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Introduction Name: Monsanto Company Purpose: “It is our purpose to help farmers produce more food, more with less, and conserve resources.” NAICS code: 32, Manufacturing 325320, Pesticide & Other Agricultural Manufacturing Target customer groups: Most notably, farmers. But in general, anyone who wants to buy seeds or pesticides. Only those who are opposed to GMOs (Genetically Modified Organisms) and Monsanto in general are those who are not the target market. Customer needs: Initially, the desire for new chemicals and chemical engineering products. Then, in 1981 it became higher yielding crops, using less resources via biotechnology.

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History: 1907 – Monsanto Founded 1914 – Expands into chemical industry and renamed “Monsanto Chemical Company” sold plastic, agricultural chemicals and fake rubber 1694 – Monsanto's product line expanded greatly, renamed again “Monsanto Company” 1964 – Establishes Monsanto Fund (charity organization) 1966 – Roundup herbicide developed 1979 – Monsanto and others pay $180 Million to veterans for dioxin poisoning from Agent Orange 1980 – Supreme court allows organisms to be patented. 1981 – Monsanto refocuses from chemicals to biotechnology 1994 – First biotechnology to ever get regulatory approval: soy, cotton and canola plants resistant to roundup 1997 – Splits food business from chemical business, Monsanto and Solutia respectively 2000 – “New Monsanto” separate legally from the Pharmacia Corporation (Solutia) 2003 – Monsanto and Pharmacia pay $700 Million for over 40 years of dumping severely toxic substances into the ground and waterways in Anniston, Alabama 2003 – Stock drops 50%, loses $1.7 billion dollars in one year 2003 – New CEO, Hugh Grant 2003 – Grant restructures Monsanto, creating new organizational systems for oversight 2003 – New focus from biotech in general, to food resistant to chemicals

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2010 – Monsanto ranks 31 of 100 in Corporate Responsibility Magazine “Best Corporate Citizens” up from 88 the previous year Today – Heavily focused on marketing through sustainability and sells biotechnology, pesticides, fertilizers and seeds.

A. Problem statement and explanation Monsanto's mission statement, products and business practices are not aligned to achieve their goal, which we can see in the harm caused to their identified stakeholders. The facts are Monsanto is an enormous corporation, originating as a chemical company at the turn of the twentieth century. From “old” Monsanto's inception, the core values and corporate culture have been that chemicals manufacturing and scientific inquiry into chemical engineering is beneficial for humankind. They have tried to apply the same techniques to different things throughout their history. Namely, manufacturing chemicals to do things from sweeten your drinks to deforest Vietnam, with the effects always, over time, contributing a significant of harm to their stakeholders. This is clear in the settlements they paid, 180 million in 1979 and 700 million in 2003, both due to harming of at least 20,000 stakeholders, likely more through their products and practices respectively. Due to the corporate culture that has been engendered, a short-sighted teleological one revolving around the immense hope of science for solving “problems”. Because of this culture, engendered for nearly a century, Monsanto has consistently skewed it's data, moved through scientific testing much faster than many stakeholders are comfortable with, and is currently being investigated for anti-trust issues relating to it's patenting practices. Though recently there have been at least superficial attempts to regain their image after the disaster in 2003, real change is not apparent. Even their more altruistic seeming expansions to India and Africa have been stated by the new CEO to be for the interest of their shareholders. This is a problem because, as one of the world's largest agricultural corporations they are expected, and have stated the intent, to help the world create abundant food and water. This is not happening, to the detriment of all the stakeholders involved (the vast majority of people who live on the planet). The potential consequences of this problem are genetic deformities in human populations as well as increasingly weakened ecosystems worldwide which will be less and less able to deal with the increasing load we are putting on the planet for life our sustaining resources like clean land, water and air. This agricultural system produces diminishing returns with more expensive fertilizer, pesticides and yearly seeds being needed as time goes on. Though it may seem a bit extreme, the sustainability of society as we all know it to be is at stake. II. Analysis

