigorous business year for retailing. With unemploy- ment at a low figure (2.5 million unemployed compared to the 65 million employed in 1955) and the high family income, retail sales are expected to be in the neighborhood of $195 billion in 1956. This $195 billion business is 5 percent higher than the $186 billion record of 1955. At present retail sales have surpassed previous expectation. The following shows the growth of retail sales increasing propor- tionately more than the United States population.6 Year Population (millions) Retail Sales (million) 1939 130.9 $ #2,0#2 l9u6 1u1.3 102,u88 1955 165.2 185,61u 1956(estimate) 167.7 195,000 Though the family income is increasing, the number of people depend- ing on this income is also increasing. There is a proportionate increase in the number of non-workers, such as, children and old people making a larger family unit. To the retailer this means that more money will be spent on necessary items such as food, clothing, housing, and medicine.7 Consumers, because of the increase in population, family size and standard of living, will catribute to a I+0 percent increase in physical volume of retail sales in the next ten years. To meet this increase, larger capital investments will be needed to adequately supply the 6"The Trend of Business", Dun's Review and Modern Industgy, V01. 27 NO. 2, (February, 1956), p. 27. 7Editors of Fortune, ed. loc. cit., p. 229. consumer needs. The number of employees in retailing will have to increase to 11 million by 1965 which is an approximate increase of 2 million from the 1955 figures. Today's retailer, in order to remain competitive, will have to improve his methods of distribution in order to stay in a favorable competitive market situation. The inefficient retailer with out-moded methods and equipment will go out of business unless he improves his organization. The retail market is shifting to a buyer's market rather than a seller's market.8 The Food Industry What does the increase in population, family size, standard of living, and production capacities mean to the food industry? The answer to this question could be summed up by saying that expansion is a must. The population as a whole will demand greater quantities of improved food products. For a further analysis of what has happened and will happen to the food industry, let us consider: Food Consumption. Retail food prices on the average are a little lower than they were last year and, Judging from the standpoint of available supplies and agricultural crop prices, they should continue at about the present level fer the foreseeable future. In 19%” the consumer spent roughly 21 percent of disppmble income for food. Today the equivalent amount of food can be purchased for about 19 percent. 8James C. Worthy, "The Next Ten Years in Retailing", 32; cit., p. 8. Actually 25 percent of Adlspoaiue. income is now being spent. For this 25 percent, consumers are obtaining more food, better food, and food that contains many additional built-in "kitchen-ready and maid services" 9 which save housewives hours of work. Produgt_Changes. Net too many years ago, the typical grocery store was a cluttered and rather dingy place which offered less than 1,000 different items. Today's markets carry anywhere from u,000 to 7,000 items depending on the size of the store. One-third of these items were non-existent ten years ago; and another third are now in a different form, new style, new package, new usage, etc. The food industry now provides the consumers with a myriad of excellent, new and improved products. Cake mixes; soluble beverages (powdered soft drinks); instant coffee and desserts; dehydrated foods; frozen soups, pies, and complete dinners; dietetic foods, and baby foods, are now found on the grocery shelves. "Convenience" foods have become the standard. To the 12 million married women working in fulletime Jobs, these new products mean that time can be saved. Instead of spending five and one—half hours in the kitchen preparing the three daily meals, the housewife can do it in one and one half hours which means she has four hours of free time to do other things. There is almost as much difference between the 19H“ housewife's market basket and the present-day one as there is between the 1955 automobile and the one driven in 19%“, or as between the iguu experi- 9Grocery Manufacturers of America, Inc., Bulletin #2021: News From The G.M.A., (October 3, 1955), p. 1. mental model television set with its six inch screen and today's elaborate Zu-inch screen model. At least one—third of today's grocery department sales are items that did not exist ten years ago or were available in token quantities. Adding these new items with the changed and improved products, we find that two-thirds of the grocery volume is attributed to items which were new and different from those of ten 10 years ago. Sales Volume. Paul S. Willis, President of the Grocery Manu- facturers of American, predicts that the nation's food industry can achieve sales increases of nearly 25 percent by 1960 and almost 50 percent by 1965. In 1939, the food industry's volume was $16 billion; in lgun, $31 billion, and in 1955 it has grown to $68 billion. In total, food sales are up almost $35 billion in the past 10 years. Estimates show that sales of food products will increase $30 billion in the next 10 years if there is no change in price level. By 1960 sales are predicted to increase $17 billion. The 1965 estimates foresee food sales of $96 billion.11 Chain Store Super Markets Now that we have seen the great potential ahead in the entire food industry, let us look more specifically at what is happening to the chain super markets. No longer can a man rent an old garage, and with 10Paul S. Willis, "The Economy of Free Enterprise", Address before the Women's National Republican Club, Inc., New York, (March 27, 1956). 