Ben and Jerrys

1
Ben and Jerrys

• Presenters
• Andy Stemmons
• Michael Ryan
• Amy Harriman
• Ethan Erickson
• Joylynn Radtke

2
Main Issue Balancing Social Responsibility and
Profits

• Sub-issues
• When does economic responsibility override
  social responsibility
• Relationship with suppliers?
• Management
• Relationship with media

3
Timeline
4
Timeline
5
Timeline
6
Timeline
Ben and Jerrys has sales exceeding 4 million, a
120 increase from the previous year.
1984
Ben and Jerry fight back against Haagen-Dazs with
Whats the Doughboy afraid of? campaign.
1984
7
Timeline
The foundation is provided with 7.5 of the
companys pre-tax profits. Ben and Jerrys has
sales exceeding 9 million a 143 increase.
1985
The Ben and Jerrys Foundation is established at
the end of the year.
1985
8
Timeline
The company posts sales of just under 20 million
a 100 increase over the previous year.
1986
Dreyers becomes master distributor for Ben and
Jerrys.
1986
9
Timeline
The company posts sales of just under 32 million
up 59 from the previous year.
1987
Ben and Jerry are named to the 1987 Esquire
Register, the magazines annual honor roll of
men and women whose accomplishments , values, and
dreams reflect America at its best.
1987
10
Timeline
As of the end of the year there are more than 80
scoop shops in 18 states. Sales exceed 47
million, up 49 from 1987.
1988
Ben and Jerry are named U.S. Small Business
Persons of the Year by President Reagan in a
White House Rose Garden Ceremony
1988
11
Timeline
Sales exceed 58 million, up 23 from 1988.
1989
Ben and Jerry receives Columbia Universitys
Lawrence A. Wien Prize for corporate social
responsibility.
1989
12
Timeline
To help Vermont Dairy farmers the company pays a
dairy premium of 1/2 million to farmers that
supply milk to the company.
1990
The company enjoys sales of more than 77 million,
an increase of more than 32 over 1989.
1991
13
Timeline
Total sales for 1992 are more than 131 million,
an increase of 36 over 1991.
1991
The company has sales of 97 million, an
increase of 26 over 1990.
1992
14
The Hierarchy of Strategy Levels
Enterprise Level Strategy
Corporate-Level Strategy
Business-Level Strategy
Functional-Level Strategy
15
The Hierarchy of Strategy Levels
Enterprise Level Strategy
To operate the Company in a way that actively
recognizes the central role that business plays
in the structure of society by initiating
innovative ways to improve the quality of life of
a broad community - local, national, and
international.
Social Mission Statement
16
The Hierarchy of Strategy Levels
Corporate-Level Strategy
To make, distribute and sell the finest quality
all natural ice cream and related products in a
wide variety of innovative flavors made from
Vermont dairy products.
Product Mission Statement
17
The Hierarchy of Strategy Levels
Business-Level Strategy
Underlying the mission of Ben Jerry's is the
determination to seek new creative ways of
addressing all three parts, while holding a deep
respect for individuals inside and outside the
Company and for the communities of which they are
a part.
18
The Hierarchy of Strategy Levels
Functional-Level Strategy
To operate the Company on a sound financial
basis of profitable growth, increasing value for
our shareholders, and creating career
opportunities and financial rewards for our
employees.
Economic Mission Statement
19
The Clash of Ethical Systems Between Business and
Government
Business Ben and Jerrys Government
Individualistic Ethic Balanced Ethic
Collectivistic
Maximize Concession to self-interest
Subordination of individual goals and self
interest to group goals interest.
Minimize concession to self-interest and maximize
interest in group goals.
Minimize the load of obligations society imposes
on the individual
Maximize the obligations assumed by the
individual and discouraging self-interest
Balance self-interest and obligations.
Emphasizes inequalities of individuals
Emphasizes equality of individuals
Emphasizes uniqueness of individuals and strives
for harmony among them.
20
Social Gap Model
Ben and Jerrys
Societys Expectations
Avg. Industry Performance
1978
1999
21
Stakeholder Map
22
Primary Stakeholders

• Employees
• Interest
• Stable employment Profit sharing
• Treated and rewarded fairly Fair Pay for work
• Safe, comfortable, and FUN work environment Joy
  Gang
• Affairs affecting women, minorities, gays and
  lesbians on their workforce employee benefits
• Power
• Quitting, striking, unionizing
• Implement new ideas (Recycling)
• Publicity (Community Volunteer Program)

