Edward Filene: A Social Entrepreneur

Edward Filene was an American social entrepreneur who was known for founding a department store chain, Filene’s. He pioneered credit unions that made trade more dynamic in the US.

Filene was born in Salem, Massachusetts on September 3, 1860. When he was in high school, Filene worked for his father’s store in the evenings, during weekends and in summer breaks. He joined Harvard University but midway through his college education, Filene was forced to quit school to take over the family’s business following his father’s failing physical health. Quitting Harvard was one of Filene’s greatest disappointments.

With the help of his brother Abraham, Filene reorganized his father’s business and formed the William Filene’s Sons Company, which became Filene’s later on. In 1909, Filene introduced the “Automatic Bargain Basement” where unsold items are moved to the basement as the prices go down. When the goods remain unsold, they were donated to charities.

Filene’s management inspiration was Frederick Winslow Taylor. Taylor was known for scientific methods that designed to increase efficiency in the workplace. On his part, Filene refined some underutilized techniques and used them on Filene’s Department Store. His stores dealt with the customers with all honesty, offering to return the customers’ “money back if not satisfied”.

Actually, Filene’s Basement was not the first of its kind in the US. However, the retail designs and the automatic markdowns increased consumers’ excitement and proved to be profitable in the long run. Filene himself oversaw the construction of his first basement located in Boston. His advocacy in consumer education led him to introduce color coding in his department stores.

Filene was also the pioneer in employee relations that many of the modern workers still enjoy today. Some of the employee benefits include profit sharing, minimum wage for female workers, health clinics, the 40-hour work week, and paid vacations. He encouraged unions by creating the Filene Cooperative Association. He also established a savings and loan association for his workers, which was later known as Filene Employees’ Credit Union.