11Grocery Manufacturers of America, Inc., Bulletin #2032: News frgm the G.M.A. Newsroom, (October n, 1955), p. 1. a few thousand dollars go into the business. Today, chains have stores with gross annual sales of over 5 million. The cost of opening stores has Jumped to a minimum of $250,000 and ranging as high as $1,000,000. Results of a survey by the National Association of Food Chains showed that 100 food chain stores were opened in l9fl0. Today, only 23 are operating without major remodeling and 26 have been abandoned. Reasons for store abandonment or remodeling, in order of frequency mentioned by members answering the survey were: (1) lack of store space; (2) building or equipment obsolescence; (3) population changes; (A) new competition. Other leSs important reasons included hazardous auto traffic which made it difficult for customers to get in and out of the parking area, undesirable lease terms, and need for additional stocking area.12 From this survey, it can be seen that changes and expansion are occuring, making past facilities obsolete. A super market built in the nineteen forties will not compare with the mammoth markets being built today. The chains are not only capitalizing on the growth in the food sales, but are branching out into other fields. Non-food merchandise such as health and beauty aids, china, soft goods, housewares, hardwares, nursery stock, razors, and in even rare cases, heavy appliances can be found in the super market. 12"Record Turn Out at the 22nd. N.A.F.C. Convention", Chain Store Age, Vol. 31 No. 12 (December, 1955), p. #7. A survey by Super Market Merchandising in 195A brought out many observations. First, it showed that sales from non-foods in general averaged 11.9 percent of total sales. Non-food sales in 1950 totaled between $700 million and $1 billion and increased to $1.9 billion by 1953. A 90 percent increase was shown within three years.13 Non-food sales are still growing in volume as new lines and items are being added. The Grand Union Company, East Paterson, New Jersey recently announced to the public that it is building a 20,000 square foot addition to one of its stores to sell only non-food items. This new addition will handle inexpensive women's and children's clothing, cameras, costume Jewelry, fishing rods, toasters, out door lawn furniture, and many other items. Mr. Lansing P. Shield, President of the Grand Union Company, predicts that in five years, every super market will be a small department store.1u Two chains, namely, Food Fair Stores of Philadelphia, and The Grand Union Company, have established partly owned subsidiarks to build shop- ping centers. This is an example of further expansion into fields other than the food business. Food chains from the beginning in the 1930's have been circumventing the grocery wholesaler by buying direct from the manufacturer, and doing their own warehousing and transporting. This circumventing process is being extended to the new lines of non-food merchandise. Most non-food items were introduced to the chain by rack Jobbers, but as the line of 13w. n. Zimmerman, The Super Market, (New York, 1955), p. 2116. Wine super Market", Time, Vol. va11 No. 21 (May 21. 1956). p. 99. merchandise is proving itself profitable, the chains are absorbing the wholesaling'function.15 Sales Increase and Expansion. Taking a look at how sales have increased for food chains in March,l956, with 80 chains representing 13,606 stores reporting to Chain Store Age, the national sales increase was 9.1 percent over March, 1955. This comparison of March's sales figure is typical for the year.16 Looking more specifically at what particular chains have accom- plished in 1955 and what they intend to do in 1956: For the first quarter ending March 31, 1956, ACF-Wrigley sales were up. The exact increase is not known because of the company's acquisition of other smaller chains with fiscal years ending on dif- ferent dates. In 1956 ACE-Wrigley, Detroit, Michigan, plans to open #0 new markets averaging $2.5 million per store. The average per store annual sales for the entire chain is $1.8 million and its management anticipates a further increase in the future. (The national per store sales average is under one million dollars.)17 J. Weingarten's annual report shows that their net earnings were up 39 percent over 1954. The increase in sales was $8,375,317 over 1954 which brought this figure to $77,975,730--a new high.18 15M. u. Zimmerman, loc. cit., p. 241. 16"Regional Sales Report For March 1956" 99910 Store ASE: V01 32 NO. 5 (May, 1956), p. 100. 17News item in Supermarket News, May 21, 1956, p. 26. 18nAnnu,1 Reports", Chain Store Age, Vol 31 No. 12 (December. 1955). p. 9. 10 Safeway Stores sales hit a record high of 1.9 billion dollars in 1955. Their domestic store sales rose 6.2 percent to $1,738,889,565, while Safeway's Canadian units sales rose 10 percent to $17u,037,798 during 1955. In the next three years they anticipate the building of 235 new units.19 Stop and Shop's annual sales for the fiscal year ending July 31, 1955, were the highest in the chain's history. Sales of the New England chain for the 52-week period were $82,930,337--a 5.98 percent boost over the previous year's total of $79,651,017. For the 1956 fiscal year, the company plans on opening twelve new units bringing their total number of stores to 99.20 Food Fair Stores, Philadelphia, reports a 15.8 percent rise in sales with a 2n.8 percent increase in net income for a 28-week period ending December 12, 1955. Fifty-five additional units are planned for the fiscal year 1956.21 The Grand union Company, New Jersey for 1955 reached an all-time high of $283,003,166 in sales representing an increase of 29 percent over the fiscal year 195%. Net earnings also hit a new high with a rise of 2h.8 percent over 195“. They plan on opening #6 new units in 1956 which will substantially increase their sales volume. 19Ib1d., p. 7. 20"Annual Reports", Chain Store Age, Vol. 31 No.12 (December, 1955). P- 9- 21"Sa1es Reports", Chain Store Age, Vol 32 NO. 1 (January, 1956, p. 7. 22The Grand Union Company, Annual Report to Stockholders: 1955. (April, 195e). 