Introduction to Juravich Strategic Corporate Research Piece
We are very pleased to present this article on Conducting Strategic Corporate Research written and generously shared by Tom Juravich. Tom Juravich is a professor of Labor Studies at the University of Massachusetts Amherst. He is also the director of the UMass Amherst Labor Relations and Research Center, and director of the LRRC's Union Leadership and Administration program. We also acknowledge the thoughtful translation assistance provided by Professor Song of Capital University of Business and Economics, Beijing as well as the translation work of ALR staffer Ruting Chen.
Our hope is that union leaders and activists will benefit from the guided 24-question approach to Strategic Corporate Research in their work representing workers in collective bargaining.
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This site utilizes a 24-question model for conducting Strategic Corporate Research. First time users may wonder about the relevance of gathering information in all these areas. Below we walk through the basic 24 questions showing how the information in each of the areas may be relevant, and how unions have used this information in real campaigns.
01. BASIC INFORMATION
In beginning research on a specific firm it is important to ensure you have the correct name for your target firm. Check its location and webpage to confirm. It is also important to determine what kind of a company your target is. This is crucial in that the sources of information are different for different types of firms. For example, companies that trade stock on one of the exchanges are governed by the SEC in the U.S. and SEDAR in Canada and are required to disclose information regularly which provides important primary documents for corporate researchers. If it trades on one of the exchanges find out its stock ticker symbol, which you can use to streamline searching. Nonprofits in the U.S. and charities in Canada have very different reporting requirements and different kinds of information are available.
It is important to inventory the full range of products and services of the target firm. Your target company could be involved in much more than we may initially believe, especially with the trend towards constant mergers and acquisitions. To fully understand the nature of their operations it is important to ascertain their current areas of activity and which area is generating the most income for the firm. In their campaign to organize workers at TRICO Marine in the Gulf Coast, The Offshore Mariner’s Union discovered that the company’s most profitable segment was not in the Gulf but in the North Sea and shifted the focus of their campaign.
Compiling an inventory of the company’s facilities is central to understanding a firm’s operations. Coupled with an understanding of their products and services, it allows you to geographically map out their activities. It is crucial in developing a campaign to understand which facilities are responsible for which kinds of products/services. In what may be the first example of corporate research in the labor movement, in 1936 the UAW identified that GM was making body parts in only one plant in Flint, Michigan which became their strike target. If any public monies are involved in building or renovating facilities, it raises the public profile of the target firm considerably. What may have been an issue with a private company now becomes a public issue.
Who the target firm employs tells a great deal about their operation. Are most workers full-time or part-time? Knowing more about the demographics of the workforce will be central in identifying worker issues and developing a campaign. For example during the UPS strike in 1997, the Teamsters built a campaign around the large number of part-time workers.
05. FINANCIAL INFORMATION
Assessing the target firm’s finances is central to understanding the company. Without looking carefully at a company’s finances one can get a very wrong impression of its financial conditions by looking only at revenues or the value of its stock. Evaluating a company’s financial condition is also a prerequisite before considering a campaign to determine if the firm is financially sound enough to withstand an organizing drive, or if the firm has such deep pockets that organizing would be difficult. While corporate financial analysis may appear daunting for those who have no experience in this area, a basic understanding is quite possible in a relatively short period of time.
06. COMPANY HISTORY
To fully understand a firm, it is important to place it in a historical perspective. Is the firm the same today as it was at its founding, or has it morphed into an entirely new entity? Understanding recent events, such as mergers and acquisitions, helps us to make sense of what is happening in the firm today.
07. CORPORATE STRATEGY
In addition to understanding where a company has been, it is crucial to understand where it is heading. Understanding its growth strategy is imperative in understanding corporate decision-making, and may also be where a firm is most vulnerable. The Hotel workers (UNITE HERE) have been very successful in finding out where hotel firms are planning to grow, and intervening with local officials in the planning process.
In trying to understand how power flows in a firm, it is fundamental to learn as much as you can about management. Is top management new or are they the founders of the firm? What has happened to their compensation over the past several years? Does it mirror the economic performance of the firm? It is also important to discover if and how they are connected to other firms. In building a strategic campaign these connections and corporate interlocks may be very important in exerting pressure on the firm. Personal connections may be important as well. They may be a big supporter of their alma mater or the local opera, and these connections can also be important in bringing pressure to bear.