23
Primary Stakeholders

• Owners/Stockholders
• Interest
• Satisfactory return on investment
• Appreciation of stock value over time
• Attendance at two day picnic/festival featuring
  rock concerts, postcard writing, video messages
  to Congress, and plenty of Cherry Garcia! Just
  happy to be a shareholder of Socially Responsible
  company!
• Chance to buy into a company that reminds them of
  themselves
• Power
• Voting rights based on share ownership
• Rights to inspect company books or records copy
  of annual report, printed on recycled paper
  signed by the chairperson
• Right to buy more or sell existing

24
Primary Stakeholders

• Customers
• Interest
• Value and quality for dollar spent
• Receive safe yummy products
• Most have interest in specific causes that Ben
  Jerrys supports, such as Rainforest Crunch
• Power
• Purchasing goods from competitors
• Boycotting if practices of company are
  unacceptable
• They buy because they DO approve of Ben Jerrys
  polices.

25
Some Suppliers

• Cultural Survival-Brazilian Nuts
• La Soul - Apple Pie
• Maines Passamaquoddy Indians-Blueberries
• Greystone bakery-Brownies
• OK once quality control overcome
• Aztec Indians-Coffee
• Vermont Dairy Farmers

26
Primary Stakeholders

• Suppliers
• Interest
• Receive regular orders for goods
• Be paid promptly
• Livelihood
• Brownie Bakery-inner city
• Brazilian Nuts-make more profitable than
  deforestation
• La Soul - recovering addicts
• Coffee-Indian
• Power
• Refusing to meet orders if contract breached
• Supplying to competitors
• Ben Jerrys so close with suppliers, not issue

27
Primary Stakeholders

• Competitors Haagen-Dazs, Dreyers, Breyers
• Interest
• Be profitable
• Gain market share
• Premium ice cream industry growth
• Power
• Technological innovation
• Charging lower prices
• Blocking new entrants

28
Primary Stakeholders

• Retailers
• Interest
• Receive quality frozen goods in timely fashion at
  reasonable cost
• Premium ice cream that consumers value
• Power
• Buying from other suppliers
• Boycotting
• Reducing shelf space

29
Primary Stakeholders

• Creditors
• Interest
• Repayment of loans
• Collect debts and interest
• Power
• Calling in loans
• Repossession

30
Secondary Stakeholders

• Federal, State, Local Government
• Interest
• Raise revenues through taxes
• Promote economic development
• Power
• Issuing regulations, licenses, and permits
• Allowing industrial activities

31
Secondary Stakeholders

• The General Public
• Interest
• Protect the social values
• Minimize risks
• Achieve prosperity in society
• Power
• Supporting activists
• Pressing government to act
• Condemning or praising Ben Jerrys

32
Secondary Stakeholders

• Vermont Communities
• Interest
• Employ local residents
• One of states top 10 employers by size
• Vermonts average per capita income 17,436
• At B Js the Lowest salary plus benefits
  22,000
• Protect local environment
• Develop local area
• A top tourist spot in the state
• Power
• Extending additional credit
• Issuing operating licenses and permits
• Lobbying government

33
Secondary Stakeholders

• Social Activists
• Interest
• Monitor company actions and policies to ensure
  they conform
• Legally
• Ethically
• Safety
• Power
• Gaining broad public support by publicizing
  issues
• Lobbying government for regulations

34
Secondary Stakeholders

• Media
• Interest
• Keep the public informed on all relevant issues
• Health
• Well-being
• Economic status
• Monitor company actions
• Power
• Publicizing events that affect public
• Accentuate the negative or the positive
• Benefited enormously from media exposure at start
  up
• Now press watching closely for signs of hypocrisy

35
Secondary Stakeholders

• Worthy Causes
• Interest
• 7.5 pretax profit goes to a worthy cause that
  workers help to choose
• Rainforests, Childrens Defense Fund, AIDS
  patients, homeless people
• Lids for Kids (BJs and Yahoo!)
• Hooking up K-12 to the internet
• Power
• Publicity
• Very little power or control

36
Good Intentions, Bad Outcomes

• Cultural Survival-Brazilian Nuts
• Turned out to be Portuguese settlers
• 95 from agricultural-business giant that also
  Clear Cuts the Rain Forest!
• Pigs
• Heart Attacks and High Cholesterol?
• La Soul
• Bankruptcy

37
Stakeholder Issues Ethics

• Utilitarianism
• Greatest good to the greatest number
• Environmentalism, whole hippie ideals...
• Make the world a better place...
• Focuses on ends, not the means to get there
• T-shirts and jeans still meet economic and social
  benefits, for example