11 Conclusions The food industry as a whole is likely to enjoy prosperous years in the future. The population of the United States:flst every indication of increasing. People today are buying more expensive food products with the "built-in" services, new products or product forms and uses are constantly coming into being, replacing older products. To meet the splurge of new products, super markets have grown large in size. In addition to selling food products,the super markets have branched out into the non-foods field. The addition of new product lines has made it easier for the housewife to complete her shopping chore under one roof--one stop shopping. Individual chains are rapidly expanding with the industry. The weaker and poorly managed chains are being absorbed by the prosperous ones. Sales for 1955, as reported by most companies, were greater than ever before in their histories. Looking to the future, many chains are planning to build more units than ever. New super markets will add anywhere from $1.5 million to $5. million per year to annual sales. CHAPTER II FOOD DISTRIBUTION'S NEED FOR EXECUTIVES During the past 100 years there has been a tendency toward separa- tion of ownership and management. The large corporations of today with the multiplicity of stockholders and the complex operational problems require an increasing number of professional or career managers who in some cases own very little of the firms. These managers are "trustees" of other peOple's capital with a responsibility to serve the interest of the employees and public as well as the stockholders. The complex organization of today demands that management be cog- nizant of technical innovations in order to operate successfully. Technology has in the past and will continue to make possible much greater production with fewer people in order to attain the standard of living desired by the American peeple The output per worker is expected to climb 43 percent by 1960, com- pared with a 21 percent gain between 1940 and 1950. This assumes a 1960 population of 170 million with a working roree of 66 million. To keep up with the great expansion demands in the economy, business leaders will have to achieve the capacity and ability to formulate and apply a philosophy of management that visualizes and embraces: "A. A managerial or administrative point of view which prop- erly integrates the processes of technological innovation, production, distribution, financing, and human utilization to achieve socially desirable profit and service objectives in a private enterprise economy. 13 B. Essential proficiencies in the functions of creative planning, organizing, and controlling the activities of complex and decentralized forms of business organization. C. An intelligent understanding of the fundamentals of human motivation and education as a basis for human relations in production, human reactions in distribution or marketing, and community relations for human happiness. D. Competency in communication to effect understanding among employees, shareholders, and the public (domestic and foreign) about the objectives, policies, processes, and organizational relationships of a business organization. E. An understanding of the impact of the technology of production and distribution on increased productivity, standards of living, employment and human satisfactions. P. Realization of the relationships between specialization and generalization in education for business leadership and the performance of business functions. Both general specialists and specialized generalists to provide leader- ship for our 1970 economy may be needed. 0. The ability to provide an increasing utilization of human effort for suitable human work by providing increasing relief from routine physical work by the proper use of indirect energy. There will be greater use of employees in work which requires intelligence and education."23 Bigness Has Responsibilities One of the most important post war trends in retailing is toward bigness through mergers and intensive expansion programs. Professional management in corporations increasingly accept the concept that the business corporation is developing into quasi-public institutions. Corporate managers today accept.as part of their Jobs, community and national responsibilities. 23John F. Mee, "The Impact of Economic Evolution on Education Requirements", Bulletin #23: The Collegefgraduate in the American Economy, 1970, (Chiversity of Indiana, 1955), pT—42. 14 Many individuals believe that bigness in itself in not bad but the power enhanced by bigness can be abused, seriously hindering the small business or the whole economy. In decision making, business leaders have to consider not only their companies, but the small competitor, the community, and the various governmental agencies.2u Corporate managers today have to be more public minded in their operations because of their relationships with the Security and Exchange ConInission, the Federal Trade Commission, the Food and Drug Administration, the Department of Justice, Congressional investigations, and the Department of Internal Revenue as examples. Neither the public nor the government can be ignored. In modern management philosophy, the profit motive is no longer supreme among business managers. The service objective along with the social responsibilities occupies a place of comparable importance with the profit objective, at least in 2 the short run, in the management philosophies of business managers. 5 Great Man Hunt American industry is on the greatest man hunt in its history. It is hunting for executives to fill top jobs today and to fill those that will become vacant in future years. Seldom has there been a greater opportunity for able men, not only to get good jobs, but to move ahead fast. The chief reason is that industry, which has just about doubled in size during the great post war booms, needs far more bosses than they 2“Gordon Cross, "The Responsibility of Bigness", Journalggf Retailing, Vol. XXXI Nb. 3 (Fall, 1955), p. 115. 