In recent months, a number of companies have faced criticism over their work policies. Yahoo! Inc. (NASDAQ:YHOO), J.C. Penney Company, Inc. (NYSE:JCP), and Best Buy Co., Inc. (NYSE:BBY) have been attacked to various degrees on decisions about when, and where, their employees can live and work. While these stories might make for interesting reading, should investors care?
Yahoo!, Best Buy ended working from home
Both Yahoo! and Best Buy have decided to phase out working from home. Although the companies operate in different fields — one an internet giant, the other an electronics retailer — they do share a number of similarities.
Each firm is operating under the command of a new CEO: for Yahoo! Inc. (NASDAQ:YHOO), Marissa Mayer; for Best Buy Co., Inc. (NYSE:BBY), Hubert Joly. Both Mayer and Joly have been tasked with turning around their respective companies.
Given their status as new CEOs, Mayer and Joly’s decisions likely stem from a perceived need to get a firm grasp on their companies. Having all employees in the office should allow both to get a sense of their workforce, and perhaps be able to influence it more directly.
But others disagree. Famed English billionaire Richard Branson publicly blasted Mayer’s decision, arguing that in the modern age, giving employees freedom to work wherever they please would lead to higher productivity. Given Branson’s resume, it’s hard to argue with his business acumen.
Likewise, Best Buy Co., Inc. (NYSE:BBY)’s decision was criticized by those who created it. Jody Thompson and Cali Ressler fired back at Joly in a blogpost, arguing that the shift was taking the company back into the 20th century.
J.C. Penney’s key executives commute from different states
J.C. Penney has received attention for a slightly different reason — many of its key executives, including CEO Ron Johnson, commute vast distances. In Johnson’s case, from California to Texas.
Given the retailer’s pernicious state, Johnson’s decision to live many states away could be seen as a lack of commitment. There’s also the question of the company’s culture towards expenses, as J.C. Penney spends thousands ferrying executives around on its corporate jets.
Yet, Johnson only agreed to take the job on the condition that he be allowed to remain in California. What’s more, Johnson’s job involves significant travel anyway, so flying to and from Texas is altogether not a big deal.
Different strokes for different folks
There’s no single correct way to manage a company. Countless examples demonstrate this point.
Take the aforementioned Branson and Apple’s legendary CEO Steve Jobs. Branson said Jobs was the entrepreneur he most admired, and jokingly suggested he would have no problem merging Apple with his Virgin empire. Yet, Branson admits they were polar opposites.
“He broke all the rules I believe in,” Branson said of Jobs. “Yet somehow it worked for him. Apple is one of the best brands in the world.”
When it comes to commuting, there have been executives that have turned companies around despite living hundreds of miles away. ConAgra Foods, Inc. (NYSE:CAG)’s CEO Gary Rodkin, for example, was the subject of a Wall Street Journal article in 2006, asking if he could turn around the struggling food processing giant despite traveling from Connecticut to Omaha for work. Shares are up over 50% since he took charge.
The same can be said for working at home. The results-only work environment Best Buy Co., Inc. (NYSE:BBY) abandoned is still used by Yum! Brands, Inc. (NYSE:YUM), while Netflix, Inc. (NASDAQ:NFLX) employs a similar system.
These decisions are largely irrelevant
For the most part, investors in these companies should ignore these stories. Opting for or against working from home, or allowing corporate commutes is largely a nuanced HR decision. It may work in some instances, and not in others. But there are more important matters affecting these companies.
For Yahoo! Inc. (NASDAQ:YHOO), it’s more of a question of how much its stakes in Alibaba and Yahoo! Japan are worth. Or which companies Yahoo! intends to acquire, and could the acquisitions help turn around its core business operation?
For Best Buy Co., Inc. (NYSE:BBY), investors seriously need to consider if there’s still room in the market for a brick and mortar electronics retailer. Is the company’s decision to price-match Amazon an effective defense against showrooming? Will the imposition of a Internet sales-tax benefit the company? Will Microsoft Corporation (NASDAQ:MSFT) and Google Inc (NASDAQ:GOOG) retail stores make Best Buy obsolete?
For J.C. Penney, it’s one of liquidity and sales. With same-store sales having declined so severely, can bringing back discounting encourage old customers to return? Will the Joe Fresh boutiques demonstrate the brilliance of Johnson’s vision? And will the company prevail in its legal dispute with Macy’s, Inc. (NYSE:M) over its Martha Stewart shop?
The media attention does demonstrate one thing
But investors can draw one thing from these stories: not their contents per se, but rather the very fact that they are receiving attention. It isn’t just a coincidence that these stories are being written about these companies.
All three companies are at crucial junctions in their corporate lives. Joly is struggling to keep Best Buy Co., Inc. (NYSE:BBY) relevant; Mayer is hoping to reinvigorate Yahoo! Inc. (NASDAQ:YHOO); and Johnson is trying to revolutionize an ancient retailer.
Investing in these companies means holding stock of corporations with highly uncertain futures. That type of uncertainty is going to draw enhanced media attention. Much of that attention will be worthless noise, but the quantity of noise serves to highlight the risks investors are taking.
The article Investors Should Ignore Working From Home, Commute Controversy originally appeared on Fool.com and is written by Salvatore “Sam” Mattera.
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