38
BJs Levels of Moral Development
Growth
Maturity
The Beginning
Level 3 Postconventional
Level 2 Conventional
Stage 6 Universal ethical principle
orientation Stage 5 Social-contract
orientation
Level 1 Preconventional
Stage 4 Law and order Stage 3 Good boy/Nice
girl morality
Stage 2 Rewards Stage 1 Reaction to
punishment
39
Stakeholder Issues Ethics

• Rights
• Certain groups of individuals
• Childcare
• Running at expense of 90,000/year
• Insurance Coverage
• Married, unmarried, heterosexual, or homosexual
  partners covered
• Media Says some need not apply?!?
• Republicans
• Gun owners-CEO worked for Winchester Rifles
• Pro-Lifers
• Meat eaters

40
Stakeholder Issues Ethics

• Justice
• Fair treatment of each person
• Upward appraisals
• Each given fair chance
• Whats the Dough Boy afraid of?
• Now aggressively shutting out competitors from
  distribution channels
• Amys Ice Cream-Austin, TX

41
Environmental Ethics

• Four fundamental beliefs
• Life on earth should continue
• Human life on earth should continue
• Natural justice should be done
• Nonmaterial qualities of life are worth pursuing
• Environmental Ethics
• Related to natural environment that agree with
  societys norms
• See suppliers and worthy causes!--Values Led

42
Diagnostic Typology
Stakeholders Potential for Threat to Ben
Jerrys
H
L
Mixed BlessingCollaborate Employees Vermont
Communities Social Activists/Media
Supportive Involve Suppliers Stakeholders Worthy
Causes
Stakeholder Potential For Cooperation With B
Js
H
Non-supportive Defend Competitors Retailers/
Customers Government
Marginal Monitor Creditors General Public
L
43
Laws, Government Regulations and Regulatory
Agencies

• Fair labeling (Social)
• Fat Grams listed on package
• Vermont Department of Banking Insurance
• Law that allowed IN state offering (Economic)
• The IN State Offering
• One in every 100 families
• 1800 households bought stock
• 1/3 with minimum buy

44
Laws, Government Regulations and Regulatory
Agencies

• Vermont Chamber of Commerce
• BJs withdrew because lobbying for business
• Incompatible with broad environmental social
  issues
• Wanted to remove members of Vermonts
  Environmental Board because too pro-environment!

• SEC (Economic)
• FDA (Social)
• Bovine Growth Hormone

45
Stakeholder Responsibility Matrix
46
Porters Model
Internet Sales
Other Stakeholders
Buyers

• Industry
• Competitors
• Dryers
• Breyers
• Haagen-Dazs
• Others

Employees Distributors
Grocers Individual Consumer
Enlightened Suppliers
Vermont Dairy Vermont Republic Industries Cultural
Survival La Soul
High tech/fat free
Substitutes
47
(No Transcript)
48
Enlightened Suppliers

• Vermont Dairies - St Albans cooperative, ban
  bovine growth hormone (BGH)
• Vermont Republic Industries - Employer of the
  handicapped
• Cultural Survival - nuts from Brazil, support
  indigenous forest people
• La Soul - Bakery employing recovering alcoholics
  and drug addicts

49
Other Stakeholders

• Distributors
• Dryers
• Haagen Dazs
• Employees
• Maintenance Workers Union

50
(No Transcript)
51
Establish Purposes and Principles
Select Economic Investment Criteria
Select Social Investment Criteria
Project Economic Performance
Project Social Performance
Establish Performance Standards for
Economic Investment Criteria
Establish Performance Standards for
Social Investment Criteria
Evaluate Social Performance
Evaluate Economic Performance
Identify Projects and Products for
Potential Investment
Identify Social Projects for Potential Investment
Monitor Performance
52
Mission Statement

• Product mission - To make, distribute, and sell
  the finest quality, all-natural ice-cream
• Economic Mission - To operate the company on a
  sound financial basis of profitable growth,
  increasing value for our shareholders, and
  creating career opportunities and financial
  rewards for our employees.

