Aaron Feuerstein

Aaron Feuerstein

In this paper I will discuss Aaron Feuerstein, the third-generation president and CEO of Malden Mills Industries, Inc., who leads the Lawrence, Massachusetts business with his father’s and grandfather’s values: kindness, justice and charity. He does this through his charismatic leadership and vision, which binds his employees together into realizing and achieving the same goal. I will show exactly what makes him a leader in the modern business setting and explain why a leader’s vision is important in defining a true innovator, effective manager and charismatic leader.

Feuerstein and Malden Mills had a history of taking care of its employees. Workers’ salaries average $12.50 an hour compared with the textile industry’s average of $9.50. And in the 1950s, when other New England textile manufacturers fled to the South for cheaper labor, Malden Mills stayed. Although Feuerstein’s hands-on management style has always been admired by his employees, what set him apart as a true leader was a near disaster in the winter of 1996. While celebrating his 70th birthday, Feuerstein received word that his 130 year old family owned textile company in Lawrence, Massachusetts was burning to the ground. Three of its manufacturing factories that produce the popular high-end outdoor apparel knits, Polartec® and Polarfleece®, were reduced to charred metal and brick. While watching the fire, Feuerstein decided that he must come up with a plan to not only save his company from financial ruin, but decide the fate of over 3,100 employees that would soon be without a job. He chose to rebuild the plant in Lawrence. He also decided that if he was to continue providing a quality product to consumers, he would have to take care of the skilled laborers who made the product. Feuerstein kept more than 1,000 jobless employees at full pay and medical benefits for three months until the factories were up and running again.

What kept Feuerstein’s company at the top was his strong managing skills. A top management position requires motivation to achieve, but this motivation may be directed to achieving personal, rather than organization goals. Feuerstein believed the role to top management should be to “manage” and the most important resource they must manage is the people that work at all levels of an organization. Their role should not be "to rule", but "...

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.... Reduced to its essence, that means superior technology and superior employees. Reduced still further, as Aaron Feuerstein can tell you, it means superior employees.

Feuerstein has laid off people for the reasons stated above, but all of these employees have been given generous severance packages that included three months of paid medical benefits as well as job training

Feuerstein admits that, as owner, he has a great advantage over leaders of public firms because he answers only to himself. "But I would like to think," he says, "that the average CEO - even though they're reporting to the public and the so-called shareholder -also feels that there's a moral imperative that they must answer to as well."

Bibliography:

The Christian Science Monitor, ‘Corporate Decency’ Prevails at Malden Mills, Shelly Donald Coolidge, March 28, 1996

Parade, by Michael Ryan, September 6, 1996, p.4-5

Life Magazine, Josh Simon, May 5, 1997

L. Larwood, C. M. Falke, M.P. Kriger, and P. Miesing. Structure and meaning of organizational vision. Academy of Management Journal, 39, 1995, pp.740-769

Fortune, Not a Fool, Not a Saint, Thomas Teal, November 11, 1996, p.201