25John F. Mee, 9_p_._ cit., p. uz. 15 have time to train. The corporations having solved to a large extent the mechanical problems of mass production, are finding it harder to learn the things they must know to mass-produce the executives they direly need.26 In a survey of 3,000 middle management executives representing all business fields, it was found that only one-third were presently qualified for advancement. The same survey revealed that 42 percent of the top management group were of the age bracket between 55 and 65, and should be retiring within the next ten years.27 In addition, consider- ing the normal deaths, disabilities, turnover, and the five percent annual growth pattern existing at present in American business, the conclusion is that there is an extreme need for executive talents. Contrary to past practices, when specialists were sought, companies today are generally seeking men with wide, overall interests, especially men who have demonstrated qualities of leadership and ability to get along with people. According to a survey of the American Management Association, 30 percent of the 500 leading corporations have an executive development program.2800mpanies are taking promisingfiyoung men and putting them through a systematic program to develop the brightest of them into executives. These men are shifted from department to department to get the broadest possible view of the entire operation 26Editors of Time, "The Great Man Hunt", New Directions in U. S. Business, (1955), p. 4. 27C. Wilson Randle, "How to Identify Promotable Executives," flarvard Business Review, Vol. 34 No. 3 (May-June, 1956), p. 122. 28Robert K. Stolz, "Is Executive Deve10pment Coming of Age?" Journal of Business, Vol. XXVIII No. 1 (January, 1956), p. 48. l6 and to keep from getting in a rut that is frequently the penalty of over-specialization. Such programs are being created in an attempt to establish a "second team" management group that can take over when some- thing happens to the top echelons. A company finds it quite frustrating to shake a good idea or delay the launching of an ambitious and well-designed plan for expansion becailse’rio executive talent is available. One of the serious problems in expansion is finding executives with the diversified ability that is needed for the varied and extensive operation. Executive talent is not a commodity one can find in profusion on the Open market. In most instances, it is necessary to hire young men who have the ability to be developed into future executives.29 Today with the American market becoming increasingly competitive, more competency and skill is needed in corporation management. The increasing cost of equipment, brought about by automation which has resulted in mass distribution of products, has increased financial risk. The demands on management have become bigger and more complicated and the necessity for making the right decision has become extremely impor- tant. Present-day management is concerned with 10 or 15 year planning. This future planning is lenghthening the time span between economic decisions and their application; again, making the decision-making process more complicated. The necessity of developing executives today 29Nathaniel Stewart, "Building Tomorrow's Management", Dun's Review and Modern Industry, V01. 27 No. 1 (January, 1956), p. 40. 17 that will adjust and complete tomorrow's plans is a very important factor. Only if tomorrow's management has the ability to fulfill such plans can they be worthwhile and effective.30 Quantitative Need Besides the factors noted previously, the low birth rates during the depression years have seriously contributed to the shortage of potential executives. The "depression babies" are now of the age to be entering the lower levels of management as an initial step toward top executive positions of tomorrow. It will take more than ten years before the "war babies" will be of age to help alleviate the present shortage. The unexpected and unprecedented growth of business after the war and continuing to the present, increased the number of executive posi- tions available to young men. From 1940 to 1954, management jobs increased 67 percent while total working force increased 35 percent and the population increased 22 percent.31 During the war many retirements were postponed which resulted in a surge of retirements after the war. The post-war period saw many young men rise to top management positions leaving a serious gap in the middle management group. Today this gap still exists because of the shortage of executive man power in comparison to business expansion. 30Peter F. Drucker, "The Management Horizon", Journal of Business, V01. XXVIII NO. 7 (July, 1955), p. 155. 31Robert K. Stolz, op; cit., p. 48. 18 Eighty percent of the American male youths are rendering two or three years of service to the military. This period of service has lengthened the time between school completion and the industrial employment. A further potential shortage could exist because of the number of men in the lower management group who are subject to recall to military service. Food Distribution Industry's Need for Executives The food distribution industry is no different than other large scale industry, in fact, it is the largest business in the nation. It serves 165 million Americans who annually spend more than 35 billion dollars in food.32 There are over one-half million food retailers throughout the country, and 53 percent of the business is done by approximately 21,500 super markets. The large food chains have need for technical and non-technical employees such as accountants, engineers, lawyers, buyers, merchandisers, personnel administrators, and public relations people to name only a few. The food industry like all other industries, is suffering from lack of executive talent. Store Managers as Executives Recently the editors of Fortune asked leading businessmen what in their opinion constituted an executive. In the survey, the following 32Michigan State Placement Service, Bulletin: Your Future in Food Distribution, Michigan State University, East Lansing, Michigan. 