Of windmills, bookstores and a serious man named Fred . . . Continued from I’Mgr I The last time I saw Fred wait outside the ('p in the ram, after the Co-op held a gripe session that only one student showed upat He said to me then. "Maybe you're right Maybe we can't do anything Just let it ride " He walked off toward the I .aw Schiail and he walked a little slower Well, anyway, Fred, when I first was going to in terview him about the Coop, asked if he could just say something and me take it down word for word and print it that way That shows how much we journalists are trusted I said I would try to. "No, I mean, could 1 just make a statement and you run it that way?" "Why don't you just write it up Fred, and we ll run your opinion " So Fieri said he would, and did Fmrrald didn't Man! run Hut the Kmerald didn't want to run it because it was (no dry and it was right It was really a position paper and not appropriate to a newspaper style After all, no one would read it And I think that is one defect of lioth newapajiers and their readership So 1 wrote it up into journalese awl it looked like an interview and that was a lie or maybe just a slight distortion of the truth It was still boring liecausr business is txirmg So 1 am rewriting that now 1 told Fred that 1 would quote w hat he had to say and mi 1 am going to do that I can only hope people w ill read it tiecause Fred iloe* have something to say Here is what Fred wrote "The duties and responsibilities of the txuird and the manager seem to be confused. (He cited the Co-op's bylaws in those areas to prove his point.) "Even the most casual observer of the Co-op’s management will recognize that in practice the manager operates autonomously with respect to the board The board seems to feel that exercise of its power of supervision and control will somehow suggest a lack of confidence in the manager The board does no checking or investigating on its own and is quite content to routinely accept the manager’s analysis of the mat ters which he brings before the board Information not presented "Relevant information and data concerning the’ operation of the store is not presented to board mem tiers The manager has yet to issue a meaningful report of the store’s situation since I have been on the board "The general attitude of the board members is one of apathy and indifference Once elected, board mem bers are content to sporadically attend meetings At least half of the board members have failed to contribute anything, thus far, that indicated they have spent time outside of the meetings working to improve the Co-op The board, however, is just a reflection of the lack of concern of the membership in general Members an- content to grumble about the Co-op, but they are not willing to take the time to change it. Perhaps when the rebate is eliminated entirely Fred also suggested changes in the Co-op operations "There is no good reason why Co-op members should have to wait until the end of the year before they are given any indication of what the rebate will be A forecast should tie made during each term so that the actual rebate will not be a total surprise This will also encourage more responsible management throughout the year No evaluation "Currently, there is no meaningful way to evaluate the performance of the Co-op management- there is nothing to compare it to We are expected to unquestionably accept the manager’s own evaluation of his performance. We know how the management per formed, but we don’t know how it could have performed "To acquire some standards of comparison it will be necessary to gather and analyze data from our bookstore as well as similar stores (perhaps at other west coast campuses' When this data is obtained we will have a meaningful basis for determining the strengths and weaknesses of our own operation "Currently, the manager receives a fixed salary come hell or high water Perhaps it would serve as an incentive if a portion were to vary proportionately to the rebate or to another standard of performance This would serve to help maintain the manager’s interest in his performance and allow him to share more directly in the fruits of his labor "If the trend of decreasing profit (and rebate) continues is may be in the best interest of the Co-op to investigate the possibility of leasing the store to a private individual at a fixed percentage of gross sales "Ixisses from internal theft and shoplifting deserve immediate attention All losses not otherwise identified are presently attributed to shoplifting No losses are categorized as due to intemul theft The layout of the store may have to be -hanged and internal security measures adopted to curtail future losses n»c l » »>$> hat Ihr lirjr*! artrction at lilkt al an> twokklorr in i>rrjju*i G. L. Henson: caught in the bind Frank McCarthy: b.s. for the press f mm mm Dave Hytowitz: gets report from Henson w Kred llugi: walks a little slower “Generally, the store does not have a favorable image among those with whom it deals The store must become more responsive and communicate this responsiveness. Errors must be acknowledged and corrected The textbook ordering process must be simplified and facilitated so that errors in the process can be accurately pinpointed, not routinely blamed on the next link in the chain (the publisher). “Business school expertise should be solicited and utilized Practical applications of modem business management procedures can be made on the Co-op by business students through the Co-op board "Business students and professors should be en couraged to use the Co-op as a laboratory to apply modem business theory.” 1 will get back to Fred later, but next 1 talked to Frank McCarthy who is the new faculty advisor to the Coop board Frank McCarthy is an assistant professor of ac counting Well, anyway, 1 told him what 1 was doing— these articles on the Co-op and asked if I could in terview him in connection with them He says sure I say all right Right away he says, as 1 am starting to ask my first question: "Now is this between us or is this for print?" For print "For print," 1 say "All right,” he says 1 can set' there is going to be some distortion of truth here I am at that point of being no longer interested in wasting my time to get the suffering truth But I start the interview anyway, discouraged and bored, play mg my role as a journalist, knowing I'm going to have to turn something in to print Eventually we decide that McCarthy, too, will write a position paper like Fred But unlike Fred's, McCarthy 's paper turns out to be the usual bs for the press words, but no importnat content (my value judgement entirely'. Unlike Fred McCarthy has not been on the board long He has been to only one meeting —no one can tell anything from just one meeting Unlike Fred McCarthy does not have the frustration with his role on the board McCarthy is not likely, in m> opinion to gam the same degree of frustration, if any at