International Directory of Business Biographies VOLUME 4 S - Z doc

Sammons 1946– President and chief executive officer, Rite Aid Corporation Nationality: American.. ■ Mary Sammons came to Rite Aid Corporation as its new president and chief operating offi

International Directory of

BUSINESS BIOGRAPHIES

Rights Acquisitions Management

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Imaging and Multimedia

Dean Dauphinais, Lezlie Light, Dan Newell, Christine O’Bryan

International Directory of Business Biographies

Schlager Group Inc Staff Neil Schlager, president Marcia Merryman Means, managing editor

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International directory of business biographies / Neil Schlager, editor ; Vanessa Caputo, assistant editor; project editor, Margaret Mazurkiewicz ; produced by Schlager Group.

Torrado-p cm.

Includes bibliographical references and indexes.

ISBN 1-55862-554-2 (set hardcover : alk paper) — ISBN 1-55862-555-0 (volume 1) —

ISBN 1-55862-556-9 (volume 2) — ISBN 1-55862-557-7 (volume 3) — ISBN 1-55862-558-5 (volume 4)

1 Businesspeople—Biography 2 Directors of corporations—Biography

PREFACE PAGE vii–viii LIST OF ADVISERS ix LIST OF CONTRIBUTORS xi LIST OF ENTRANTS xiii–xxii ENTRIES

VOLUME 1: A-E 1–466 VOLUME 2: F-L 1–505 VOLUME 3: M-R 1–457 VOLUME 4: S-Z 1–403

NOTES ON CONTRIBUTORS 405–410 NATIONALITY INDEX 411–417 GEOGRAPHIC INDEX 419–425 COMPANY AND INDUSTRY INDEX 427–447 NAME INDEX 449–465

Contents

idbb_fm 9/27/04 9:42 AM Page v

Welcome to the International Directory of Business

Biogra-phies (IDBB) This four-volume set covers more than 600

prominent business people from around the world and is tended for reference use by management students, librarians, educators, historians, and others who seek information about the people leading the world’s biggest and most influential companies The articles, all of which include bylines, were written by a team of journalists, academics, librarians, and in-

in-dependent scholars (See Notes on Contributors.)

Approxi-mately 60 percent of the entrants are American, while 40 percent are from other countries Articles were compiled from material supplied by companies for whom the entrants work, general and academic periodicals, books, and annual reports.

With its up-to-date profiles of important figures from the

world of international business, IDBB complements the ular St James Press series International Directory of Company

pop-Histories (IDCH), which provides entries on the world’s

largest and most influential companies Leaders of many of

the companies covered in IDCH are profiled in IDBB.

INCLUSION CRITERIA

The list of entrants in IDBB was developed by the editors

in consultation with the academics and librarians serving on

IDBB ’s advisory board (See List of Advisers.) The majority

of people profiled here are current or recent chief executives

of large, publicly traded companies such as those found on the Fortune 500 and Global 500 lists of companies compiled

by Fortune magazine Among this group are familiar names

such as H Lee Scott Jr of Wal-Mart, Carly Fiorina of Hewlett-Packard, John Browne of BP, and Nobuyuki Idei of Sony Retired or former executives like GE’s Jack Welch and Vivendi Universal’s Jean-Marie Messier also make the list, as

do a few deceased individuals who were active in the past few years, including Jim Cantalupo of McDonald’s and Chung Ju-yung of Hyundai

In addition, we have included other high-profile als whose companies are privately held or are not large enough

individu-to make the Fortune lists but whose influence makes them

valuable candidates for study, such as Kase L Lawal of CAMAC Holdings, Oprah Winfrey of Harpo Productions, and Terence Conran of Conran Holdings We also mix in up- and-coming executives who may not currently be chief execu- tives but who are rapidly gaining prominence in the business

world; among this group are Indra K Nooyi of PepsiCo and Lachlan and James Murdoch of News Corporation For these latter categories, we have attempted to highlight female and minority executives who, even in the early twenty-first centu-

ry, continue to be underrepresented in the upper echelons of the corporate world

Readers should note that our aim was to produce anced, objective profiles of influential executives, and individ- uals were not disqualified if they or their companies were enmeshed in scandal Thus, the set includes articles about ex- ecutives such as Ken Lay of Enron, Dennis Kozlowski of Tyco International, and Martha Stewart of Martha Stewart Living Omnimedia, all of whom were indicted on criminal charges

bal-in the early 2000s

ARRANGEMENT OF SET AND ENTRY FORMAT The four-volume set is arranged alphabetically by sur- name An alphabetical list of subjects is included in the front- matter Within each entry, readers will find the following sections:

Fact Box: This section provides details about the subject’s birth

and death dates, birth and death locations, family tion, educational background, work history, major awards,and publications For entrants affiliated with a specific com-pany at the time of publication, the Fact Box also includes thecompany address and URL address, except in cases where thesubject is no longer affiliated with a company

informa-Main Text: This section provides a narrative overview of the

sub-ject’s life, career trajectory, and influence The text includessubheadings to assist the reader in navigating the key periods

in the subject’s life

Sources for Further Information: This section lists books,

arti-cles, and Web sites containing more information about thesubject Also included here are sources from which quotationsare drawn in the main text

See also: At the end of most articles is a cross-reference to

appli-cable company profiles in the International Directory of

Com-pany Histories.

Preface

idbb_fm 9/23/04 12:25 PM Page vii

INDEXES

IDBB includes four indexes The Nationality Index lists

entrants according to their country of birth, country of

citi-zenship (if different from country of birth), and country of

long-term residence The Geographic Index lists entrants

ac-cording to the country of the headquarters of operation or the

country where the subject works (if different from country of

the headquarters); the index lists entrants according to their

employer at the time of publication as well as significant

pre-vious companies where they were employed The Company

and Industry Index lists entrants according to their current

and former companies of employment as well the industries

in which those companies operate; in this latter index,

indus-tries are listed in small caps, while companies are listed in

ro-man font with upper- and lowercase letters The Name Index

lists all entrants as well as other significant individuals

dis-cussed in the text

partic-Neil Schlager

SUGGESTIONS WELCOME

Comments and suggestions from users of IDBB on any

as-pect of the product are cordially invited Suggestions for tional business people to include in future new editions or supplements are also welcomed Please write:

Vincenzo Baglieri, PhD

Director, Technology Management Department Bocconi School of Management

Bocconi University Milan, Italy

Karl Moore, PhD

Associate Professor Faculty of Management McGill University Montreal, Canada

Mohammad K Najdawi, PhD

Senior Associate Dean and ProfessorDepartment of Decision and Information Technologies College of Commerce and Finance

Villanova University Villanova, Pennsylvania

Elisa Addlesperger Barry Alfonso Margaret Alic Don Amerman William Arthur Atkins Kirk H Beetz

Patricia C Behnke Mark Best Alan Bjerga Jeanette Bogren Thomas Borjas Carol Brennan Jack J Cardoso

C A Chien Peter Collins Stephen Collins Matthew Cordon Peggy Daniels Amanda de la Garza

Ed Dinger Catherine Donaldson Jim Fike

Virginia Finsterwald Tiffeni Fontno Katrina Ford Erik Donald France Lisa Frick

Margaret E Gillio Larry Gilman Meg Greene Paul Greenland Barbara Gunvaldsen Timothy L Halpern

Lauri Harding Lucy Heckman Ashyia N Henderson Eve M B Hermann John Herrick Jeremy W Hubbell Dawn Jacob Laney Michelle Johnson Jean Kieling Barbara Koch Deborah Kondek Alison Lake Sandra Larkin Josh Lauer Anne Lesser David Lewis Jennifer Long DeAnne Luck Susan Ludwig David Marc William F Martin Beth Maser Doris Morris Maxfield Ann McCarthy Patricia McKenna Lee McQueen Jill Meister Carole Sayegh Moussalli Miriam C Nagel Catherine Naghdi Caryn E Neumann John M Owen Carol Pech

David Petechuk Anastasis Petrou

A Petruso Luca Prono Trudy Ring Nelson Rhodes Celia Ross Joseph C Santora Lorraine Savage

M W Scott Cathy Seckman Kenneth R Shepherd Stephanie Dionne Sherk Hartley Spatt

Janet P Stamatel Kris Swank François Therin Marie L Thompson Mary Tradii Scott Trudell David Tulloch Michael Vandyke Maike van Wijk Stephanie Watson Valerie Webster

S E Weigant Kelly Wittmann Lisa Wolff Timothy Wowk Ronald Young Barry Youngerman Candy Zulkosky

Contributors

idbb_fm 9/20/04 3:40 PM Page xi

F Duane Ackerman Josef Ackermann Shai Agassi Umberto Agnelli Ahn Cheol-soo Naoyuki Akikusa Raúl Alarcón Jr

William F Aldinger III Vagit Y Alekperov César Alierta Izuel Herbert M Allison Jr

John A Allison IV Dan Amos Brad Anderson Richard H Anderson

G Allen Andreas Jr

Micky Arison

C Michael Armstrong Bernard Arnault Gerard J Arpey Ramani Ayer

B Michael J Bailey Sergio Balbinot Steve Ballmer Jill Barad Don H Barden Ned Barnholt

Colleen Barrett Craig R Barrett Matthew William Barrett John M Barth

Glen A Barton Richard Barton

J T Battenberg III Claude Bébéar Pierre-Olivier Beckers Jean-Louis Beffa Alain Belda Charles Bell Luciano Benetton Robert H Benmosche Silvio Berlusconi Betsy Bernard Daniel Bernard David W Bernauer Wulf H Bernotat Gordon M Bethune

J Robert Beyster Jeff Bezos Pierre Bilger Alwaleed Bin Talal Dave Bing Carole Black Cathleen Black Jonathan Bloomer Alan L Boeckmann Daniel Bouton

List of Entrants

idbb_fm 9/20/04 3:40 PM Page xiii

Chung Ju-yung Carla Cico Philippe Citerne Jim Clark Vance D Coffman Douglas R Conant Phil Condit Terence Conran John W Conway John R Coomber Roger Corbett Alston D Correll Alfonso Cortina de Alcocer David M Cote

Robert Crandall Mac Crawford Carlos Criado-Perez James R Crosby Adam Crozier Alexander M Cutler Márcio A Cypriano

D David F D’Alessandro Eric Daniels

George David Richard K Davidson Julian C Day Henri de Castries Michael S Dell Guerrino De Luca Hebert Demel Roger Deromedi

List of Entrants

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Thierry Desmarest Michael Diekmann William Dillard II Barry Diller John T Dillon Jamie Dimon Peter R Dolan Guy Dollé Tim M Donahue David W Dorman Jürgen Dormann

E Linn Draper Jr

John G Drosdick José Dutra

E Tony Earley Jr

Robert A Eckert Rolf Eckrodt Michael Eisner John Elkann Larry Ellison Thomas J Engibous Gregg L Engles Ted English Roger Enrico Charlie Ergen Michael L Eskew Matthew J Espe Robert A Essner John H Eyler Jr

F Richard D Fairbank Thomas J Falk David N Farr

Jim Farrell Franz Fehrenbach Pierre Féraud

E James Ferland Dominique Ferrero Trevor Fetter John Finnegan Carly Fiorina Paul Fireman Jay S Fishman Niall FitzGerald Dennis J FitzSimons Olav Fjell

John E Fletcher William P Foley II Jean-Martin Folz Scott T Ford William Clay Ford Jr