19 was found: An executive is a person who is paid for a full-time job which-- 1. Directly helps to fulfill his company's objectives and overall policy. 2. Is required to make or approve decisions that significantly affect profits and future plans. 3. Coordinates several major divisions or departments of corporation functions. 4. Maintains and develops an organization of trained sub- ordinates to achieve the company's objectives. 5. Delegates responsibility and authority to the organization, iggeioggrgigepsigig:a9§e and results through at least one By the above definition, a store manager of a modern-day super market is an executive. He has direct authority over anywhere from 25 to 150 employees and in some cases is responsible for more than 5 million dollars in annual sales;, The duty of a store manager is to contribute to the fulfillment of the company's objectives by seeing that the policies set forth by the company are adhered to by all employees. Super markets operate on a very close margin of profit which means that the operation has to be closely controlled in order to be successful. At the store level the manager has to see that the inventories, supplies, labor and profit ratios, and cash are constantly controlled. In most chain stores there are three main departments of merchan- dise--produce, meats and groceries. Each department is further sub- divided; such as, the bakery, housewares, health and beauty aids, and 33Perrin Stryker, "Who is an Executive", Management Review, “Vol. XLV No. 2 (February, 1956), p. 74. 20 canned goods under the general category of groceries. The store manager's job is to coordinate the efforts of these various departments in proportion to their contribution to overall store sales and profit. Like all executives, a store manager is concerned with the con- stant training of subordinates. His duty is to see that promising young employees obtain well-rounded experiences in all departments to equip them for future promotions to managerial positions. Companies today are expanding,but without trained men expansion can be limited. The large number of persons employed in some super markets make direct supervision of every operation practically impossible for one man. To alleviate this problem, the store manager delegates authority to the various department heads who are held responsible for the operations of their particular part of the total store operations. Many companies consider the store manageras an overall supervisor of the entire store with the department heads aiding in controlling the operations.__ The author, by comparing the definition of an executive with the position of a store manager, has attempted to establish the fact that a manager is an executive. Above the store management level there are many positions similar to those in most large corporations. 8 As the stores grow larger in size, the top managements of the chains realize the increasing importance of the position of the store manager. Safeway Stores, for instance, in a recent effort to stream- line their organization in order to maximize profits have given more authority over pricing, merchandising, advertising stock arrangement 21 and brand handling to the store management.3u With the realization in mind that the food industry is growing and that the position of the store manager is becoming increasingly important, the industry no longer needs managers to act as clerks, but managers who are capable of handling the large subordinate working force and are able to cope with the many merchandising and financial problems that face them. In short, executives are needed, not "head clerks". Conclusion United States business Jun; expanded in excess of the supply of executive talent. The shortage of executives is due to the increase in the number of executive positions which demand more diversified knowledge by the persons filling them. The low birth rate during the depression years partly attributed to today's quantitative shortage of young men with executive talent. Food chains have grown in size and complexity,and like the rest of American business, are suffering from a shortage of executives. A manager of a modern-day super market has a responsible position and can be considered an executive. With executive positions in today's super market chains extending down to the store management level, the need for executives has been amplified in this industry. 3uGrocery Manufacturers of America, Inc., Special Bulletin from the President, No. 2068 (May 3, 1956), p. 2. CHAPTER III COLLEGE RECRUITMENT The previous chapters established that the food distribution industry is growing at a fast pace and that there is a’substantial need for executives; the next step is to consider the labor market for future executives. In recent years, top management in business have agreed that colleges and universities are good recruiting grounds for future executives. As a whole, the educational level of the population has risen. There are 90 percent more persons with a high school education and 20 percent more with one to three years of high school than there were in 1940. The number of college graduates has increased 40 percent since 1947. With the increase in the educational level, the standard of living of the people has increased. Workers are demanding more salary than ever to pay for the finer things in life of which they have become aware.35 With the higher educational level of the population as a whole, those persons who want to get ahead in the business world are spending more years in school. A high school education is negligible when considering the increased number of college graduates. The complexity of today's 35This Week Magazine, Sixth Biannual Grocery StugL (United Newspapers Magazine, Corp., 1955}: p. 10. 