In a publicly traded company, large stockholders may be as or more powerful than management. While many stockholders are mutual funds and financial institutions it is not always the case. For example in the Teamster campaign against Republic Services, a major trash firm, they discovered that the Bill and Melinda Gates Foundation, was a major stockholder. Special attention should be given to retirement funds that hold stock as they may be important sources against the firm. With a growing concern about Corporate Social Responsibility, there has been growing shareholder activism around a number of campaigns. For example, in the wake of the bank bailout, there has been shareholder activism at Citibank, Barclays and others.
10. BOARD OF DIRECTORS
The Board of Directors is the governing body of the firm, and it is important to try to understand its dynamics. Individually board members also have other corporate identities, and it is vital to understand these corporate interlocks and what other kinds of pressure can be brought on the firm. In his seminal work at J.P. Stevens, Ray Rogers used pressure on board members who were also key corporate leaders at Avon and Manufactures Hanover.
In this time of private equity and leveraged buyouts, lenders may play very strong roles in a firm. For example, Blackstone, a major private equity firm, played a major role in the restricting of Hilton Hotels. If your target firm is highly leveraged (in debt), finding information on lenders is even more important.
12. PARENT COMPANY
If your target firm is owned by a larger parent company, it is often a game-changer. What you may initially think is a local or regional firm may in fact be part of a global firm. In many instances parent companies often have representatives on the Board of Directors. These global firms may be much more difficult to organize or bargain with. At the same time, being part of a larger parent may provide other opportunities. While working on their campaign to organize Brylane, UNITE discovered that the parent company also owned Gucci and shifted the focus of their campaign.
Researching subsidiaries provides you with further information on the operation and organization of your target company. They provide you with the overall shape and reach of the firm, which may extend far beyond what you originally thought.
It is impossible to understand your target firm without understanding it in the context of the larger industry in which it operates. There are a wide variety of industry publications on industries, small and large, and they can be important sources of information on the overall industry and the major firms within it.
For the same reason we need to understand the industry in which your firm operates, we need to identify their direct competitors. This identification of a peer group is important for comparison, as well as seeing where your target firm fits in terms of its competitors.
16. RAW MATERIALS/SUPPLIERS
Understanding the supply chain is fundamental in understanding company operations. Suppliers can be important targets in a strategic campaign. For example, the initial campaign by United Students Against Sweatshops (USAS) was based on the discovery that their expensive college apparel was being produced in sweatshops across the global south.
Raw materials and supplies (as well as products) need to leave supplier’s facilities and products or services need to be delivered to customers and clients. Understanding how they are delivered provides opportunities in a campaign.
Firms require utilities to create products and services. Understanding their use of utilities can be very important, especially when researching manufacturing firms. For example, in their campaign against Rio Tinto at an aluminum facility in Quebec, the Steelworkers discovered that the company was selling back electricity to the province during a lockout for $15 million a month. This became an important part of their campaign.
Identifying customers and clients is important when trying to understand how your target firm operates. Do they have many customers, or just a few? Are they highly identifiable clients such as Wal-Mart? In their campaign at Ravenswood, the Steelworks were able to prevent major beer and soft drink firms from using nonunion aluminum for the cans during their lockout.
20. SAFETY AND HEALTH
The safety and health record of a firm is an indication of their corporate responsibility. The information you gather will help you assess what kind of firm they are, and may be important in a public campaign. The deteriorating health and safety conditions in Bridgestone/Firestone’s facilities were a major part of the contract campaign by the Steelworkers.
A firm’s environmental record is another measure of their corporate responsibility. Environmental issues extend far beyond the workplace and many have a significant impact on the larger community. In their organizing campaign at hog giant Smithfield, the United Food and Commercial Workers (UFCW) identified massive environmental problems which it used to build a larger community campaign.
22. OTHER REGULATORY/LEGAL
Firms are often governed by a variety of regulatory agencies, depending on their business. In addition to investigating if they are in compliance with the law, many of these regulatory agencies gather a variety of information that may be useful to researchers. During the Ravenswood campaign, the Steelworker discovered that the company had let its permit to dump arsenic in the Ohio River expire.