Gary D Forsee Kent B Foster Charlie Fote Jean-René Fourtou

H Allen Franklin Tom Freston Takeo Fukui Richard S Fuld Jr

S Marce Fuller Masaaki Furukawa

G Joseph Galli Jr

Louis Gallois Christopher B Galvin Roy A Gardner Jean-Pierre Garnier Bill Gates

List of Entrants

idbb_fm 9/20/04 3:40 PM Page xv

Richard Harvey William Haseltine Andy Haste Lewis Hay III William F Hecht Bert Heemskerk Rainer Hertrich John B Hess Laurence E Hirsch Betsy Holden Chad HollidayKatsuhiko Honda Van B Honeycutt Kazutomo Robert HoriJanice Bryant Howroyd Ancle Hsu

Günther Hülse

L Phillip Humann Franz Humer

I Nobuyuki Idei Robert Iger Jeffrey R Immelt Ray R Irani

J Michael J Jackson Tony James Charles H Jenkins Jr

David Ji Jiang Jianqing Steve Jobs Jeffrey A Joerres

List of Entrants

idbb_fm 9/20/04 3:40 PM Page xvi

Leif Johansson Abby Johnson John D Johnson John H Johnson Robert L Johnson William R Johnson Lawrence R Johnston Jeff Jordan

Michael H Jordan Abdallah Jum’ah Andrea Jung William G Jurgensen

K Eugene S Kahn Akinobu Kanasugi Isao Kaneko Ryotaro Kaneko Mel Karmazin Karen Katen Jeffrey Katzenberg Jim Kavanaugh Robert Keegan Herb Kelleher Edmund F Kelly Mikhail Khodorkovsky Naina Lal Kidwai Kerry K Killinger James M Kilts Eric Kim Kim Jung-tae Ewald Kist Gerard J Kleisterlee Lowry F Kline Philip H Knight Charles Koch

Richard Jay Kogan John Koo

Timothy Koogle Hans-Joachim Körber Richard M Kovacevich Dennis Kozlowski Sallie Krawcheck Ronald L Kuehn Jr

Ken Kutaragi

L Alan J Lacy

A G Lafley Igor Landau Robert W Lane Sherry Lansing Jean Laurent Kase L Lawal Bob Lawes Ken Lay Shelly Lazarus Terry Leahy Lee Yong-kyung David J Lesar

R Steve Letbetter Gerald Levin Arthur Levinson Kenneth D Lewis Victor Li

Li Ka-shing Alfred C Liggins III Liu Chuanzhi

J Bruce Llewellyn

Lu Weiding Iain Lumsden Terry J Lundgren

List of Entrants

idbb_fm 9/20/04 3:40 PM Page xvii

William E Mitchell Hayao Miyazaki Anders C Moberg Larry Montgomery James P Mooney Ann Moore Patrick J Moore Giuseppe Morchio Tomijiro Morita Angelo R Mozilo Anne M Mulcahy Leo F Mullin James J Mulva Raúl Muñoz Leos James Murdoch Lachlan Murdoch Rupert Murdoch

N R Murthy

A Maurice Myers

N Kunio Nakamura Robert L Nardelli Jacques Nasser

M Bruce Nelson Yoshifumi Nishikawa Hidetoshi Nishimura Uichiro Niwa Gordon M Nixon Jeffrey Noddle Tamotsu Nomakuchi Indra K Nooyi Blake W Nordstrom

List of Entrants

idbb_fm 9/20/04 3:40 PM Page xviii

Richard C Notebaert David C Novak Erle Nye

O James J O’Brien Jr

Mark J O’Brien Robert J O’Connell Steve Odland Adebayo Ogunlesi Minoru Ohnishi Motoyuki Oka Tadashi Okamura Jorma Ollila Thomas D O’Malley

E Stanley O’Neal David J O’Reilly Amancio Ortega Marcel Ospel Paul Otellini Mutsutake Otsuka Lindsay Owen-Jones

P Pae Chong-yeul Samuel J Palmisano Helmut Panke Gregory J Parseghian Richard D Parsons Corrado Passera Hank Paulson Michel Pébereau Roger S Penske

A Jerrold Perenchio Peter J Pestillo Donald K Peterson

Howard G Phanstiel Joseph A Pichler William F Pickard Harvey R Pierce Mark C Pigott Bernd Pischetsrieder Fred Poses

John E Potter Myrtle Potter Paul S Pressler Larry L Prince Richard B Priory Alessandro Profumo Henri Proglio David J Prosser Philip J Purcell III

Q Allen I Questrom

R Franklin D Raines

M S Ramachandran Dieter Rampl Lee R Raymond Steven A Raymund Sumner M Redstone Dennis H Reilley Steven S Reinemund Eivind Reiten Glenn M Renwick Linda Johnson Rice Pierre Richard Kai-Uwe Ricke Stephen Riggio Jim Robbins

List of Entrants

idbb_fm 9/20/04 3:40 PM Page xix

O Bruton Smith Stacey Snider Jure Sola George Soros William S Stavropoulos

Sy Sternberg David L Steward Martha Stewart Patrick T Stokes Harry C Stonecipher Hans Stråberg Belinda Stronach Ronald D Sugar Osamu Suzuki Toshifumi Suzuki Carl-Henric Svanberg William H Swanson

T Keiji Tachikawa Noel N Tata Sidney Taurel

List of Entrants

idbb_fm 9/20/04 3:40 PM Page xx

Gunter Thielen Ken Thompson Rex W Tillerson Robert L Tillman Glenn Tilton James S Tisch Barrett A Toan Doreen Toben Don Tomnitz Shoichiro Toyoda Tony Trahar Marco Tronchetti Provera Donald Trump

Shiro Tsuda Kazuo Tsukuda Joseph M Tucci Ted Turner John H Tyson

U Robert J Ulrich Thomas J Usher Shoei Utsuda Akio Utsumi

V Roy A Vallee Anton van Rossum Thomas H Van Weelden Daniel Vasella

Ferdinand Verdonck Ben Verwaayen Heinrich von Pierer

W Norio Wada Rick Wagoner

Ted Waitt Paul S Walsh Robert Walter Shigeo Watanabe Fumiaki Watari Philip B Watts Jürgen Weber Sandy Weill Serge Weinberg Alberto Weisser Jack Welch William C Weldon Werner Wenning Norman H Wesley

W Galen Weston Leslie H Wexner Kenneth Whipple Edward E Whitacre Jr

Miles D White Meg Whitman David R Whitwam Hans Wijers Michael E Wiley Bruce A Williamson Chuck Williamson Peter S Willmott Oprah Winfrey Patricia A Woertz

Y Shinichi Yokoyama Dave Yost

Larry D Yost Yun Jong-yong

List of Entrants

idbb_fm 9/20/04 3:40 PM Page xxi

Klaus Zumwinkel

List of Entrants

idbb_fm 9/20/04 3:40 PM Page xxii

■ ■ ■

Alfredo Sáenz

1942–

Chief executive officer, Banco

Santander Central Hispano

Nationality: Spanish

Born: November 1942, in Las Arenas, Spain

Education: University of Valladolid, JD; Deusto University,

MS

Family: Married; children: three

Career: Tubacex, 1965–1980, board member; Banco

Vizcaya, 1980–1983, director of planning; Banca

Catalana, 1983–1988, managing director; Banco

Vizcaya, 1988–1990, managing director; Banco Bilbao

Vizcaya, 1990–1993, first vice president; Banco

Español de Crédito (Banesto), 1993–2002, president;

Banco Santander Central Hispano, 2002–, CEO

Address: Plaza de Canalejas 1, 28014 Madrid, Spain;

http://www.gruposantander.com

■ Alfredo Sáenz established himself as an expert at saving

fail-ing banks in Spain With degrees in both law and economics,

he worked for many years in the industrial sector in his native

Basque country In the 1980s he entered banking and quickly

became one of the country’s most influential bankers He

made his reputation by rescuing the declining Banca Catalana

He cemented this reputation by restoring Banesto in the

1990s Known for his single-minded dedication to whatever

task was at hand, Sáenz went to work in the early 2000s to help

Banco Santander Central Hispano in its attempt to solve its

economic difficulties in Latin America

EARLY CAREER

Born in 1942 in Spain’s Basque country, Sáenz obtained

a law degree from the University of Valladolid He also

re-ceived a degree in economics from the prestigious Jesuit

Deus-to University in Bilbao, where he later taught management on

occasion Sáenz turned down such positions as deputy defense

minister in the Spanish government to work in the industrial

sector in the Basque country From 1965 to 1980, he workedfor Tubacex, a Basque steel pipe producer After leaving Tu-bacex, Sáenz went into banking In 1980 Pedro Toledo, whoran Banco Vizcaya, hired Sáenz as director of planning Tole-

do, who had close ties to Spain’s Socialist government, hirednumerous bright and ambitious young Spanish executives,many of whom went on to become some of the country’s mostinfluential bankers

The 1980s were a time of crisis in the Spanish banking tor, and many banks were failing Among those experiencingfinancial difficulties was the Banca Catalana Spain’s CentralBank fired Catalana’s management, and Banco Vizcaya took

sec-it over Toledo sent Sáenz to rescue the failing Catalan bank

He soon made Catalana into one of Spain’s most profitablebanks Sáenz became well liked in Barcelona, an unusual com-pliment for a Basque He even went so far as to make his first

speech to Catalana shareholders in the Catalan language,

which he had learned in just nine months

Toledo’s Banco Vizcaya later merged with Banco Bilbao,

and soon a cultural clash between the employees of the two

banks emerged Some saw Vizcaya’s managers as too flashy and

incapable of running a large bank Bilbao’s executives had the

reputation of being pen pushers who spent too much time

counting paper clips In 1988 Vizacaya’s Toledo and Bilbao’s

José Angel Sánchez Asain became copresidents of the new

Banco Bilbao Vizcaya (BBV) Then, in 1989, Toledo died

The following year the Central Bank announced that it would

pick a single president for BBV There was some talk that it

would select Sáenz to run the bank However, the Central

Bank picked Bilbao’s Emilio Ybarra instead, relegating Sáenz

to the position of first vice president Sáenz accepted the lesser

position with grace

SÁENZ RESCUES BANESTO

In December 1993 Sáenz was provisionally named as

presi-dent of the Banco Español de Crédito (Banesto) Spain’s

Cen-tral Bank selected Sáenz to replace Mario Conde and to rescue

the failing bank The backing of the Central Bank virtually

as-sured that shareholders would elect Sáenz as president Many

analysts in Spanish banking circles felt that the Central Bank

rewarded Sáenz with the Banesto post for graciously accepting

the post of vice president at BBV rather than fighting the

deci-sion

BBV, Sáenz’s employer, agreed to “lend” the executive to

Banesto Soon both BBV and Banco Santander were

compet-ing to take over Banesto Many analysts thought that since

BBV had allowed Sáenz to go to Banesto, it had the inside

track to absorb the failing bank However, in April, Banco

Santander won out and took control of Banesto In an ironic

twist, Banco Santander kept Sáenz as president of Banesto

with a generous compensation package rather than letting him

return to BBV Banco Santander wanted to keep Sáenz

be-cause of his established reputation as a troubleshooter who was

capable of restoring the health of failing banks Once firmly

in position at Banesto, Sáenz brought a number of

high-ranking executives from BBV, all of them former employees

of Banco Vizcaya before the merger with Bilbao

Sáenz informed the Financial Times that he had to start

from scratch in his rescue efforts at Banesto, saying that “when

I got here I didn’t know where the bathrooms were, let alone

the documents, and the first weeks were horrible In a question

of weeks, I had to discover what the possibilities were and

where the bank should go if it did recover” (October 4, 1994)