23 business organization is one of the reasons why young men are spending more time in school preparing for their careers. The number of college graduates has greatly increased in the last ten years,but not at a pace rapid enough to meet the needs of industry. Both college students and business leaders are aware of this fact. As a consequence, the students are now in good bargaining positions. No longer do college graduates have to pound the pavements for weeks and months looking for a job as was done in the nineteen thirties. The companies are coming in droves to the campuses throughout the nation in a search for future executives. Dr. Frank Slhzdicott, Northwestern University's Placement Director, conducted a survey of 108 companies in all fields. The companies reported to have a 30 percent increase in their recruitment quotas this 1 year over 1955?6 Companies are demanding more college graduates, while the number of graduates have not increased enough to satisfy the demands of business. In 1956 approximately 20,000 men will graduate from the various colleges and universities throughout the country.37 This number is no higher than it has been in recent years and is less than the post- war peak graduations. Not all the men graduating this year will go immediately into business, many of them will first have to fulfill their military obligations by participating in active duty for two or three ' 36Stephen Habbe, "College Recruitment in 1956", Management Record, Vol. XVII No. 1 (January, 1956), p. 6. 37Herrymon Maures, "Twenty Minutes to a Career", Fortune, Vol. LIII (March, 1956), p. 112. 24 years. The annual crop of graduates is expected to remain low until the mid-nineteen sixties when the large number of post-war births will be of college age . Today, college graduates are in great demand in industry. The high salaries being offered are significant that there is a premium on college graduates in business. Some companies are offering starting salaries to college graduates with no experience which are even greater than the present salaries of men who started working in the same position as the college graduate and have been working for the companies for a few years. Historically, college graduates' starting salaries edged up much slower than earnings of factory workers. In the last eight years, the starting salaries for college graduates leaped ahead 60 percent compared to the 50 percent rise in the factory wages. Recruiting Picture Throughout the Country The following information was compiled by the various college placement bureaus throughout the country: University of Michigan, School of Business: In 1955, the number of interviewing companies rose from 81 to 129. The number of students interviewed rose from 1,482 to 2,070. There has been an increase of 50 percent in 1955 over the previous year in the number of students being interviewed on campus. The median salaries were $350 per month for tudents with a B.B.A. cbgree and $385 for students with a M.B.A. degree. ne ty percent of the students were offered jobs either in accounting 25 or as management trainees .38 Northwestern University: The number of interviewing companies and students being interviewed has increased approximately 30 percent in the past years. The following table shows how the monthly salaries being offered have increased for graduates with no technical degrees. me of Position 1956 1955 191:7 Accountants $352* $339 $231 Salesmen 358 339 225 General Business 3li8 337 223 *monthly sa la rie s The above salaries were the averages offered in November of each respective year. The 1956 salaries are expected to increase $10 to 10 percent by the time of graduation. Georgia Tech: The number of graduates decreased from 1,501 in 1950 to 9## in 1955. At the same time, the number of interviews on and off campus have increased from 24,000 to 1L2,000. The 1950 graduate had an average of 16 interviews,while the 1955 graduate had an average of “.140 University of Illinois: Over 1,000 companies, 500 of which are engineering firms are expected to interview students on campus during the 1955-56 school year. Additional hundreds of companies have appli- cation blanks filed with the placement office. Starting salaries are up 38Robert B. Vokac, "The 1955 College Graduate Employment Picture", Fchigan Business Review, Vol. VII No. 6 (November, 1955), p. 29. 3'9"'1‘wen‘l:y Minutes to a Career". 92; 6117-. Po 117- ”OIbid., p. 117. 26 generally $25 per month over last year. Liberal arts majors with no special business training can obtain positions with salaries between The demand for business majors {our and five thousand dollars per year. Twenty to thirty com— is great, accountants being in greatest demand. panics are conducting interviews daily and over the course of the year 41 some 20,000 interviews will be conducted. A total of “,287 students were inter- Michigan State University: viewed by employers at the placement bureau during the winter term Business which was a 23.5 percent increase over the same term in 1955. and industry interviews numbered 3,969, compared with the 2,889 in the winter of 1956. General Business interviews doubled in the past year. The Placement Bureau arranged for 3146 representatives from business, This is a 3” percent increase in the number industry, and education . '42 of interviewing companies. The above statistics furnished by the placement bureaus of the collegesare quite typical of what is happening in colleges throughout The prospects for the American college graduate in 1956 the nation. High pay is available now for nearly everyone are unbelievably good. who can, and wants to get started in industry. This new trend toward higher salaries is evidently due to the fact hat business, aware of its own increasing complexity-~technological and ”1"Jobs for the Graduates Plentiful, Pay Rising", U. 3. News and id Reports, (March 9, 1956), p. 96. uzflews item in the Michigan State News, May 22, 1956, p. 1. 