Kingfisher School of Business and Finance

Dagupan City

(J.M. Smucker Company)

Case Study No. 1
in
BME 12: Human Behavior in Organizations

Submitted by:
Aguilan, Maria Alondra Jane P.
Alicaycay, Julie-Ann B.
Bolambao, Mary Christine
Castil, Beth Chee C.
Dayrit, Kyryl Angel A.
Delos Santos, Danica C.
Joson, Ma. Angelika V.
Leocadio, Lislie Joy U.
Molina, Marianne C.
Paglingayen, Chad Joshua
Pua, Vanessa Joyce C.
Tandang, Andrea Eiai DG.
Velasco, Jashley Pearl M.
Group 11

Submitted to:
Ms. Rosalie M. Gabat
 I. Problem
Most businesses typically find themselves situated under external pressure to improve
their ethical track record. As a result, the management may tend to overlook the associated
factors that constitute the overall performance of the business. Smucker, Founder of J.M
Smucker Company, values ethics as a key element to success. However, the opportunity cost
associated with his imposition might have outweighed the supposed benefits. This case study
aims to answer the following:
In what ways could Smucker balance the trade-off between the enforcement of business
ethics and its drawback?

II. SWOT Analysis

STRENGTHS WEAKNESSES
• Virtuous Behavior
• Heavy Opportunity Costs
• Dedicated Employees
• Insufficiency in Technical Skills
• Ethical Workplace
OPPORTUNITIES THREATS
• Increased Potential Market Size
• Inclined Job Dissatisfaction
• Introduction of the Business to the
• Excessive Moral Requirements
Worldwide Market

Strengths
1. Virtuous Behavior
When hiring a new employee, J.M. Smucker considers their values. Having these ethical
standards ensures that they will only hire employees who have passed the qualifications, which
alleviates cases of fraud and misconduct.

2. Dedicated Employees
The J.M. Smucker Company values good relationships and proper management, as its
employees continuously participate in the company-mandated ethics program. These are vital in
the attainment of organizational goals.

3. Ethical Workplace
Employees' adherence to the company's ethical standards results in a systematic and organized
workplace. Thus, it enables them to work in harmony, entailing the company's success.
Weaknesses
1. Heavy Opportunity Costs
J.M. Smucker Company prioritizes investment in raising ethical standards instead of alternating
its approach to gain a maximum level of performance. Such forgone investments entail heavy
opportunity costs that would have substantially maximized shareholder wealth for the company
to grow exponentially. This is a major dilemma concerning their capital budgeting, structure, and
working capital management decisions.

2. Insufficiency in Technical Skills

Considering the principles of the J. M. Smucker company towards moral operations, employees
might lose the chance to develop their technical skills. Instead, they will utterly rely on
emphasizing ethics.

Opportunities
1. Increased Potential Market Size
J.M. Smucker Company upholds the essence of ethics as the key element of success to their
business. Such that, the company gives their employees in-depth sessions in understanding the
complexity of ethics in the business realm.

2. Introduction of the Business to the Worldwide Market

The J.M. Smucker Company is known for its ethical operations that bring them to be
consistently featured at Fortune Magazine.

Threats
1. Inclined Job Dissatisfaction
Assessment of the employee's ethical behaviors is too valued. The organization's job
specification might have obscured the acknowledgment of knowledge, skills, abilities, and other
credentials to perform the job.

2. Excessive Moral Requirements

Smucker Company employs people having strong personal values. Moreover, the company
engages in rigorous reference checks with a long training seminar.
 III. Alternative Courses of Actions (ACA’s)
ACA No. 1: Modifying Operational Systems
Altering the operating system could help Smucker establish a strategic and innovative
approach in the process of distinguishing among varying factors associated with the
performance of J.M Smucker Company. Through an in-depth analysis of past records, while
advancing access to data, modification of the management and operating systems such as
cost-leadership and differentiation strategy shall be performed.

Advantages
● Promote positive change
● Better resource management
● Maximizes productivity

Disadvantages
● Multi-level dependency
● Restructuring organizational systems may disrupt employee assurance

ACA No. 2: Company Expansion

Considering that J.M. Smucker is recognized for its ethical business practices, the firm
has the potential to expand its horizons. Being featured as one of the “Best Places to Work For”
harbors great recognition gathering the attention of the masses. It is an opportunity to take
advantage of potential investors, as well as competent employees to expand the business and
enter a wider market. This could be a chance to promote diversity that entails a sum of
prospects.

Advantages:
● Attracting new customers
● Increasing market influence
● Highlighting diversity

Disadvantages
● Could be time-consuming
● Increased capital requirements
ACA No. 3: Designing an Incentive Plan

The J.M. Smucker Company implores great significance for ethics. However,
implementing a number of ethical programs and seminars cannot downright eliminate
misconduct in the workplace. Thus, Smucker shall utilize the power of incentives that could
cultivate high-caliber talents and a committed workforce. Incentive programs could provide
reasonable assurance, as they effectively drive behaviors, especially when designed in
accordance with organizational culture. Motivated and ethically-oriented employees would most
likely yield the best results.

Advantages
• Increases productivity
• Increases efficiency
• Motivates employees to meet business objectives

Disadvantages
• Implementation is costly
• Poor design presents inefficiencies

IV. Recommendation

Upon evaluating the alternative courses of action, we decided to recommend ACA No. 1:
Modifying Operational Systems as the best alternative. The current organizational culture of J.M
Smucker Company is commendable. However, it takes heavy opportunity costs to achieve the
high moral standards they set for themselves. The reference checks and day-long training
seminars conducted are rigorous and not cost-effective. Instead, the firm should focus on
productivity, resource management, and promoting positive changes in their operating system.
They could maximize time efficiency invested in team discussions about lowering costs in
production and establishing differentiation from their competitors. J.M. Smucker is still a
business that needs to earn and pay its employees. It may be difficult for the employees to
adjust to a new system, but it is necessary for them to maintain their competitive advantages.
The ACA No. 2: Company Expansion was not chosen as the best alternative because it
inherent unnecessary risks such as compromising the system’s production quality. Meanwhile,
ACA No. 3: Designing an Incentive Plan may motivate employees, contrariwise exerts pressure
on the management that may impede the valued ethics of the J.M. Smucker company.