Sáenz established five priorities in his attempt to get

Banes-to back on its feet Known for his single-mindedness, he

ex-plained to Euromoney (June 1995) that “nobody [was] allowed

to talk to me about anything else.” He didn’t even want to hearabout a possible sixth priority Sáenz was very strict in adhering

to his five priorities When all Banesto employees turned ontheir computers in the morning, after a screen came up saying

“Buenos dias,” five windows with the five priorities appeared

on their monitors Each window told the employees how theyand their departments were doing in meeting each one of thegoals as of that day Sáenz claimed that such a tactic helpedfocus his workers on the task at hand

Principal among the priorities was recovering bad debts, ofwhich the bank had many Sáenz appointed 800 employees tothe task of recovering unpaid loans He also wanted to improvethe bank’s risk-management systems, which he felt were inade-quate, as was clear from the many bad debts on Banesto’sbooks Rather than blame any particular people for the prob-lem, Sáenz claimed that there was a general lack of risk man-agement know-how at the bank Another step that Sáenz tookwas to reconstruct the bank’s loan book, establishing credit rat-ings for all customers in the hope of avoiding future bad loans.Sáenz also sought to raise the fees that Banesto charged its cus-tomers for various services While not popular with clients, thebank’s fees had been much lower than those of other Spanishbanks In addition, Sáenz began to dispose of some of Banes-to’s assets not related to banking, such as a battery producer,

a mining company, and a winery

In 1995 Sáenz could claim some successes, although his job

was not done He informed Euromoney that “by the year’s end,

we will have achieved about 70 percent of our recovery gram’s aims, but 1996 will still be a housekeeping year” (June1995) By 1997 Sáenz had restored Banesto to financial health.The bank was turning a profit, and he had succeeded in cut-ting the amount of bad loans in half Ana Patricia Botín, who

pro-replaced Sáenz as Banesto CEO, told the Wall Street Journal,

that “things have improved so much at Banesto under Alfredo,that finding room for further improvement isn’t easy” (March

ny Sáenz left the Banesto post to accept the position of CEO

at SCH His main concern upon taking over at SCH was thebank’s exposure to Latin America, especially Argentina Aneconomic crisis in that country had led to a depreciating cur-rency and many restrictions on banking operations In re-sponse, Sáenz stopped providing capital to SCH’s Argentineunits until the government there could guarantee a viable fi-nancial system Sáenz also vowed to lower his bank’s profile

in Latin America, because he felt poor economic situations inthe region were hurting SCH’s share price To this end, anddespite the fact that SCH owned banks in 11 Latin American

Alfredo Sáenz

countries, Sáenz decided to concentrate only on Brazil,

Mexi-co, Chile, and Puerto Rico Furthermore, he determined to

re-focus SCH on its European activities

SÁENZ THE MAN

Sáenz established a reputation as a workaholic technocrat

He was also known for his ability to focus on the matter at

hand, rarely straying from his current task He was well like

among his peers While he had a conservative image, Sáenz was

known to have a great sense of fun underneath his staid veneer

An avid reader, he typically selected books from his large

per-sonal business library He also frequently delivered speeches on

the art of management Sáenz was known as a family man who

spent many summers with his wife and children in Majorca

See also entries on Banco Bilbao Vizcaya, S.A and Banco

Santander Central Hispano S.A in International Directory of

Company Histories.

SOURCES FOR FURTHER INFORMATION

Bruce, Peter, “The Rise of Alfredo Sáenz,” Financial Times,

January 4, 1994

Burns, Tom, “Banesto Bounces Back to Health with 26

Percent Advance,” Financial Times, January 22, 1998.

———, “Sáenz Poaches from BBV,” Financial Times, May 16,

1994

———, “Unraveling the Banesto Tangle,” Financial Times,

October 4, 1994

Crawford, Leslie, “SCH Hit by Exposure in Argentina,”

Financial Times, April 30, 2002.

Eade, Philip, “They Reign in Spain,” Euromoney (September

1994): 38–42

Levitt, Joshua, “From Industry to Top Banker,” Financial

Times October 21, 2003.

“Makes Sáenz,” Financial Times, April 28, 1994.

Narbrough, Colin, “Banesto Chief Says Revival Is Coming,”

Times (London), August 23, 1994.

Vitzthum, Carlta, “Santander Head’s Daughter Returns to the

Spotlight at Banesto Retail Unit,” Wall Street Journal,

March 27, 2002

“Wake-up Call at Banesto,” Euromoney (June 1995): 152.

—Ronald Young

Alfredo Sáenz

■ ■ ■

Mary F Sammons

1946–

President and chief executive officer,

Rite Aid Corporation

Nationality: American

Born: October 12, 1946, in Portland, Oregon

Education: Marylhurst College, BS, 1970

Family: Daughter of Lee W and Ann (Cherry) Jackson;

married Nickolas F Sammons, September 12, 1967;

children: one

Career: Fred Meyer, 1973–1975, management trainee;

1975–1980, buyer; 1980–1986, vice president,

merchandising; 1986–1997, senior vice president and

manager of soft goods division; 1997–1998, executive

vice president, Apparel, Home Electronics, and Home

Group; 1998–1999, president and chief executive

officer of Fred Meyer Stores; Rite Aid Corporation,

1999–2003, president and chief operating officer;

2003–, president and chief executive officer

Awards: Named Woman of Achievement, YWCA, Portland,

Oregon, 1987; named 2001 Chain Drug Retailer of the

Year by Chain Drug Review magazine; named one of

America’s 50 most powerful women in business by

Fortune magazine, 2003.

Address: Rite Aid Corporation, 30 Hunter Lane, Camp Hill,

Pennsylvania 17011; http://www.riteaid.com

■ Mary Sammons came to Rite Aid Corporation as its new

president and chief operating officer in 1999, a time when the

Pennsylvania-based drugstore chain was teetering on the edge

of bankruptcy Part of an infusion of new management blood

recruited from Fred Meyer shortly after the latter’s acquisition

by Kroger Company, Sammons in less than five years helped

to steer the company back to profitability After years of

un-broken losing quarters, in early 2004 Rite Aid posted a profit

of $73.6 million on total revenue of $4.11 billion for the third

quarter of fiscal 2004, which ended November 29, 2003

These figures were up from a net loss of $16.4 million on sales

of $3.87 billion a year earlier

Sammons was widely recognized for the pivotal role she

played in engineering the turnaround at Rite Aid In early

Mary F Sammons AP/Wide World Photos.

2002 Chain Drug Review named Sammons Chain Drug

Re-tailer of the Year for 2001, citing her role in a “dramatic morphosis” that had rescued Rite Aid from the brink of extinc-tion and transformed it into a drug chain “within sight of itsobjective of competing on equal footing with the best drugchains in America” (January 7, 2002) Also lavish in its praise

meta-of Sammons’s accomplishments was Fortune, which in

Octo-ber 2003 named her to its list of the 50 most powerful women

in American business Noting that Rite Aid “was a basket case

when Sammons arrived in late 1999,” Fortune cited the new

president’s contribution to the drugstore chain’s recovery inthe closure of more than 400 underperforming stores and therebuilding of Rite Aid’s relationships with its vendors

LAID OUT SHORT-TERM STRATEGY

To continue Rite Aid’s return to solid profitability,

Sam-mons in late 2003 laid out her short-term strategy for the

com-pany According to Chain Drug Review (October 27, 2003),

Sammons said that Rite Aid would focus on four key priorities:

(1) growing pharmacy script counts, (2) achieving front-end

sales growth, (3) controlling expenses, and (4) improving

cus-tomer service Another focus of Sammons’s campaign to

re-build Rite Aid was to improve the morale of the drug chain’s

associates by involving them more deeply in the formulation

of company policy When Sammons took over as president in

1999, she found that previous management had badly

neglect-ed this important resource As she told Chain Drug Review,

“Our people had been trampled They were worried about

their futures and uncertain about what was going to happen

to the company” (December 10, 2001)

Sammons, the daughter of Lee W and Ann (Cherry)

Jack-son, was born in Portland, Oregon After finishing high school

in Portland, she enrolled at nearby Marylhurst College, where

in 1970 she earned a bachelor’s degree in French as well as a

secondary-level teaching certificate At the beginning of her

sophomore year at Marylhurst, Sammons married Nickolas F

Sammons In 1973, after a brief career in teaching, Sammons

entered the management training program at Portland-based

Fred Meyer, a major food, drug, and general merchandise

re-tailer in the western United States

For more than a quarter century, Sammons worked for

Fred Meyer, leaving only after the Oregon-based retailer was

taken over in 1999 by the Ohio-based Kroger Company After

finishing her management training program in 1975,

Sam-mons began work as a buyer for Fred Meyer, a position she

held until 1980, when she was named vice president for

mer-chandising In 1986 she was promoted to senior vice president

and named manager of the company’s soft goods division In

1997 Sammons was appointed executive vice president and

as-signed the responsibility for managing the company’s Apparel,

Home Electronics, and Home Group A year later she was

pro-moted to president and chief executive officer of Fred Meyer

Stores, the Meyer subsidiary that operates the chain’s large

one-stop shopping centers

LEFT FRED MEYER AFTER KROGER ACQUISITION

In late 1998 Kroger Company, America’s largest

supermar-ket chain, reached an agreement with the board of Fred Meyer

to acquire Meyer for $13 billion in stock and assumed debt

Less than seven months after the acquisition was finalized in

late May 1999, Sammons, along with fellow Fred Meyer

exec-utives Robert G Miller, David Jessick, and John Standley, left

the newly merged company to help save the foundering Rite

Aid from bankruptcy Sammons joined Rite Aid as president

and chief operating officer while Miller took over as the

drug-store chain’s chairman and CEO Jessick, formerly the tive vice president of finance and investor relations at FredMeyer, joined Rite Aid as chief administrative officer, andStandley took over as chief financial officer, the same post hehad held at Fred Meyer

execu-When Sammons and the rest of the new management teamtook over at Rite Aid in December 1999, the drugstore chainwas in total disarray Martin L Grass, the son of the compa-ny’s founder, had resigned in October 1999 as chairman andCEO amid growing accounting and legal problems Rite Aid’sboard, led by four of its seven independent directors, renegoti-ated loan payment schedules to give the company an extra year

to repay $3.3 billion in debts, originally due at the end of tober The Los Angeles-based investment banker LeonardGreen & Partners contributed $300 million to Rite Aid’sdwindling coffers, giving the company a minority stake in thechain In mid-November 1999 KPMG, Rite Aid’s longtimeauditor, severed its relationship with the drug chain because

Oc-it claimed Oc-it could no longer trust the company’s top managersaccurately to portray Rite Aid’s financial status On the heels

of KPMG’s announcement, the Securities and ExchangeCommission launched a formal investigation into Rite Aid’saccounting practices

HELPED TO CREATE NEW CORPORATE CULTUREOne of Sammons’s priorities in putting Rite Aid on theroad to financial recovery was the creation of a new corporateculture at the drugstore chain Under her direction, the com-pany’s new management slowly opened new lines of commu-nication with employees at all levels of the chain Sammonsquickly discovered that most of Rite Aid’s employees had beenall too aware of the company’s problems under its previousmanagement but had been rebuffed whenever they offeredsuggestions for change Sammons worked hard to turn aroundmorale, trying to convince all employees that their input wasimportant and essential if Rite Aid were to recover and prosper

once again As she told Chain Drug Review (December 10,

2001), “There are a lot of great people here And people bondvery quickly when they’re working together to overcome ob-stacles It’s exciting to see progress being made” and see howthat progress is reflected in improved employee morale

As Miller and the rest of the new management team cused on the critical issues of refinancing and the creation of

fo-a relifo-able finfo-ancifo-al reporting system, Sfo-ammons shouldered theresponsibility for getting Rite Aid’s core drugstore businessback on track and growing once again To strengthen the oper-ations of retail outlets throughout the chain, Sammons workedwith vendors to ensure a reliable flow of inventory to stores