27 otherwise--looks more and more to the colleges and universities for the talents needed to perpetuate and expand. Already a large majority of the successful executives in business are college graduates. Students' Attitudes The students of today realize the great shortage of college graduates and the ever-increasing recruitment quotas of the various companies. College seniors are "Job shopping". Students are being interviewed by as many companies as possible in the fields they think are of interest to them. After evaluating the offers of the various companies, they are making their decisions. With the starting salaries sky rocketing and the multitude of interviews being conducted on campus, it would seem that the student would be making his decisiOn primarily based on what company offers the highest starting salary. ,Most surveys conducted on why college seniors choose a position, list starting salary as only a negligible factor. ’ Dr. Edward Brand, Director of the Food Distribution Curriculum at Michigan State University, conducted a survey of some 1,000 Business .Administration students. The students were asked to list the reasons ‘why they would select a particular career. The reasons, in the order of their importance, that were given by the students are shown as follows :1‘3 Interesting work Ability and training qualify them for the work Advancement opportunities coupled with an organized training program . Pay Good working conditions U14: UNI-4 ”Dr. Edward Brand, "11.3.0. Career Survey", (unpublished, Michigan State University, Winter Term, 1956), p. 2. 28 A similar survey was conducted by the Opinion Research Corporation of Princeton, New Jersey. Students were asked to identify the most important factors in choosing a Job.“ Chance for advancement was an important factor for 93 percent of the students. Eighty-two percent of the students listed interesting work as a factor. Near the bottom of the list are starting salaries (23 percent) and benefits (17 percent).:: The author is of the opinion that the above surveys indicate the attitude of the college students all over the United States. Interest- ing work coupled with the possibilities for advancement are what the students are considering when choosing their future employers. Although salary does not seem to be one of the major factors, it cannot be overlooked. The students are insisting “on at least the "going rate" of salary, before they even consider taking a position. :inform.the groups of the vastness of food distribution operations and the career opportunities. Having the speakers on hand is only part of the Job, the important part is to let the various groups know that 62 the speakers are available upon request. The first few speakers will be difficult to place. Good performance by the first speakers will make placement of subsequent speakers comparatively easier. Perhaps, the first few groups addressed could be ones with which some members of the firm are socially associated. The subjects discussed by the speaker sould be presented to educate the group, not sell them on the industry or a particular firm. The speakers should be selected by the branch or home office management depending on the speaker's qualifications and the group to be addressed. Before sending speakers out to act as representatives of a firm, they should be trained in the art of public speaking. The public is going to Judge an organization by the persons who represent it. If the speakers are not properly trained, more harm than good can be done and the purpose set out to be accomplished will be defeated. Some companies have found it wise to employ an educator skilled in commmnication arts to work with the speakers in the preparation of speeches and the various techniques used in presentations. The Weirton Steel Company of Weirton, West Virginia, for example, iermed a speaker's bureau which trained speakers and sent them out at the Inxblic's request to tell about the company and the operations of a steel mill. The reasons why the Weirton Steel Company started the speaker's bureau was to answer the request of various groups for guest speakers and to clear up misconceptions about steel companies' operations. Tine public had many misconceptions about steel companies' profits, reordcing conditions, wages, safety, labor situations, etc. The area of'loperation for the speaker's bureau was limited the first year to a 63 unity-mile radius of the plant, but later extended the area to a fifty—mile radius. Each speaker was an executive of the company, and was assigned a topic based on his interests and past experiences. For any out-of-pocket costs, the speaker was reimbursed. During the first year of operation of the speaker's bureau, 18 speakers addressed over 1,000 people. Many more people were reached before and after the speeches by local publicity. A follow-up news release containing a review of the speeches was sent to the newspapers and occasionally a local radio station would broadcast a speech. To illustrate the success, Weirton Steel Company had with the bureau, here is a quote from a person who had Just listened to one of the "Listening to your talk has given me a new slant on the steel industry. Thank you for coming."66 speakers: The type of speaker's bureau established by the Weirton Steel Company could easily be adapted to a food distribution company. The problem, to clear up the misconceptions of the public, is the same in bcflfii industries. Within the large chains today, there are men who are acting as guest speakers, but the author believes that more attention should be paid to this area because it is a beneficial way of reaching the general public. Motion Picture Film :Some industries have found a motion picture film useful in illus- trertiJug to the public the details of their operations. Food is a 66Richard N. Paull, "Thanks for Telling Me About You", American Business, (April, 1956), p. 18, w commodity that everybody uses, but yet few persons know exactly what happens to produce between the time it leaves the farm and the time it is displayed on the shelves of the super market. A film is a good visual aid that could be used to show the public how