It is also important to know the overall legal issues that your target firm is facing. These could be just routine legal matters, when someone falls in the parking lot. They could, however, be more significant issues such as employee discrimination or price fixing.
Firms are located in communities and their impact goes far beyond workers in their facilities. Here it is important to identify both support for, and opposition to, your target firm. Community allies are often fundamental in building comprehensive campaigns. In the strike by the Chicago teachers the support of parents and the larger community was a key element in their victory.
Management and the firms they work at are often involved in the political process. This includes both financial contributions and lobbying. Tracking them both provides very useful information on how they are involved in politics.
FROM RESEARCH TO CAMPAIGNS
At the end of the first-cut research it is easy to become overwhelmed with the amount of information you have gathered. The real question is what does it all mean? Now is the time to step back from the information itself and begin the process of summarizing and analyzing what you have gathered.
Summarize Your Research Findings
The Research Summary chart (click on thumbnail) provides a worksheet to begin this process. In each of the three levels – command and control, operational and outside stakeholders – you should identify your key findings. No matter how thorough you research, in some areas you will not have found significant information. For example, you may have not identified any key stockholders or safety and health problems, so that these issues would not move forward to the research summary.
Create a Strategic Summary
In addition to simply summarizing the information you have gathered, you need to look at this information through a strategic lens. The Strategic Summary Chart (click on thumbnail below) asks you to look at your findings in terms of:
- Broader concept ofDecision Makers
- Key Relationships/ Secondary Tragets
- Profit Centers
- Growth Plan
The charts on Traditional Bargaining Campaigns and Strategic Bargaining Campaign help to examine these concepts in greater detail. In a strategic campaign rather than just focusing on the CEO, it is important to explore a wider variety of decision-makers. It may be that a large stockholder or lender may in fact be more powerful that the CEO. Decision makers also need to maintain key relationship for their business to grow. This may include key customers, regulators, or lenders. As the charts also illustrate, a strategic bargaining campaign is much more targeted that a traditional campaign, not trying to pressure the firm as a whole, but focusing on a firm’s profit center and growth plan.
Design the Calendar
This strategic analysis and its focus on: decision makers, key relationships, profit centers and growth plan also help to lay the foundation for a strategic campaign. Based on examining a wide variety of campaigns, we know successful campaigns utilize:
- Multifaceted Approach
- Change Rules/Outflanking Power
- Unexpected/Unanticipated Action
- Bottom Up & Top Down Approach
- Reframe Meaning
The campaign calendar provides you with a way to use these concepts to shape out your campaign, month-by-month. For more information on campaigns see Beating Global Capital.
ASSESSING UNION CAPACITY
In the process of conducting strategic corporate research, we spend a huge amount of time learning a great deal about the strengths and weaknesses of an employer. Before launching a strategic campaign, it is important that we shine the same light on ourselves. Conducting a strategic campaign is a major undertaking and it is imperative that we assess our own capacity with the same critical eye we would use when evaluating any employer.
There are a number of methods for evaluating unions under the general rubric of strategic planning. David Weil has developed a general union assessment tool at The Strategic Choice Assessment Tool. The general framework we have applied to firms – exploring command and control, operations, and outside stakeholders – works well to evaluating union capacity.
Our Assessing Union Capacity Chart is an adaptation of the 24 question model, indicating the areas where union assessment should take place. Because this is a self-evaluation rather than a research project, we have designed it as a Union Assessment Survey. Here are some things you should keep in mind when conducting this assessment:
Assessment is a collective activity
It is best to assemble a group of officers, staff, and members to complete this assessment. Multiple perspectives are essential in order to conduct an honest and open assessment.
Assessment is not criticism
The process of conducting an assessment is not an inventory of failures. During this process, avoid placing pejorative judgments on your findings by using a more neutral vocabulary of assessment.
Note areas of disagreement or areas for further investigation
There may be areas where those assembled have different evaluations. These should be noted. While this is primarily not a research exercise, you may also identify areas where you need to gather additional information.
Create a summary report
At the conclusion of the assessment, it is important to create a summary document. This process of