To recapture some of the business lost during the height ofRite Aid’s financial management crisis, she created pharmacyadvisory panels These panels, made up of company pharma-

Mary F Sammons

cists and pharmacy managers, according to MMR magazine

(August 20, 2001), came up with valuable ideas for improving

work flow and customer service as well as innovative pricing

initiatives

REVIVED RITE AID

Sammons also revived Rite Aid’s advertising circular and

put greater emphasis on customer service Greater investment

in technology helped to hasten the chain’s progress on the

lat-ter front, with robotics increasing the speed with which

pre-scriptions could be filled and voice messaging systems giving

customers a way to order refills easily and select pickup times

The payoff for these improvements was quickly reflected in

higher customer counts and prescription counts

For the first full fiscal year of operations under the new

management team, Rite Aid reported a net loss of nearly $1.6

billion on sales of $14.5 billion In fiscal 2002, which ended

February 28, 2002, the company’s net loss had been cut almost

in half Rite Aid reported a fiscal 2002 net loss of $828 million

on revenue of almost $15.2 billion A year later the company’s

net loss had been significantly reduced to only $112.1 million

on total sales of $15.8 billion

In April 2003 Rite Aid chairman Miller passed on his CEO

responsibilities to Sammons, whom he said he had decided

early on to recommend as his successor Sammons, along with

Miller and the rest of the new management team at Rite Aid,

took control of the company at the end of 1999, when most

observers felt a Chapter 11 bankruptcy filing was inevitable

Under their direction the company not only avoided

bank-ruptcy but also managed to reinvigorate sales and significantly

improve operating results Of Sammons’s contribution to Rite

Aid’s dramatic turnaround, Miller said, “Since we arrived

Mary has had responsibility for running the business day to

day and leading the change to a new corporate culture,”

ac-cording to MMR (January 12, 2004).

WORKED TO BUILD UP PHARMACY BUSINESS

To help Rite Aid build up its pharmacy business, which

ac-counts for roughly 63 percent of total revenue, Sammons took

a series of steps to beef up and streamline the chain’s pharmacy

operations By late summer 2003 Rite Aid had introduced

e-prescribing into 16 of its markets and announced its intention

eventually to bring that capability to all of its stores To

expe-dite the expansion of e-prescription capability throughout the

chain, Rite Aid established relationships with ProxyMed and

SureScripts Another key component of the company’s

cam-paign to increase its pharmacy base was to purchase

prescrip-tion files from independent drugstores The chain nearly

dou-bled its budget for prescription file purchases during fiscal

2004 Rite Aid also moved aggressively to capture more of the

senior market by test marketing a senior loyalty card that letsolder customers earn back 15 percent of their prescription cost

as a credit toward a future purchase

In May 2003 Sammons, already the highest-rankingwoman executive in the chain drug industry, became the firstfemale ever to serve as chairman of the industry’s National As-sociation of Chain Drug Stores (NACDS) for a year AtNACDS’s Pharmacy and Technology Conference in August

2003, she urged all association members to work together to

elevate the role of the pharmacist According to Drug Store News, Sammons emphasized the central role of the pharmacy

in the operation of all drugstore chains “Simply put, we as anindustry cannot honestly talk about the value of pharmacy un-less we deliver for our pharmacists by giving them meaningfulinvolvement in business decisions” (September 22, 2003).Sammons and her husband, Nickolas, lived in a home notfar from Rite Aid’s headquarters in Camp Hill, Pennsylvania

In addition to her responsibilities at Rite Aid and NACDS,Sammons also served as a member of the board of governors

of the Children’s Miracle Network

See also entries on Fred Meyer, Inc and Rite Aid Corporation

in International Directory of Company Histories.

SOURCES FOR FURTHER INFORMATION

Belden, Tom, “Rite Aid’s New CEO Aims for Healing from

Ground Up,” Philadelphia Inquirer, August 24, 2003.

Dochat, Tom, “Camp Hill-Based Rite Aid Demotes Its

Finance Chief,” Harrisburg Patriot-News, January 10, 2004.

———, “Rite Aid Executive Receives Payment from Kroger,”

Harrisburg Patriot-News, January 13, 2004.

Ferraro, Cathleen, “Rite Aid Names New Chief Executive in

Turn-Around Effort,” Sacramento Bee, December 8, 1999.

“Fortune Cites Sammons,” Chain Drug Review, October 13,

2003

“Four Initiatives Will Take Chain to New Level,” Chain Drug

Review, October 27, 2003.

Johnsen, Michael, “File Acquisition Lays Foundation for Solid

Growth,” Drug Store News, August 18, 2003.

———, “On Steadier Ground, Rite Aid Sets New Goals,”

Drug Store News, July 21, 2003.

Johnsen, Michael, and James Frederick, “NACDS ChairmanUrges Collaboration to Stress Pharmacists’ Role in Patient

Care,” Drug Store News, September 22, 2003.

Levy, Marc, “After Scandal, Rite Aid Sees Turnaround,” AP

Online, April 22, 2003.

“Management Instills New Sense of Pride,” Chain Drug Review,

December 10, 2001

Mary F Sammons

“Miller-Sammons Partnership the Catalyst,” Chain Drug

“New Management Team Aims to Get Rite Aid Back on

Track,” Chain Drug Review, May 1, 2000.

Pinto, David, “CDR Names Rite Aid’s Sammons Retailer of

Year,” Chain Drug Review, January 7, 2002.

Pressler, Margaret Webb, “Suddenly It’s Right Aid: How One

Chain Turned a Corner with Old-Fashioned Retail

Virtues,” Washington Post, September 7, 2003.

“Rite Aid Finally Gets Back into the Black,” Chain Drug

Simon, Ellen, “Rite Aid Names New CEO, Prepares to

Confront Multiple Crises,” Newark Star-Ledger, December

6, 1999

Sommer, Constance, “Kroger Makes Bid to Buy Fred Meyer;

QFC Included in Deal Expected to Close in ‘99,” Seattle

Post-Intelligencer, October 20, 1998.

Zwiebach, Elliot, “Kroger Execs Jump Ship to Rite Aid; Stock

Sinks,” Supermarket News, December 13, 1999.

—Don Amerman

Mary F Sammons

Born: April 10, 1946, in Cincinnati, Ohio.

Education: DePauw University, BA, 1968; University of

Michigan, MBA, 1970

Family: Married Karen (maiden name unknown); children:

two

Career: Proctor & Gamble Company, 1970–1973,

marketing and sales; General Mills, 1974–1983,

various positions; 1983–1986, vice president and

general manager of Northstar Division; 1986, vice

president and general manager of new business

development; 1986–1988, president of Yoplait USA;

1988–1991, president of Big G Division; 1989–1991,

senior vice president; 1991-1992, executive vice

president; 1992–1996, vice chairman of the board;

1993–1995, president; 1995–, chairman and chief

executive officer

Awards: Named one of the “Top 25 Managers” by

BusinessWeek, 2001; William H Albers Industry

Relations Award, 2002

Address: General Mills, Inc., One General Mills Boulevard,

Minneapolis, Minnesota 55426; http://www.general

mills.com

■ Steve Sanger developed a reputation as a savvy marketer in

his rise to the position as chairman and chief executive officer

of General Mills Sanger gained an interest in marketing when,

as a college student, he promoted Motown concerts being held

at DePauw University After receiving an MBA from the

Uni-versity of Michigan and working for three years at Proctor &

Gamble Company, he joined General Mills in 1974 He rose

up the management ranks at the company until he was

ulti-mately elected chairman and CEO in 1995 Sanger was known

for being a relaxed manager who was cordial to subordinates

and who encouraged debate

LEARNING MARKETING BY SELLING CONCERTTICKETS

Sanger enrolled at DePauw University in Greencastle, ana, where he was elected president of the student union Hisfirst experience in marketing came as an undergraduate stu-dent when he began to promote Motown concerts that werebeing held on campus The experience changed the direction

Indi-of Sanger’s career “The main lesson that I learned is that it’s

a lot easier to be a good marketer if you’ve got a good

prod-uct,” he told BusinessWeek “It was a lot easier to sell tickets

to the Temptations than the Electric Prunes” (March 26,2001)

Sanger considered promoting concerts as a career aftergraduating from DePauw in 1968 He also considered attend-ing law school He rejected both ideas, however, and insteadenrolled at the University of Michigan, earning an MBA in

1970 After earning his graduate degree, Sanger was hired byProctor & Gamble Company, where he held a series of mar-keting and sales positions

MOVED TO GENERAL MILLSSanger moved to a position with General Mills in 1974.Over the next nine years he worked in a variety of marketingpositions within the company’s consumer food businesses.The company began to take note of his marketing skills, and

in 1983 he was promoted to the position of vice president andgeneral manager of the company’s Northstar Division In

1986 he became the general manager of the company’s newbusiness development division for a time before being namedpresident of Yoplait USA, the company’s yogurt producer Histenure with Yoplait was successful, and his leadership allowedthe company to surpass Dannon Company in yogurt sales.Sanger was rewarded for his success with Yoplait in 1988,when he was named president of the company’s Big G cerealdivision, the largest and most profitable division in the compa-

ny During the following year he was promoted to senior vicepresident His ascension continued in 1991, when he wasnamed executive vice president of General Mills with responsi-bility over both Yoplait yogurt and Big G cereals as well as In-ternational Foods

ASSUMED POSITION OF PRESIDENT, THEN CEO OF

GENERAL MILLS

Sanger was named to the General Mills board of directors

in 1992 He earned a reputation as a sharp marketer of

con-sumer goods He was also known for his sense of humor and

interpersonal skills In 1993 Bruce Atwater, chief executive

of-ficer of General Mills, was nearing the company’s mandatory

retirement age, and Sanger was one of three vice chairmen who

were believed to be potential successors Sanger became the

heir apparent in 1993, when company announced that Sanger

had been elected to the position of president

Sanger’s relaxed demeanor caused some analysts to

ques-tion whether he would be an effective CEO at General Mills

Nonetheless, the company remained confident in his ability to

improve production and sales “Steve was identified as

some-one with great potential,” Atwater told BusinessWeek “He had

interesting ideas about how to develop new products and get

new business” (March 26, 2001) In 1995 Sanger was elected

chairman and chief executive officer of General Mills

CHANGING THE ATMOSPHERE AT GENERAL MILLS

General Mills had long been known as a conservative

com-pany, requiring employees to wear a uniform consisting of a

dark suit and a white shirt Upon taking office, Sanger

imme-diately repealed this requirement He also ordered the

compa-ny jet to play rock-and-roll music instead of classical music

Moreover, on the night before his first board meeting as

chair-man, he chose to attend a Rolling Stones concert He was

known to recite song lyrics in board meetings Said one

asso-ciate, “He’s like a Doris Day of guys” (BusinessWeek, January

8, 2001)

Sanger’s unorthodox philosophy was not limited to dress

codes and flight music Shortly after he became CEO, he

sought to improve productivity by sending technicians to

watch the performance of pit crews at a NASCAR race The

technicians subsequently devised a method for converting a

plant line in 20 minutes, compared to five hours Sanger was

known for being friendly to his subordinates and for

welcom-ing open discussion

Sanger’s relaxed approach belied a more aggressive business

strategy He cut costs in key areas and effectively raised prices

of cereals in the late 1990s without affecting sales The

compa-ny’s sales increased at a rate of 6 percent per year between 1995

and 2001, and in 1999 General Mills surpassed Kellogg

Com-pany as the leading cereal producer

Sanger was recognized and honored within his industry In

2001 he was named one of the “Top 25 Managers” by

Busi-nessWeek, and he received the 2002 William H Albers

Indus-try Relations Award, which recognizes indusIndus-try leadership and

re-in July 2000, the companies had to resolve certare-in antitrust sues with federal regulators This process took 16 months,much longer than originally expected

is-Rivals of General Mills began to make gains General Millslost its market lead in the cereal category to Kellogg in 2001and lost ground in several other categories as well, includingrefrigerated dough and boxed prepared meals Moreover, somecommentators noted the perception that General Mills did notprovide complete support for Pillsbury products

Sanger and General Mills took another hit in 2003 and

2004, when the Securities and Exchange Commission nounced that it would investigate potential violations of feder-

an-al disclosure laws Supporters and even some critics played the investigation, noting that Sanger and General Millswere not likely types to have violated securities laws ThoughSanger maintained his popularity during 2004, the problemsnevertheless tested his mettle as chief executive

down-Sanger was active in business and civic groups, serving onthe boards of Target Corporation, the Donaldson Company,Catalyst, the National Campaign to Prevent Teen Pregnancy,the Minnesota Business Partnership, Grocery Manufacturers

of America, and the Guthrie Theatre Foundation

See also entries on General Mills, Inc and Proctor & Gamble Company in International Directory of Company Histories.