A. Analysis of mission and vision Monsanto's mission and vision are skillfully designed and worded by some of the most well paid people in the world. Revolving around the consumer's needs, not on a product

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in order to allow for natural growth. It's mission is providing a service everyone in the world needs, taking into account the different facets of the problems they face. The real problem however, lies in the fact that their stated mission is not correlating with their practices or corporate culture. B. The company’s structure and control systems Monsanto's structure is too large to effectively support it's goals. A multinational corporation cannot care for the well-being of it's stakeholders without being much more focused on each locale it operates in. This is definitely part of the problem. Since the new CEO took over in 2003, Monsanto has gained many controls on ethical and legal issues, however, it may have helped alleviate the problem somewhat, especially their publicity problem, however it has not been sufficient for any kind of real change in terms of corporate culture, products and practices. Oversight boards were created as well as documents to help guide employees with ethical decision making and reporting. The problem culture has not been changed by these implementations. C. Analysis of case questions 1. Does Monsanto maintain an ethical culture that can effectively respond to various stakeholders? No, Monsanto seems to have recently tried, but still fails to even create an ethical culture that can effectively respond to various stakeholders. Considering how many problems over how long of a time Monsanto has made them, they continually get legislation regarding their product passed in countries, including America, through unethical means. Their product in itself harms the stakeholders they have identified in both direct and indirect ways, from endocrine disrupting, teratogenic, and carcinogenic effects, as well as the weakening of the life support systems of our planet. Before an ethical culture can be achieved, an ethical product must be considered and implemented. 2. Compare the benefits of growing GM seeds for crops with the potential negative consequences of using them. The benefits of growing genetically modified seeds could be an amazing opportunity for humanity to create unparalleled abundance. They represent a product of hundreds of years observing life and studying it, reducing it down to it's parts to understand it. Given time, nearly any gene could be expressed in any organism to help facilitate adaptation to new, emerging conditions. However there are some major problems. The first is the amount of study of the effects of these technologies is in it's infancy. As Americans, we're basically the biggest, longest running experiment of GMO's on humans due to the speed with which Monsanto has had legislation passed here. The repercussions of reducing biodiversity by introducing poison into the ecosystem to the advantage of a single species are fairly well understood. Recycling of sinks and sources in a biological system with high bio-diversity represent sustainability, Monsanto's implementation of genetically

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modified organisms runs directly counter with this scientific knowledge. 3. How should Monsanto manage the potential harm to plant and animal life from using products such as Roundup? The only ethical way to manage this, from nearly any of the standpoints we've discussed from the teleological to the deontological to the value ethics is to completely halt the production and distribution of Roundup while refocusing their work on GMO's to halt the focus on Roundup Ready phenotypes. The harm it causes to bio indicator species like tadpoles as well as the documented harm to human cells, should be enough to stop polluting our ecosystems with this. Not to mention what is involved in the production of these poisons.

D. Ethics Case Evaluation Criteria
Performance—ECONOMIC • Even through the toughest times, Monsanto has been shown to be economically adept and almost always remained profitable, even during the heights of it's controversy. Corporate Governance & Compliance—LEGAL • In the U.S and increasingly elsewhere Monsanto has been following at least the most minimum expectations of a multinational from a legal standpoint. It is currently being investigated for antitrust issues and anti-competitive practices and has been inplicated in these issues before, though nothing has been proven yet. • Does the company identify relevant legal guidance which impacts their organization/markets: for global companies, compliance with the Foreign Corrupt Practices Act, U.K. Anti-Bribery Act, etc.? Yes, and it has been at least superficially strategically organizing itself to prevent such actions in the future. Internal Controls—LEGAL • Does the firm maintain a risk management division/department? Yes. • Does the company utilize board & CEO level monitoring systems? Yes. Ethics, Integrity & Principles—ETHICS • Does the company have a code of conduct that is reasonably capable of preventing misconduct? Yes and no. There is a code of conduct, however not one that is effective. The structural changes in Monsanto have not been enough to manage the culture of corruption currently in place. • Is there a person with high managerial authority responsible for the ethics program (Ethics Officer, Compliance Officer, V.P. Human Resource Management, etc.)? No. • Are there mechanisms to avoid delegating authority to people with a propensity to engage in misconduct (background checks, internal tracking of employees as they move through divisions/depts) No, currently they seem to encourage this behavior. • Are employees currently exposed to ethics training? Slightly, there is a document passed around called the “Code of Business Conduct”, laying out the goals of their Business Conduct Office. • Is there a system for employees to anonymously report unethical behavior? Yes, through the Business Conduct Office. They can retain anonymity “where local laws permit.” • Does the firm perform an ethics audit? No.