53
Mission Statement - cont.

• Social mission - To operate the company in a
  way that actively recognizes the central role
  bus. plays in solitude of society by initiating
  innovative ways to improve the quality of life of
  a broad community - local, national, and
  international.
• Social performance audit

54
Board of Directors
55
Committees

• Compensation
• Nominating
• Social mission
• Audit

56
Board of Directors Continuum
57
Founders - Ben Cohen

• Chairman of Board
• Dropped out of Colgate College and entered
  Skidmores University without Walls program, an
  unstructured college degree program,
• Quit school again
• Creative driving force

58
Founders - Jerry Greenfield

• Head of Ben and Jerrys Foundation
• Studied pre-med. at Oberlin College
• Drifted before pairing w/Ben
• Greenfield and Cohen
• spend most of time traveling
• and doing marketing
• promotions for co.

59
CEO History

• Ben Cohen, cofounder, was President from Jan.
  1983-Feb. 1995
• Held essay contest to find new CEO
• Robert Holland, Jr. replaced Cohen in Feb.
  1989-1991 in order to introduce a more
  professional management culture.
• Holland resigned after he accomplished goals of
  stabilizing companys manufacturing operations
  and bringing more professional management.

60
Current CEO

• Odak replaced Holland in 1991, needed someone
  with marketing and sales skills that would put
  the company in better competitive position
• 51 years old
• Married and has three grown children

61
CEO continued

• Earned a B.S. and M.S. degree in Applied
  Economics from Cornell
• 25 years of management expertise in variety of
  consumer product and retailing businesses

62
Levels of Moral Development
Stage 6 Universal ethical principle
orientation Stage 5 Social-contract
orientation
Stage 4 Law and order Stage 3 Good boy/Nice
girl morality
Stage 2 Rewards Stage 1 Reaction to
punishment
63
Management Style

• Business has responsibility for welfare of
  society as a whole.
• Gain customer loyalty
• Team quality management
• Selective hiring
• if its not fun, why do it?

64
Corporation Motivation andSocial Responsiveness
Management values and beliefs
Voluntary response
65
Flow of Authority
Actual
Intended
Shareholders
Shareholders
Board
Board
Management
Management
66
Public Affairs

• Doing good best kind of advertisement
• Try to be environmentally safe
• Employ handicap and youth
• Get everyone involved
• Joy Luck Gang
• Community Action Teams

67
Components of Ethical Climate
68
Ben and Jerrys Ethical Climate
69
Scheins Model

• Artifacts
• Mission Statement
• Ben and Jerry
• Testable in Physical Environment
• Annual Social Report
• Basic Assumptions
• Importance of Social Performance

• Visible but often not decipherable
• Greater level of awareness
• Taken for granted

70
Annual Social Report

• Workplace
• Operations
• Environment
• Franchise / Retail
• Marketing
• International
• Philanthropy

71
Social Report Example
72
(No Transcript)
73
(No Transcript)
74
Stock Performance
75
(No Transcript)
76
(No Transcript)
77
Human Resource Management

• Work-Life Survey
• Livable Wage
• Gender Equity
• Diversity
• Child Care
• Joy Gang

78
(No Transcript)
79
Updated Timeline
Robert Holland is selected as the new CEO and
turns around its performance for a net income of
6 million.
1994
The company begins a search for a new CEO. The
company also reports its first loss of just under
1,900,000
1995
80
Updated Timeline
Perry Odak takes over the vacant position of CEO.
Ben and Jerry publish their book Double Dip.
The company had net sales of over 174, million.
1996
Robert Holland steps down as CEO after greatly
improving manufacturing inefficiencies.
1997
81
Ben and Jerrys Conclusions

• Establish a formal code of ethics
• More directors from non-profit organizations
• Establish standard operating procedures and
  training for supervisors
• As the company grows, keep the social mission as
  a primary focus

82
Ben Jerrys Before
83
Socially Responsible Carrolls Framework
By Joylynn R. Radtke
Ethical Legal (Expected) Philanthropic
Economic (Required)
84
Conclusions, SR Company

• Expect to be a target if you claim to be a
  socially responsible company
• Being socially responsible is expensive
• Corporate values, vision, and culture will often
  conflict with operations
• Social responsibility requires creativity
• Social responsibility begets social responsibility

85
Recommendations

• Focus on differentiation
• Add organizational infrastructure devoted
  exclusively to the social mission
• Use Stakeholder Mapping and Diagnostic Typology
  to identify stakeholders and develop strategy for
  interaction
• Establish an ethics and communications program

86
Recommendations
Establish a mechanism to select and evaluate both
economic and social projects Establish an issues
(marketing) management process Board Members
should support the Economic/Social mission of the
company
87
Issues (Marketing) Process
Identification of Issues Analysis of
Issues Prioritization of Issues Formulation of
Issue Responses Implementation of Issue
Responses Evaluation,Monitoring, Control of
Results
88

• ?