SOURCES FOR FURTHER INFORMATION

Forster, Julie, “General Malaise at General Mills,” BusinessWeek,

July 1, 2002, p 68

———, “The Lucky Charm of Steve Sanger,” BusinessWeek,

March 26, 2001, p 75

Kennedy, Tony, “Steven W Sanger Named General Mills

President,” Star Tribune, October 26, 1993.

“Sanger Receives Albers Award for Industry Service,”

Supermarket News, May 13, 2002, p 17.

St Anthony, Neal, “The Soldier and the Salesman,” Star

Born: 1955, in Fort Thomas, Kentucky.

Education: Harvard University, BA, 1977; Harvard

University Graduate School of Business Administration,

MBA, 1979

Family: Son of a mechanic and a housewife; married;

children: two

Career: Kroger Company, 1979–1989, various

management and planning positions; Staples,

1989–1991, various positions including regional vice

president for operations; 1991–1994, executive vice

president of Contract and Commercial Division and vice

president of Direct Sales Division; 1994–1997,

president of Contract and Commercial Division;

1997–1998, president, North American Operations;

1998–2002, president and chief operating officer;

2002–, president and chief executive officer

Address: Staples, 500 Staples Drive, Framingham,

Massachusetts 01702; http://www.staples.com

■ Ronald L Sargent moved up the ranks of Staples to become

its president and chief executive officer (CEO) in 2002 After

more than a decade of holding various positions in the

corpo-ration, he became CEO during a critical time in the company’s

history Profits and stock prices had stalled after years of

growth, and analysts were predicting a bleak future for

office-supply superstores Sargent’s leadership and notorious frugality

paid off, however A smooth transition to the role of CEO was

highlighted by effective cost-cutting measures while

successful-ly exploiting growth opportunities, ultimatesuccessful-ly leading Staples

to outpace the industry in operating profit margins

ROLLER DERBY OR HARVARD?

Ron Sargent’s career in retail sales began when he was a

teenager working the cash register and stocking shelves for a

Ron Sargent AP/Wide World Photos.

Kentucky branch of the grocery-chain Kroger Choosing vard over a position on a professional Roller Derby team, Sar-gent eventually returned to Kroger where for ten years he heldmanagement positions in operations, human resources, strate-

Har-gy, sales, and marketing Referring to his decision in 1989 toleave one of the largest grocery chains in the nation to join thethen small and barely profitable Staples, Sargent told his wifethat either it would be the greatest thing he had ever done or

he would find himself unemployed within the year Time hasproven his first instinct to be true

A SMOOTH TRANSITIONBefore Sargent took over the role of CEO from Staples’schairman and founder, Thomas G Stemberg, the two ap-proached Microsoft’s chairman and founder, William H

Gates, and his new CEO, Steven A Ballmer, for advice Gates

and Ballmer had recently gone through a similar transition

themselves Ballmer, a classmate of Sargent’s from Harvard,

urged Sargent and Stemberg to proceed with the transition in

spite of the gloomy economic outlook and stalled profits of

2001 Sargent had already proven himself an effective leader

when in 1990 he was asked to take over the Contract Division,

which was responsible for selling directly to large and midsize

companies At the time, this division brought in $20 million

to $30 million annually Less than ten years later, the unit had

ballooned to $3.4 billion in revenues and accounted for

Sta-ples’ highest operating profit margins As CEO, Sargent led

Staples to the front of the office-supply business, outpacing the

industry in a number of areas

A FRUGAL FOCUS ON EVOLUTION

Sargent compared himself to the 1992 Toyota Camry with

over 100,000 miles on it that he drove: steady, inexpensive,

and deadly reliable He kept key financial data inside an aged

file folder that was heavily taped to hold it together This

thriftiness did not translate into skimping, however, nor did

Sargent plan to implement a whole new vision or strategy for

Staples as CEO One of the key ideas that remained with him

from his days at Kroger was that “everything starts with the

customer.” Sargent recognized that in order to improve Staples

and allow it to evolve naturally he would have to cut costs

while neglecting neither the customers nor the company’s sales

associates In an interview with American Executive, he

ex-plained the logic behind cutting costs while increasing

spend-ing on people: “If you treat your associates well, they’re gospend-ing

to treat the customers well, and that’s going to treat the

stock-holders well It’s a virtuous circle.”

After taking over as CEO, Sargent refocused Staples in a

number of ways More attention was paid to the small-business

and home-office customers that research showed were Staples’s

core base and who typically shopped for higher-priced items

with higher profit margins Staples rechanneled some of its

marketing budget away from newspaper inserts and into direct

marketing in order to better target these customers The

com-pany eliminated over 800 less-profitable items aimed more at

the casual consumer, including novelty pens, cartoon

note-books, and inexpensive telephones and shredders, and added

over 400 items targeted at the small-business customer, such

as multiline telephones, large filing systems, and bulk items

Sargent used his experience in the grocery business, where

pri-vate-label brands play a big role, to expand the Staples

store-brand product mix

Eliminating low-margin items allowed Staples to reduce its

inventory and its number of vendors while still maintaining

its focus on customers In a BusinessWeek Online interview,

Sargent explained, “We’re going to squeeze the daylights out

of every imaginable cost except two: We are not going to cutback on marketing, and we are not going to cut back on in-store service In fact, we’re spending more in both of theseareas.” In keeping with his reputation as an aggressive cost-cutter, within his first few months as CEO, Sargent set up 45task forces to find savings anywhere they could, from negotiat-ing price cuts with vendors, to lower rents on building leases,

to paper expenses One change that helped Staples to raise itsoperating profit margins was to open up its vendor-biddingprocess to an online-auction format Where previously theywould have two or three suppliers bid on a specific job, such

as providing plastic bags for the register area, the auction format brought in triple the number of bids and ulti-mately saved the company millions of dollars

online-Pulling back on store-expansion plans, Sargent closedstores in smaller towns and opened new ones in metropolitanareas where they already had a presence This strategy allowedmarketing dollars to be stretched further and higher-volumeoutlets to thrive Additionally, approximately one-fourth ofthe stores were remodeled to look more like boutiques thanwarehouses, reflecting Staples’s newly intensified focus on cus-tomer service Customers could move around more easily andfind items more quickly, and the overall supply-chain process-

es benefited as well Initially, this new store format outsold itswarehouse-styled counterparts by 8 percent

HANDS-ON APPROACH TO CUSTOMER ANDEMPLOYEE SATISFACTION

Sargent liked to keep up with what was happening at thestore level by visiting, unannounced, up to three hundred Sta-ples stores every year On his first day as CEO he paid a visit

to the original store in Brighton, Massachusetts, to work thefloor dressed in the same red shirt and black pants worn by all

of the sales associates He also visited the competition Thishands-on approach allowed him to observe how changes wereaffecting the day-to-day life of both customers and sales asso-ciates Sargent eased Staples’s 30-day return policy; he wantedassociates to have the flexibility to use their best judgmentrather than be held to hard-and-fast rules He personally e-mailed clients and once cinched a large bank contract when

he impressed the bank president by answering his own phone.Sargent began volunteering at the starting line of the BostonMarathon in 1991, promoting his company by passing outStaples-branded giveaways

In addition to personal visits from the CEO, Staples begankeeping track of customer satisfaction through the mystery-shopper program begun under Sargent A mystery shopperrated each store every month and associates received bonusesbased on the scores Overall store scores improved steadily as

a result of this program, reflecting increased customer service.Staples began offering a reward program to its customers,using its sophisticated customer-management system to offer

Ron Sargent

items of interest and possible savings based upon a customer’s

past preferences And to better serve Staples’s direct-delivery

customers, Sargent reorganized the sales force into “hunters,”

who acquired new accounts, and “farmers,” who serviced the

accounts, with both groups having more time to spend with

customers

In his early days as CEO, Sargent also worked to broaden

Staples’s commitment to corporate responsibility He

respond-ed to pressures from environmental groups on the entire

in-dustry by making environmental leadership a goal for Staples

and working to create demand for recycled products He also

worked to start the Staples Foundation for Learning and

sup-ported other charitable organizations related to education and

youth

OPPORTUNITIES FOR GROWTH

Sargent continued to cut costs while seeking potential

growth areas Staples began opening stores in Europe in 1991;

as of early 2004 European stores accounted for 12 percent of

sales but only 6 percent of profits Shortly after becoming

CEO, Sargent executed Staples’s successful acquisition of the

French mail-order business Guilbert He replaced Americans

with Europeans as heads of European store operations,

recog-nizing that success in Europe required a cultural familiarity

that had been lacking under the previous model He also

con-tinued to look for expansion opportunities to boost

profitabili-ty Other areas targeted for growth by Sargent included

Sta-ples’s copy-center operations, its contract sales to largecompanies, and its delivery operations to small businesses inEurope and the United States

See also entries on The Kroger Company and Staples, Inc in International Directory of Company Histories.

SOURCES FOR FURTHER INFORMATION

Eyriey, Nick, “The Executioner: Does Staples’ Move to the

Top of the Sales Charts Signal a New Order?” Office

Products International, April 2003, p 31.

Fasig, Lisa Biank, “CEO Returns Staples Chain to Winning

Ways of Its Past,” Knight-Ridder Tribune Business News,

Symonds, William C., “Thinking Outside the Big Box,”

BusinessWeek, August 11, 2003, pp 62–64.