products are hendled between farm and grocery store. Such a film would enlighten the public on the operations behind the modern-day super market. The author, at this point, will present his version of what a film on food distribution should include. The opening scene is a guest speaker addressing a local social gathering. The speaker is thanking the group for the privilege of being there and is explaining that at their request a film will be shown about the operations involved in food distribution. With the speaker acting as a narrator for the entire film, the cameras begin to roll. In the opening scenes, the planting, growing, and harvesting of produce is shown followed by the operations at a food processing and cannery until the produce is packed in cartons ready for shipment. At this point there is a switch to the buying offices of a large food distribution chain. The scene shows a salesman presenting the products to the buyer for his approval and is followed by a scene in the quality controlled kitchens of the chain where the product is being tested and compared before being purchased. Throughout these scenes the narrator is explaining how such operations help assure the customer of, only quality merchandise. The test completed with the produce showing high quality, the buyer accepts the product for sale in the reta i 1 outlets . The next series of scenes show the products being transported to the chains' distribution center and being unloaded with the most modern materials handling methods. The scene then switches to the home of the manager as he is leaving for work in the morning. The manager's home, business-like dress and automobile reflect the financial standing of the manager to be high. The next scene shows the manager entering the store and greeting his employees as they arrive. A meeting to plan the day's work is the following scene with the manager directing his subordinates on what is to be accomplished. The film goes on showing the dispersing of the meeting and one of the employees making out an order form for products to be delivered from the distribution center. Upon the completion of the order, it is approved by the manager and mailed to the office for processing through electronic equipment which records the order and prepares the delivery invoice. The film follows the order from the store to the office for processing and to the distribution center where the cases are selected for shipment to the store. The narrator is continually explaining what is happening as the film is shown. Upon completion of the order selectin in the distribution center, the cases are shown being loaded on the trucks and delivered to the stores where, once again, the most modern materials handling equipment is used to unload and store the cases. The final scenes at the store show the invoice being checked by the manager and the cases being marked and sent out on the sales area for stocking on the shelves. After the closing scenes of the store, the camera once again reverts back to the guest speaker who continues to describe the position of the store manager, who sees that the proper merchandise is available 66 to meet customers' demands. He also briefly explains to the audience that the film only showed a small part of the operations in food distribution and goes on to point out other phases such as personnel, food processing (dairy and bakery goods, etc.) real estate, construction, etc. A film such as presented above, will help to give the public a better insight into the operations of a food chain. An individual food chain could sponsor such a film, but since it could be used by all firms in the industry, an organization like the National Association of Food Chains would most probably be a better sponsor. Any social, political, or education group would serve as an audience. Press Releases Publicity, one of the basic tools of public relations, is a means of communications to inform.the public about corporation policies and acts in order to gain public understanding and goodwill. Press publicity is not synonymous with the terms propaganda, advertising or promotion, eacfll of which involves different methods of disseminating information to enlist the support of the public.67 When something "newsy" happens 11121 firm, the press release will serve as a means of informing the public. The appointment of an employee to a political or social office is "runway“ and a press release will show the public that members of firms in the food distribution industrymre giving their share to help the conmnnnity prosper. The press release can be used to inform the public of open houses or guest speakers at local meetings. The more the 67Bertrand R. Canfield, Public Relations, (Homewood, Illinois), 195”. p. 365- 67 public is reminded of the fact in): employees in food distribution are "good citizens", the more prestige will be given to the various jubs. The citizenship program sponsored by the National Association of Food Chains, which awards citizenship certificates every year to chain employees for their outstanding community activities, has been given much publicity and is a good example of an effort to build prestige for the entire industry. New store openings are of news value to the public. Many persons are interested in where the new stores are located and what lines of merchandise (non-foods, soft goods, frozen meats) are handled. A press release is a valuable tool to acquaint the public with a new manager of a store. Robert Hall Clothiers has a picture and history of a new manager placed in local newspapers in order to establish the manager's status in the community.68 Honest, accurate publicity gives the reading and thinking public a true picture of a firm which is extremely valuable economically and socially. Confidence and loyalty in a company is built up in the minds of the public. Company advertising is supplemented by publicity which keeps the company name in the public eye. Summary Gaining the favorable attitude of the public toward the food