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Marketing Ethics—ETHICS • Has the company avoided major misconduct such as bribery, sales and advertising deception, conflicts of interest, misrepresentations of products, lying to consumers, pricing deception, etc.? No. • Has the company developed customer trust based on high integrity relationships and a stakeholder orientation? No. Management & Leadership—ETHICS • Does the company have a strong ‘tone at the top’ for ethical guidance & leadership? The new CEO seems to be pulling in that direction, without any significant change in their culture or practices. • Does the company mentor & guide new employees to navigate the risks in the industry? Only as laid out in their code of conduct document that all new employees are required to read. Social Responsibility—PHILANTHROPIC • Does the company take care of key stakeholder interests (employees, customers, suppliers, communities)? Only those inside the company appear to be taken care of, the community and customer stakeholders do not seem to truly be factored into decisions made. • What types of philanthropy does this company engage in? How does it support their goals? They have the “Monsanto Fund” which gives roughly 30 million dollars a year to worldwide projects. They also donate to 4-H and other youth programs. They've also donated seeds to Haiti after the earthquake and are very interested in giving to certain projects in India and Africa, though the CEO has said himself it's not simply out of altruism. Theoretically, this supports their goals by teaching people about farming. We've seen over time though that simply throwing money at non-profits in other countries is a non-effective strategy for improvement.


Solutions & Recommendations

A. The evidence/data used by the business decision-makers to base decisions from The business decision makers consistently fall back on the increase in crop yields per acre in the first few years of their production. Internal studies of the agricultural industry data and studies done by agencies heavily involved in Monsanto are the relied upon sources of information for decision making, nearly to the exclusion of any sense of true scientific rigor and peer review. Though the privileged numbers often look good, independent ecologists and environmental scientists almost invariably seem to come to wildly different conclusions than Monsanto's scientists. Monsanto should rely more heavily on independent scientists' research than their own internal research, especially when internal studies are widely considered to lack true scientific rigor. This is mainly due to the fact that those inside the company are likely to bias results in favor of quickly passing products through to manufacturing into the market. Scientists outside Monsanto, who are greatly affected by their decisions, have a much greater incentive to report accurately on what they find. Non lobbied market feedback is also another source of information that I would suggest relying on, people