—Celia A Ross

Ron Sargent

■ ■ ■

Arun Sarin

1954–

Chief executive officer, Vodafone Group

Nationality: Indian, American

Born: October 21, 1954, in India

Education: Indian Institute of Technology, BS, 1975;

University of California at Berkeley, MS, 1977, MBA,

1978

Family: Son of Krishan Sarin (military officer) and Ramilla

(maiden name unknown); married Rummi Anand

(homemaker); children: two

Career: 1978–1981, management consultant,

environmental analyst; Natomas Company,

1981–1984, corporate development manager; Pacific

Telesis Group, 1984–1994, various positions including

corporate development, chief financial officer, chief

strategic officer, vice president, and general manager;

AirTouch Communications, 1994, vice president of

human resources; 1994–1995, senior vice president of

corporate strategy and development; 1995–1997,

president and chief executive officer; 1997–1999,

president and chief operating officer;

Vodafone-AirTouch, 1999–2000, chief executive, U.S.-Asia

Pacific region; InfoSpace, 2000, chief executive officer;

Accel-KKR Telecom, 2001–2003, chief executive

officer; Vodafone Group, 2003–, chief executive officer

Awards: University of California at Berkeley, Haas School

Business Leader of Year, 2002; University of California

Trust (UK) Award, 2003

Address: Vodafone Group, Vodafone House, The

Connection, Newbury, West Berkshire, RG14 2FN,

United Kingdom; http://www.vodafone.com

■ Arun Sarin spent almost his entire working life in the

tele-communications industry He built an enviable professional

record by combining various talents and skills: his technical

knowledge, his business strategy, and his financial acumen

were all legendary He held several senior-executive-level

posi-tions in major U.S companies in the telecommunicaposi-tions

in-dustry At times, his ascension into top-management positions

appeared almost meteoric Described by superiors and

indus-try analysts as possessing determination and drive, he received

Arun Sarin AP/Wide World Photos.

high marks for his work in the preparation and financial ses for business mergers and acquisitions in the growing tele-communications industry His July 30, 2003, appointment aschief executive officer (CEO) of Vodafone, a multibillion-dollar British international wireless-communications compa-

analy-ny, was a tribute to his life’s work and testimony to his broadappeal and respect among various constituents

THE EARLY YEARSArun Sarin was born in India to a once-wealthy family.When the British granted sovereignty to India in 1947, hisfamily lost its wealth In order to sustain a solvent financial po-sition for their families, Sarin’s father and uncles joined the In-dian military His father held the rank of lieutenant colonel

in the Indian military Sarin attended a military boarding

school in Bangalore, India, as a young boy Early on he proved

himself to be a very disciplined student School played an

im-portant part of his life and set the tone for his future career

While in high school Sarin excelled in scholarship and sports,

including field hockey, gymnastics, and boxing His

accom-plishments gave him a sense of purpose and discipline that

continued into adulthood He wanted to follow his father’s

footsteps into the military by pursuing a career as a pilot, but

his mother vehemently protested this choice fearing that he

could be killed in a future military conflict To appease his

mother, Sarin, an extraordinarily gifted student, especially in

mathematics, applied to the Indian Institute of Technology

(IIT), a highly competitive elite university in Kharagpur,

India He was accepted at IIT and chose engineering as his

major He graduated in the top 10 percent of his class and

re-ceived the B C Roy gold medal for academic excellence

Upon graduation from the IIT in 1975 with a bachelor of

science degree in engineering, Sarin received a full scholarship

to the University of California, Berkeley, Graduate College of

Engineering For the Indian-born Sarin, California would

be-come his adopted home and the United States his adopted

country While pursuing his engineering degree Sarin met his

future wife, Remmi, also an Indian and a graduate student

She persuaded him to enroll in a finance course in the business

school He performed so well that he decided to pursue an

MBA majoring in finance concurrently with his engineering

degree In 1977 he was awarded a master’s degree in

engineer-ing, and the following year he received his MBA The dual

de-grees gave him a competitive edge in seeking employment and

bolstered his career over time

GROWING UP IN THE WIRELESS INDUSTRY: ALL IN

THE FAMILY

Sarin started his professional life in 1978, working as an

en-vironmental analyst for a Washington, D.C., consulting firm

In 1981 he returned to California to join the Natomas

Com-pany in San Francisco as a corporate development manager

A few years later Sarin entered the telecommunications

indus-try, a field he chose by design: “When I graduated I went into

the energy industry because it was hot the consultancy I

worked for was acquired and in 1984 I looked at the world

and saw that telecoms was hot so I joined Pacific Telesis”

(Communications Week International, September 11, 2000) At

Pacific Telesis Group, a Bell spin-off, Sarin met and started

working closely with Sam Ginn, the legendary

telecommuni-cations entrepreneur, who helped steer Sarin’s management

career in the industry As a new employee in the industry, his

background in finance facilitated his work on cellular-business

acquisitions

Sarin worked with Pacific Telesis in various professional

and executive positions for 10 years, receiving several

impor-tant promotions, assuming increasing levels of administrative

responsibility, and expanding his executive experience Hestrengthened the internal financial controls at the company,and Ginn promoted him to chief financial officer after thecompany completed a major acquisition Soon he was appoint-

ed vice president of corporate strategy, and at the age of 35 hebecame the youngest corporate officer at Pacific Telesis Sarinleft the company in 1994 when it split its mobile and pagingbusinesses He followed his mentor Ginn to a newly formedwireless-communications company, AirTouch Communica-tions

BUILDING SENIOR EXECUTIVE LEVEL EXPERIENCESarin had a unique opportunity to hone his executive tal-ents at AirTouch Communications, one of the largest cellularcompanies in the world His initial appointment was as vicepresident of human resources In less than a year he was pro-moted to senior vice president of corporate strategy and devel-opment, a position that fit him exceedingly well His responsi-bilities included working on corporate acquisitions, developingpartnerships, and forming strategic alliances with other com-panies throughout the industry

Sarin’s dedication and commitment to AirTouch weredemonstrated by the following incident: While celebrating his40th birthday at a party, he received word that a major dealwas brewing between corporate competitors that had seriousimplications for AirTouch’s future existence Despite beingthe honored guest, Sarin left the celebration to assess the prob-lem and to try to influence its outcome As a result of his directintervention, the deal was compromised

Hard work and company loyalty paid off well for Sarin Hecontinued moving up the corporate ladder very quickly In lessthan a year as corporate vice president he was appointed presi-dent and chief executive officer of the company Under hisleadership at AirTouch, the company established cellular andpaging businesses in more than a dozen countries In 1997Sarin was promoted to president and chief operating officer ofAirTouch, a position he held for approximately two years

In 1999 AirTouch and Vodafone, a large British communications company, decided to join forces to create Vo-dafone-AirTouch, which produced greater financial andhuman resources and enabled the company to compete moreeffectively in the international wireless-communications mar-ketplace Sarin was named chief executive of the newly formedcorporate entity, responsible for managing operations in theU.S.-Asia Pacific region and for some 20,000 employees Inorder to expand services, Sarin, with his years of experiencepartnering with other companies, created a strategic alliancewith InfoSpace, an Internet infrastructure company based inBellevue, Washington, “to deliver wireless Internet services tomobile customers” who resided in some two dozen countries(Advisor.com, January 11, 2000)

wireless-Arun Sarin

Sir Christopher Gent, the fairly young CEO of Vodafone,

had always expressed the greatest respect for Sarin’s financial

abilities and managerial and leadership skills He understood

Sarin’s value to the newly formed company and wanted Sarin

to continue to his employment Sarin wanted to add the

posi-tion of chief operating officer (COO) to his corporate resume

as a step toward becoming the CEO of Vodafone one day, but

Gent decided that there was no pressing need to create the

po-sition of COO at the company Faced with this decision and

the fact that the youthful Gent would likely remain CEO for

many years, Sarin concluded that his path to top was blocked,

and he was unwilling to take a lesser role in the company’s

hi-erarchy On April 15, 2000, Sarin resigned from

Vodafone-AirTouch and took the CEO position at InfoSpace Hedging

his bets, Gent then offered Sarin a nonsalaried position as a

member of the board of directors at Vodafone-AirTouch, a

po-sition that Sarin willingly accepted

THE INFOSPACE EXPERIENCE

InfoSpace’s founder, CEO, and chairman, Naveen Jain, by

several accounts “badgered” Sarin until he accepted the CEO

position at the company Said Sarin: “Naveen kept coming up

and bugging me This is classic Naveen, he comes at you and

at you and at you I’m 45, there’s a time in life when you

have done what you’re going to do; it’s time to take a bigger

chance” (TheStreet.com, April 19, 2000) Despite his easy

transition into the CEO position at InfoSpace, however, Sarin

expressed concerns about his ability to balance work and

fami-ly life He was worried that his new position might impact

neg-atively on his family, which chose not to move from their

home in Piedmont, California, to Bellevue, Washington, the

headquarters of InfoSpace

Jain had the utmost respect for Sarin’s abilities in the global

telecommunications business, and Sarin complemented Jain’s

knowledge of the Internet As CEO, Sarin had an external role,

developing partnerships with global companies, and an

inter-nal role that focused on recruiting and strengthening the

man-agement team at InfoSpace Sarin led the merger of InfoSpace

and Go2Net, a consumer-portal company, for approximately

$4 billion in a stock swap

After a short eight-month tenure at InfoSpace, Sarin

re-signed, citing family obligations, which included weekly travel

from his home in Piedmont to InfoSpace headquarters in

Bellevue Although family matters undoubtedly played a

sig-nificant role in his decision to leave the company, there was

talk among industry analysts about discontent at the top Jain

asked Sarin to remain at the company in a nonexecutive

capac-ity, as vice chairman of the board of directors, a position that

he accepted Sarin agreed to meet with customers and not to

seek employment at another company for 180 days Despite

his willingness to stay with InfoSpace as a nonexecutive

direc-tor, several industry analysts raised strong concerns aboutSarin’s unexpected early departure from InfoSpace and the fu-ture of the company without his leadership

JOINING ACCEL-KKR TELECOMAfter leaving Infospace in January 2001, Sarin spent sometime collecting his thoughts Despite the fact that he was quitewealthy by now, he refused to lead a simple sedentary life out-side of corporate life On July 18, 2001, having honored hisagreement with InfoSpace, Sarin joined Accel Partners andKohlberg Kravis Roberts (KKR) to lead a new telecommunica-tions venture called Accel-KKR Telecom As CEO of this newventure, Sarin was responsible for identifying and workingwith established companies in the telecommunications indus-try seeking financial and human capital

Upon Sarin’s appointment, Paul Hazen,chairman of KKR Telecom, described Sarin’s management and leadershiptraits: “His ability to manage, operate, and achieve real world,hands-on results will be invaluable in attracting significant in-vestment opportunities and distinguish Accel-KKR from otherinvestment partnerships in the telecom space” (Accel-KKRpress release, July 18, 2001) As with earlier appointments,Sarin’s background in finance and his broad experiences in thetelecommunication industry made him a natural choice forthis new position Under his watch as CEO, Sarin assessed po-tential global business opportunities and worked on the acqui-sition of the Yellow Pages (Bell Canada) business In addition,

Accel-he served as a nonexecutive director on several major corporateboards of directors, including Charles Schwab, Cisco Systems,The Gap, and Vodafone After approximately 18 months atAccel-KKR Telecom, Sarin resigned to become CEO desig-nate his old firm, now called Vodafone Group

RETURNING TO VODAFONE AS CEOUnder the leadership of Sir Christopher Gent, the Voda-fone Group made a number of significant and strategically im-portant corporate acquisitions In 2002, while only in his early50s, Gent decided to retire as CEO to spend more time withhis family On December 18, 2002, Lord Ian MacLaurin, thechairman of Vodafone, called on Sarin to rejoin the company.His appointment as CEO designate began on April 1, 2003.MacLaurin said of Sarin’s appointment, “I am delighted thatArun Sarin has made the commitment to take the Group for-ward to the next phase, and that we have identified an individ-ual with the ability, stature, and knowledge of Vodafone whichmake him the ideal person for this role” (Vodafone press re-lease, December 18, 2002)

Sarin’s appointment drew mixed reviews from nications analysts Andrew Darley, an analyst at ING FinancialMarkets, raised concerns about Vodafone’s financial picture:

telecommu-Arun Sarin

“We would like to see a continuing cash flow from existing

op-erations as opposed to a continuing acquisition strategy.”

