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MENDOZA IN THE NEWS

Should Groupon's board follow ousted CEO?

by Erik Sherman
Publication: CBS

March 1, 2013


The following is an excerpt from a CBS article that quotes Management Professor Tim Judge about the resent removal of Groupon’s CEO Andrew Mason. To read the entire article visit: Should Groupon's board follow ousted CEO?.

Thursday saw the end of Andrew Mason's tenure as CEO of Groupon (GRPN). The iconoclastic Mason was as unconventional in his announcing his removal -- a tweet on Twitter that led to a public letter -- as he often was in acting as head of the largest of the daily deal sites, which he helped found.

The markets reacted positively, sending the stock up more than 7 percent to $4.85 in midday trading. However, that's far below the $20 IPO price in November 2011. The company faces significant challenges because of the business model and approach it took to operations. All of those were overseen an apparently blessed by the board. The question for investors now is whether Groupon can shore up its finances, create a solid profit, and grow revenue with the same board that has been in place since the company's inception.

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To effectively blame Mason for the company's problems seems to border on scapegoating. As Notre Dame Professor of Management Timothy Judge, who researches management psychology and leadership personality, put it in an email to MoneyWatch:

After all, Mason started the company, but it seems as if that is, in a real sense, being used against him. Moreover, it seems odd to me that the board, who bought into Mason and his plan, not exit with him. Why are they less responsible than he?