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that have not been persuaded to think one way or another tend again to have less biased opinion. B. Recommendations: Alternatives, Criteria, Evaluate Alternatives, Course of Action 1. Identify alternatives A) The first, most obvious solution is to change their mission statement to correctly reflect the products and business practices currently in Monsanto. Something focusing on the need for constant, limited resource inputs into agricultural monocultures. Or focusing on the desire to make profits for the shareholders at the expense of certain stakeholders. B) Another solution is to completely restructure and rename the company into a decentralized network of small, locally based businesses, each with the same goal and mission statement Monsanto currently has. They would operate directly in key areas of agricultural production around the world and provide resources to connect the local community to their agricultural system. In this way, Monsanto can achieve it's current objectives in a real sense, The only real path to sustainability is through the expansion and interconnection of local agricultural, healthcare, education, industrial and governmental systems in each community. Instead of going into other continents and nations with an agenda to make money and tell locals what is best for them, feelings reminiscent of the White Man's Burden, asking how they can become sustainable. In addition to this, helping provide jobs and money to stimulate each local economy would give Monsanto's claims of supporting farmers far more credibility. In combination with the previous restructuring, an immediate halt to the production and sale of Roundup, as well as all Roundup Ready crops. Unfortunately, these are their largest revenue streams, so a vast amount of R&D would be necessary to use their bio-engineering prowess to engineer phenotypes that are not revolved around monoculture and material inputs and are instead centered around bio-diversity, abundance and the recycling of nutrients in their ecosystems. The creation of sustainable food systems. C) The third option is to enforce even more strict controls on company behavior and implement a new policy to undergo the most rigorous scientific inquiry and only produce products that are unanimously agreed upon as safe. This includes a stop to putting officials in positions of influence in governments, more transparency in the regions they operate and create an even more rigorous oversight panel on the production of their goods. In addition to the improved scientific standards, a new part should be included in the mission statement indicating they will only use the most highly tested and widely accepted products to achieve their current 3 goals.

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2. Establish criteria 1. Bio-diversity of agricultural systems supported by Monsanto's products increases. 2. Farmers using Monsanto products use less consistently less material inputs and outputs from season to season and achieve better yields. 3. Quality of existing natural resources increases from the use of Monsanto's products, rather than decreases over any given time line. (I.E. scientific, measurable standards of air, land and water quality in each area using Monsanto's products) 4. Communities where Monsanto operates become more aware of their agricultural system as time goes on. As measured by written surveys of students K-12 as well as sample population surveys and phone surveys, surveys would be implemented biannually. 5. Communities where Monsanto operates increase agricultural revenue and diversity of products sold over a 20 year-period based on each regions agricultural bureau's data. 6. Profitability is not eliminated. 3. Evaluate alternatives Option A) This option would have no effect on any of the criteria defines, and possibly have a negative effect on 6. This option is not ideal. Option B) By no longer focusing on pesticide production and worldwide monocultures, criteria one, two and three are furthered. The replacement into research and development of newer, innovative systems for increasing bio-diversity directly furthers criteria 1-3 as well. Additionally, measurement of criteria 3,4, and 5 is made easier by a heavy local presence wherever it may be. A sustained local presense in each community, getting involved in every sector of live directly furthers criteria 4, especially for the K-12 section. Criteria 5 is the hardest to predict, however, it's been shown over time, with a more bio-diverse crop selection and local interaction with farmers, money can be put into the local economy, stimulating growth and thereby directly and indirectly increasing the likelihood of more profits for farmers. In the long term, this option also allows for increased sustainability of profitability for the Monsanto company, making sure catastrophies like dioxin, PCB and toxic waste poisoning don't happen. Option C) With a new company wide value places heavily on scientific rigor in conjunction with their current goals, integrity of the product increases. Also, with a large section of scientists currently studying sustainability who critically review their methods, true progress can be made. This would help alleviate the bias of reporting due to the corporate culture. With more review and better data, better decisions can be made for stakeholders, furthering each goal. This option creates better methods of evaluating repercussions to stakeholders and negating those effects.

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Criteria 1-3 would be increases, though not as directly as through option B. Criteria 4 and 5 would not likely be affected to a great degree. Though this method has the highest likelihood of influencing profits the least of the shortest amount of time, as this is the least comprehensive method of change on the table. Translating into the most positive option for criteria 6. 4. Decide the course of action I believe the best course of action for Monsanto would be option B. Not only does it fulfill most of the criteria most directly and completely, it provides the fundamental shift needed in Monsanto to change the paradigm it works within to achieve it's goals. Though perhaps not the cheapest option, if looked at from a long-term perspective, it allows for the most sustainable profits over time. Companies that act ethically and are perceived to act ethically consistently do better and earn more revenue over time.