Sarin’s finance background undoubtedly gave him the ability

to work on maintaining a positive cash flow On the other

hand, despite his many excellent leadership attributes and his

wealth of executive experience in the telecommunications

business, one analyst questioned his appointment as a

replace-ment for the retiring dealmaker Gent Damen Maltarp, a

tele-communications-industry analyst at Bank of America,

com-mented, “I wouldn’t class him as the ideal replacement for

Chris Gent I think a lot of people will be asking who he

is.” Other analysts gave Sarin high marks as Gent’s successor

due to his education and experience, his previous experience

at Vodafone, and the seamless leadership succession and

transi-tion that his appointment created for the company Darley

commented that “effectively he has been part of the global

business strategy This means continuity in strategy and we

like the company as it is” (BBC News, December 18, 2002)

After several months as CEO designate, Sarin was installed

as the CEO of Vodafone on July 30, 2003 After only a month

in office, he returned to the business of mergers and

acquisi-tions He engineered the acquisition of Singlepoint, a

mobile-service provider who offered mobile-services to Vodafone customers,

for $652 million Several months later, as part of the corporate

strategy to move Vodafone into the U.S market, Sarin

vigor-ously pursued the acquisition of AT&T Wireless Services, but

he lost a bidding war with Cingular

See also entry on Vodafone Group Plc in International Directory of Company Histories.

SOURCES FOR FURTHER INFORMATION

“Accel and KKR Form New Telecom Venture; Name ArunSarin Chief Executive Officer,” http://www.accel-kkr.com/news/releases/release_071801.html

“Deal Boosts Wireless Internet Services,” Advisor.com, http://

accessadvisor.net/doc/05933

Galambos, Louis, and Abrahamson, Eric, Anywhere, Anytime:

Entrepreneurship and the Creation of a Wireless World, New

York: Cambridge University Press, 2002

Johnson, Cory, “InfoSpace Lands a New Pilot,” TheStreet.com,

April 19, 2000, http://www.thestreet.com/

Malin, George, “The Art of Starting Small But Thinking Big,”

Communications Week International, September 11, 2000.

“Vodafone Chief Seps Down,” BBC News, December 18,

Education: Waseda University, BS, 1960.

Career: Mitsubishi Corporation, 1960–1966, engineer in

machinery division; Mitsubishi International, 1966,

manager; Mitsubishi Corporation, 1966–1971,

manager; 1971–1977, heavy machinery department;

Mitsubishi International Corporation, 1977–1979,

head; 1979–1981, president; 1981–1985, heavy

machinery department; 1985–1989, general manager,

heavy machinery department; 1989–1991, general

manager, ship and plant division; 1991–1993,

executive vice president; 1993–1998, president and

chief executive officer; Mitsubishi Corporation,

1994–1998, managing director; 1995–1998,

managing director of administration; 1998–2004,

president and chief executive officer; 2004–, chairman

of the board

Address: Mitsubishi Corporation, 6-3 Marunouchi

2-chome, Chiyoda-ku, Tokyo 100-8086, Japan; http://

www.mitsubishi.co.jp

■ When Mikio Sasaki was hired by the Mitsubishi

Corpora-tion in 1963, it was in a very different economic climate than

the one in which he became the company’s leader In those

days, Mitsubishi sought out the best college graduates and

usu-ally got them; a job with Mitsubishi was not only a secure job

for life but was also an elite job with one of Japan’s greatest

economic powerhouses Yet when Sasaki became president and

chief executive officer of Mitsubishi Corporation, the

compa-ny was losing money by the hundreds of millions of dollars,

and its once proud Mitsubishi Motors was collapsing in

scan-dal and falling income Sasaki introduced sweeping reforms to

corporate organization and governance and dramatically

changed the way Mitsubishi Corporation did business

ENGINEER AND LEADER

The company’s symbol of three diamonds touching at a

point came from Mitsubishi’s name, which means three

dia-monds The company was founded in 1870 as a zaibatsu,

which meant that it was a family-owned holding company Itsfounder was Yataro Iwasaki, a nobleman descended from sam-urai By the 1930s Mitsubishi Corporation had become one

of Japan’s most powerful keiretsu The keiretsu were vast

hold-ing companies composed of numerous small companies thatwere interrelated by doing business with each other and that

usually owned shares of each other Member companies of retsu were expected to do business with each other first and to

kei-consult with each other before doing business with outsiders

Although young for a keiretsu (for instance, Sumitomo’s

ori-gins date to the early 1600s), Mitsubishi had become a

domi-nating collection of industries It and the other keiretsu were

blamed by many for the militarism of Japan that instigated

World War II, and the power of the keiretsu was curtailed by

the United States after World War II

By April 1960, when Sasaki joined the company after ing earned a BS degree in industrial engineering and manage-ment from Waseda University in Tokyo, Mitsubishi Corpora-tion had recovered much of its economic power and wascomposed of hundreds of subsidiaries that were linked notonly by cross-shareholdings but also by a common corporateculture in which employees were cultivated like family, seniori-

hav-ty ruled most promotions, and total income mattered morethan profits Sasaki had a strong scientific bent to his thinking,and over many years he distinguished himself in scientificstudies of new technologies In March 1966 he was briefly as-signed to Mitsubishi International in Duesseldorf, West Ger-many In November 1966 he was transferred to the Londonbranch of Mitsubishi Corporation in an era in which Mitsu-bishi was trying to expand its partnerships with British indus-tries

In November 1971 Sasaki was transferred to Tokyo towork in the heavy machinery department of Mitsubishi Cor-poration In November 1977 he was sent to Tehran as chief

of the Iranian operations of Mitsubishi International tion (a subsidiary of Mitsubishi Corporation); in September

Corpora-1979 he was made president of Mitsubishi International poration, Iran He gained a strong background in the oil andnatural gas business that would serve him well in the 2000s,when he expanded Mitsubishi’s oil operations in Russia andnatural gas operations in Alaska

Cor-THE ECONOMIC BUBBLE

Historians often referred to the 1980s as an economic

bub-ble for Japanese businesses because Japanese companies

seemed very wealthy but proved to be fragile when the bubble

eventually burst In June 1981 Sasaki was transferred back to

the heavy machinery department in Tokyo In 1984 the

Mit-subishi keiretsu pooled its resources to buy shares of its

Mitsu-bishi Oil Company when the U.S company Getty Oil

compa-ny tried a hostile takeover of the petroleum development

company This practice was common for Mitsubishi

Corpora-tion; it owned banks, life insurance companies, and other

po-tential lending companies, and when a member of the keiretsu

was threatened by an outsider or by financial losses, the

finan-cial companies would lend it money, and other members of

the keiretsu would buy shares in it to protect it.

In February 1985 Sasaki was named the general manager

of the heavy machinery department In July 1989 he was

ap-pointed general manager of the ship and plant division, a

com-plex interrelationship of keiretsu companies that included the

manufacture of luxury ocean liners During the 1970s and

1980s many American journalists were alarmed by Japan’s

in-creasing economic influence in the United States, and

politi-cians found the issue of Japanese influence to be one that

stirred the emotions of American audiences Mitsubishi

Cor-poration fueled the alarm in 1989 by buying 51 percent of

Rockefeller Center in New York City Mitsubishi Motors had

a 27 percent increase in its share of the automobile market in

the United States that year, and Mitsubishi Corporation’s

elec-tronics companies were gaining large shares of global markets

In Japan this phenomenon was called “Mitsubishification.”

Yet the signs of troubles were present Predicted

domina-tion of computer chips by Japanese companies failed to come

to pass while such American companies as Intel, AMD, and

Cyrex all surpassed Japan’s state-subsidized computer

compa-nies Mitsubishi Corporation made a costly gaffe by insisting

on using a proprietary computer operating system rather than

one produced by Microsoft, Apple, or IBM; in the 1990s this

misjudgment would cost Mitsubishi most of Japan’s own

com-puter consumers

SASAKI, THE LEADER OF THE FUTURE

In March 1991 Sasaki became executive vice president of

Mitsubishi International Corporation and was stationed in

New York City, where his fluency in English would be of good

service In 1992, although he remained in America, Sasaki was

named to the board of Mitsubishi Corporation, which meant

that he was by then considered to be a major player in

corpo-rate governance What Sasaki found was a board looking for

a plan, with the Mitsubishi Corporation moving from one

small crisis to another, as some member companies struggled

to survive at home against strong competition from American

and European companies, even though the Japanese ment protected most Japanese industries with high tariffs andsometimes prohibitions against foreign products

govern-In April 1993 Sasaki was named president and CEO ofMitsubishi International Corporation In this position he in-vested Mitsubishi’s time and money in new technologies, oftenwith extraordinary foresight For example, in 1993 he beganMitsubishi Corporation’s research and development in fulle-renes, which were molecular clusters of carbon, forming closedshells that Sasaki described as looking like soccer balls Tenyears later Sasaki would say that he could still recall the mo-ment a staff member told him about fullerenes, rememberingthat he instantly was taken by the potential of the arcane field

of study He took direct charge of the research and ture of fullerenes for all the rest of his career at Mitsubishi Infullerenes Sasaki envisioned the emergence of nanotechnology,

manufac-a field of microscopic mmanufac-achines Under Smanufac-asmanufac-aki’s lemanufac-adershipMitsubishi developed manufacturing techniques that in the2000s made Mitsubishi the only mass producer of fullerenes,which had a host of applications from cures for some cancersand treatments for other diseases to the manufacturing ofsuper-strong composites of metals and polymers To developthe possibilities of polymers, Sasaki did something that wasvery rare for Mitsubishi Corporation—he forged partnerships

with companies outside of the keiretsu.

In June 1994 Sasaki was made a managing director of subishi Corporation This position meant more than being amember of the board of directors; Sasaki had management re-sponsibility for some of the company’s operations, beyond hiscontinuing responsibilities as president and CEO of Mitsu-bishi International Corporation In June 1995 his responsibili-ties were further defined as managing director of administra-tion for Mitsubishi Corporation At the time, the parent

Mit-company of the keiretsu, Mitsubishi Corporation, had about

eight thousand employees, most of whom were older men whohad spent decades rising through the ranks on the basis of se-niority They managed the bewildering mix of hundreds ofcompanies that were separate entities within Mitsubishi Cor-poration, and Sasaki was responsible for overseeing the organi-zation and communication of these senior managers

In 1997 Mitsubishi Corporation began to unravel It hadinvested heavily in Thailand and Malaysia, especially in auto-mobile manufacturing, and in 1997 Thailand suffered a cur-rency crisis so severe that many of Mitsubishi’s holdings inThailand became almost worthless The crisis quickly spreadthroughout Southeast Asia Mitsubishi Motors, in particular,had to swallow multimillion-dollar losses The devaluation ofAsian currencies continued into the 2000s, damaging Mitsu-bishi Corporation’s ambitions to develop Asian marketplaces

In April 1998 Sasaki was named president and CEO ofMitsubishi Corporation; a Mitsubishi Corporation presidentwas expected to serve three consecutive two-year terms and