all. as Fred because his role is different Fred is one of the active participants in the board with all of the obligations and responsibdities thereof while McCarthy is just an advisor His role is one of talking through glass Fred is encased in the glass McCarthy is very important to the board, though Fred’s face reflects it when he talks of him. “Now that McCarthy is here things should start moving." Fred says. "McCarthy knows about these things He knows what the manager is talking about " McCarthy has told me that he hopes the board does not rely on him too much since his role is that of just an adv isor McCarthy stressed his role of raising questions What some members of the board need are answers And so it goes The person involved here who is the one caught in the bind is really G.L. Henson, manager of the bookstore Flak catcher Henson catches flak from everyone 1 get the impression that if any student were asked about the Co-op, he or she would go into a tirade about how somebody is ripping somebody off, etc And almost invariably that first somebody would be G. L Henson and that second somebody would be the student asked All this flak flies around and,of course. Henson gets defensive. He points out that even though the Co-op gave only a six per cent rebate last year, it was the first year in over twenty that it has been less that ten per cent He points out that the Co-op has to get book orders from all of the faculty, process them and send them off to over 150 publishers and then get the books back If anything happens to the books during the whole process, the Co-op gets all of the blame The cause could be anywhere He points out that college bookstores are constantly concerned with their public relations He will be available to all students at nearly all times who wish to voice complaints 1 personally have seen him take notes when those complaints are voiced and get an answer to the student within a day But not that many students visit him He is proud of the fact that the Co-op has the largest selection of titles—over 16,000 of any bookstore in (>regon Yet still the flak flies Somebody better put their finger on exactly what is the matter If anything is really the matter Just for the record this is generally how the Co-op is operated. (Facts provided by Henson ) The Co-op is one of three per cent of cooperative bookstores out of over 2,000 bookstores 80 per cent are institutionally owned 17 per cent are private institutions such as at Wisconsin or Berkeley Sixty per cent of the Co-op's two million dollar volume is in the textbook trade The mark up on texts is 20 per cent and the Co-op pays all of the handling. In other words, the publisher does control the price of texts A S7 paperback costs $7 because the publisher says so Most publishers allow a return of only 20 per cent of the original order It is a recession year and students are not buying as many books Normal returns usually barely exceed 10 per cent of the order and now in some cases exceed 30 per cent Stanford had a return factor of 50 per cent on all of their texts Shoplifting is on a steep upward curve Ixwses come directly out of profit and thus rebate Inflationary spiral The inflationary spiral has hurt the college book store trade cxpectally because they do not have the profit margin to absorb rising costs of postage, taxes and wages. The Co-op has six or seven permanent full-time employes There are 18-22 part-time student employes Student wives and other University community employes fill out the staff of about 100 Textbook trade at the Co-op is a “loss-break even" proposition Profits come in the general merchandise trade and in paperbacks The Co-op had a net profit last year of 173,000 which they turned back to the students in the rebate 57 per cent of the students turned in their receipts The rebate was 6.18 per cent. The Co-op gets a break by being a member of the College Bookstore Association Through the Association the Co-op gets its filler paper, typing paper, binders, notebooks, etc An example of the savings is a spiral notebook that has 100 pages costs 50 cents at the Co-op at Safeway, one with 48 pages costs 49 cents Another is plain index cards—100 for 20 cents at the Co-op, at Payless, 100 for 29 cents Well, now, let's get back to Fred's statements The manager does operate autonomously of the board in some matters—that is in the actual running of the store But what can we expect? As yet there has not been expertise on the board to operate the store The manager is hired to provide that expertise, and he does The real problem is that the board directors have a feeling of impotence The Co-op is run on exactly the fine line that will provide a profit and continues to be run on that line The board feels impotent because they don't have any real decisions to make and they feel they have to. The nature of the business is such that present policies are geared to maintain that profit, or at least some profit. To make a decision to alter the present policies has so many ramifications for the stiye Will the decision increase the profit and thus rebate or could the decision blow the rebate all to hell7 Here’s where the business expertise enters What will happen7 The board directors don't have the expertise Frustration Will a student board ever have that ex pertise7 Frustration Now another possibility that Fred raises is maybe it is in "the best interest of the Co-op to investigate the possibility of leasing the store to a private individual at a fixed percentage of gross sales ” Maybe? But then again the gross sales of the Co-op were around two million dollars To get even a 10 per cent return would entail a rent rate of about $200,000 Since the net profit was around $73,000, it is highly unlikely that this is going to be a real winner a In other words, if the students persistently feel that they are being ripped off by the "student’s own store then instead of npping ourselves off, why not let someone else do it' Another possibility is letting the store go to the University In the bylaws it says "in the event of disolution or liquidation of the cooperative all surplus shall be distributed to the University of Oregon " The University will have to run the store because the store is vital to the operation of educational process Maybe that would be better’’ What happens here is that the school could run the store like we re doing it (no savings over present con ditiona) or they could run it with higher price* with little restriction trip off) or conceivably they could run it at a loss They could run it at a loss anti pass the savings on to the students because they have at Hither source of in come, namely the taxpayers, to make up for that loss Hut selling that proposition to the taxpayers would be no easy task I will leave these and the rest of Fred s comments up to the consideration of the reader l, "iMtn from inlrrnal IhHt and thopllfling dmrvr Imnirduk a Ur niton