Mikio Sasaki

then leave the post, and Sasaki was a logical choice to be the

new president, given his extensive experience in foreign

mar-kets and his reputation as having a steady temperament and

sound judgment Of interest was the title of CEO The

chair-man of the board had previously had the powers of a CEO,

which meant that naming Sasaki to the new position of CEO

was a break with tradition and an indication that he was to be

given the powers to redirect, to reorganize, and to redefine

Mitsubishi Corporation, which was in desperate financial

trouble, although how desperate would not become public for

another couple of years

KEEPING THE KEIRETSU ALIVE

In 1998 Mitsubishi Electric, which had made the blunder

in computer operating systems, lost $870 million Mitsubishi

Rayon, Japan’s largest manufacturer of artificial fibers, was

downgraded by ratings companies to the status of a junk stock;

the heavy equipment division and 12 other units were

down-graded to near-junk stock status During the summer, without

asking the parent company’s permission, as was theoretically

required, Mitsubishi Corporation’s Nikko Securities

Compa-ny found an outside ally in the American compaCompa-ny Citigroup,

which bought 25 percent of Nikko Securities for $1.8 billion,

helping Nikko Securities stay afloat Perhaps this move was an

example of Sasaki’s creating for members of the keiretsu new

freedom to take action, although corporate insiders said that

within the keiretsu the action of Nikko Securities was regarded

as a betrayal

As Sasaki saw matters, he was faced with a failing business

model caused by a number of factors, including the Asian

cur-rency crisis, which had collapsed Mitsubishi Corporation’s

earnings; obsolescence of trading companies, caused by

Inter-net commerce; and a collapse of Japan’s social system, one

ef-fect of which, he believed, was not just to make the practice

of promotion by seniority obsolete but also to make

promo-tion by seniority a handicap for competing in the global

mar-ketplace In 1998 Sasaki launched MC2000, a plan to correct

some of Mitsubishi’s Corporation’s problems by the end of

2000 He wanted not just to reform the company but to

trans-form it, and MC2000 was just the beginning of his broad

am-bition for the company He regarded Mitsubishi Corporation

as a sogo shosha, a trading company, and he viewed electronic

commerce as the transforming power in trading on a global

scale

Sasaki wanted, he said, “to encourage management and

employees to abandon precedent and embrace

self-transformation as the way forward in the 21st century”

(“Mitsubishi Corporation,” October 3, 2003) Part of this

transformation was to be achieved by radically changing the

management personnel of Mitsubishi Corporation Sasaki laid

off two thousand of the parent company’s eight thousand

em-ployees, and he abolished the seniority system for promotions,instead instituting a merit-based program not only for promo-tions but also for cash bonuses This reform was resisted

throughout the keiretsu but by 2000 had also resulted in

nu-merous managers in their early forties gaining positions ofcommand; it was Sasaki’s goal to promote people into respon-sible positions at the best time for them, to give each individualemployee the chance to do his or her best when he or she wasbest prepared to do so To carry out this plan, it was necessary

to restructure communications in the company so that uppermanagement would be aware of how employees were perform-ing It also meant a reform in record keeping because employeeperformance had to be monitored

On June 26, 1998, Sasaki tried to explain his actions to vestors and business analysts, declaring that he intended tocreate a company that was a global leader by developing its cor-porate strategy, by improving its decision-making processes, byboosting its appeal to creative and accomplished potential em-ployees by creating an attractive environment for people of allnationalities, and by making it a value-driven company thatserved shareholders and partners He saw the global economy

in-as the place where a future Mitsubishi Corporation wouldthrive by including employees from cultures other than Japa-nese and giving them the conditions and resources in which

to thrive personally

In February 1999 Mitsubishi Electric said that it would lose

$330 million for the fiscal year In March 1999 MitsubishiMaterials Corporation and Mitsubishi Chemicals Corporationeach projected losses of $200 million The Bank ofTokyo–Mitsubishi Ltd had to raise an emergency $2 billion

from other members of the keiretsu in order to keep from

fail-ing Mitsubishi Corporation’s debt was over $132 billion Thisnews was serious for Japan as a whole because Mitsubishi Cor-poration accounted for 8 percent of the gross national product.Japan’s economy was flatlining, meaning no growth, and such

keiretsu as Dai-Ichi Kangin, Fuyo, Mitsui, Sanwa, and

Sumito-mo were suffering, too, in part because of poor coordinationamong member companies Sasaki responded by cutting andreshaping Mitsubishi Corporation businesses and even allow-ing new alliances, such as Mitsubishi Oil’s merger outside theMitsubishi keiretsu with Nippon Oil in April 1999 Sasaki alsochanged how corporate success was to be judged Previously

most of Japan’s keiretsu had treated gross as more important

than net; this approach was one reason why they were huge,perhaps bloated—during the 1970s and 1980s they acquirednew businesses just to increase their sales Sasaki introduced

a foreign idea to Mitsubishi Corporation—a value-added egy that evaluated employees and their businesses on growth

strat-in profits

In the late 1990s Mitsubishi Motors went through an barrassing period during which press reports forced it to revealthat since the 1970s it had covered up design flaws that caused

em-Mikio Sasaki

many of its automobiles to malfunction, sometimes leading to

injury It had used threats and bribes to stop people from

com-plaining about accidents caused by the flaws These revelations

led to dramatic drops in sales in Japan because of a loss of

con-sumer confidence in Mitsubishi products Mitsubishi Motors

was forced to recall over two million vehicles in Japan alone

Even sales of its trucks, once very strong, sagged In 1995

Mit-subishi Motors accounted for 11.4 percent of Japan’s

automo-bile market, but by 2000 its share had declined to 8 percent

and was continuing to fall In 2000 Mitsubishi Motors lost

$750 million on sales of $31 billion and was on its way to

los-ing between $2.21 billion and $2.5 billion for 2000 and 2001

combined

Some journalists and business analysts said that Mitsubishi

Motors was doomed and should go out of business before it

took all of Mitsubishi Corporation with it Instead, Sasaki

looked for a manager who met his requirements for adding

value to his company, and he found Takashi Sonobe, the

lead-er of Mitsubishi Motors’ Amlead-erican oplead-erations; while the rest

of Mitsubishi Motors had declined, its American branch,

under Sonobe’s leadership, had prospered Sonobe was named

president and CEO of Mitsubishi Motors in 2001 Further,

Sasaki and his team found an outsider to help Mitsubishi

Mo-tors: DaimlerChrysler, a German-owned company that had

swallowed up America’s Chrysler and whose official corporate

language was English—a comfortable fit for Sasaki and

Sono-be, who were fluent in English DaimlerChrysler bought 37.4

percent of Mitsubishi Motors for about $2 billion, with the

option to buy all of Mitsubishi after three years, and sent

Ger-man executives to help oversee the company’s return to

profit-ability This plan was part of Sasaki’s vision of a company that

found talent from other countries

REBUILDING

In 1999 Sasaki created a risk management department to

centralize corporate control over investments and loans for

Mitsubishi Corporation’s companies He also established the

Fullerenes International Corporation in 1999 to manufacture

fullerenes; by 2004 it would be manufacturing 40 tons of

fulle-renes per year, and Sasaki himself had direct control of the

re-search and development department of Mitsubishi

Corpora-tion In 2000 he began MC2003 He wanted Mitsubishi

Corporation aggressively to seek out new business partners and

new markets On April 1, 2000, Sasaki established a

depart-ment for organizing information about logistics, marketing,

and finance that he called the “New Business Initiative

Group.” His restructuring of Mitsubishi Corporation became

more coherent as he blended several hundred companies in

four hundred departments into 190 units, uniting them by

strategies and business models There were still a great many

units, but for Mitsubishi it was revolutionary to have a

corpo-rate organization that seemed relatively straightforward Sasaki

drew up charts that showed how all the units were nected, revealing a cohesive corporate structure that could haveone clear, unifying strategy

intercon-Sasaki had become a national leader, helping the Japanesegovernment negotiate trade agreements with Chile and Mexi-

co On an international scale he was trying to help Mitsubishicatch up with the 21st century He said that Mitsubishi Cor-poration needed to understand and share changes in society athome and abroad Doing so was a matter of survival for thecompany, in his view, because in his value-added strategyshareholders’ concerns were paramount, and shareholderswanted environmentally safe, socially responsible companies.Thus he agreed to stop a salt reclamation project in Mexico

to preserve a lagoon, and he sought to enhance the friendlinessfor women employees of Mitsubishi’s companies

Sasaki worked every day He had what he characterized as

1 1/2 free evenings per week, which he devoted to holdingmeetings with no more than 10 employees at a time Holdingthe meetings was an effort to connect with employees person-ally, and he missed only two of those meetings while he waspresident His personal warmth probably helped when he ne-gotiated with Alaska for more Alaskan rights-of-way for pipingliquefied natural gas to Mitsubishi shipping and as he worked

in eastern Russia to secure rights to develop Russian petroleum

fields In China, Mitsubishi keiretsu members forged

partner-ships with financial institutions, a breakthrough for the nese, who were still regarded with suspicion in China for theirdepredations in World War II “‘Investment Trader with Mul-tiple Functions’ might be an apt description of MitsubishiCorporation today,” said Sasaki in 2003 (“Mitsubishi Corpo-ration,” October 3, 2003)

Japa-On April 1, 2004, Sasaki became chairman of the board ofMitsubishi Corporation, his traditional three terms as presi-dent having expired Mitsubishi Motors lost $657 million forthe fiscal year ending in March 2004 Rolf Eckrodt, the Ger-man business leader who was by then president of MitsubishiMotors, asked DaimlerChrysler for $1.8 billion as part of a

bailout plan that included contributions from Mitsubishi’s retsu; DaimlerChrysler refused Sasaki managed to persuade

kei-enough lenders to support Mitsubishi Motors to keep it afloat

See also entry on Mitsubishi Corporation in International Directory of Company Histories.

SOURCES FOR FURTHER INFORMATION

Bremner, Brian, and Emily Thornton, with Irene M Kunii,

“Mitsubishi: Fall of a Keiretsu,” BusinessWeek Online,

March 15, 1999, http://www.businessweek.com/1999/99_11/b3620009.htm

Mikio Sasaki

Sasaki, Mikio, “Message from the President and CEO,”

Born: November 28, 1946, in Vicenza, Italy.

Education: Bocconi University, BA, 1969; Columbia

University, MBA, 1972

Family: Married (wife’s name unknown)

Career: Chevron, 1969–1971, sales manager; Saint

Gobain, 1973–1978, sales manager; 1978–1981,

general delegate to Venezuela, Colombia, Ecuador, and

Peru; 1981–1984, CEO of Italian operations; 1984,

director of Flat Glass division; Technit, 1985–1996,

executive vice president; Pilkington, 1996–1997,

president of Automotive Products; 1997–2002, CEO;

Enel, 2002–, CEO

Address: Enel, Viale Regina Margherita 137, 00198

Rome, Italy; http://www.enel.it

■ In 2002 the Italian businessman Paolo Scaroni took over

at the large energy company Enel The government had been

looking for someone to rescue the failing state-owned

compa-ny in order to prepare it for privatization; Italian authorities

tapped Scaroni because he had previously transformed the

de-clining British glassmaker Pilkington, in the process

establish-ing a reputation as a manager capable of turnestablish-ing around

com-panies in difficult financial situations Scaroni spoke five

languages and worked throughout Europe and the Western

Hemisphere He employed a management style that

demand-ed success from managers in providing them with the proper

organization and motivation

EARLY CAREER

Scaroni was born in 1946 in Vicenza, Italy He attended

Milan’s prestigious Bocconi University, where he obtained a

degree in economics Upon graduating in 1969, he took a job

as a sales manager at Chevron After two years there Scaroni

went to Columbia University to attain his master’s degree in

Paolo Scaroni Maurizio Riccardi/Getty Images.

business administration; when he graduated from Columbia

in 1972, he found a job with the French glassmaker Saint bain Scaroni worked in a variety of positions for Saint Gobainfrom 1973 until 1984, then left the company to work for theindustrial firm Technit from 1985 to 1996 as executive vicepresident

Go-JOINED PILKINGTON

In November 1996 Scaroni joined the British glassmakerPilkington as the president of Automotive Products world-wide Pilkington had brought him in to help meet the de-mands of automakers who wanted to globalize and streamlinetheir purchasing of component parts such as glass Pilkington,founded in 1826, supplied some 20 percent of the glass found

on automobiles around the world It had established its